How retailers can overcome delays within the grocery and grocery provide chain

By SAP Ariba and SAP Fieldglass APJ Intelligent Spend Evangelist Gordon Donovan.

By SAP Ariba and SAP Fieldglass APJ Intelligent Spend Evangelist Gordon Donovan.By SAP Ariba and SAP Fieldglass APJ Intelligent Spend Evangelist Gordon Donovan.

Australian retailers looking to a post-pandemic future need to be prepared for the ongoing supply chain disruption.

Covid-19 stopped production lines and disrupted worldwide sales. This has had an impact on sales and a full recovery is unlikely in the short term.

When the nations went in and out of the lockdown, there was a shortage of basic groceries and other essential household items in the shops. Panic buying contributed to this, but slower production lines caused by staff isolation and other factors also contributed.

The Australian Food & Grocery Council has warned of further shortages in short shelf life items such as meat and dairy products, as well as a range of products outside of the fresh food category, as economies open up.

"If we don't find the right approach to close or casual contacts, it will have an impact similar to that in the UK, where the workforce needs to be isolated and not enough available to make products and there could be bottlenecks," says CEO Tanya Bards.

She added that talks are ongoing with the government to find ways to keep production lines running and minimize further disruption. As Christmas approaches many retailers will get a welcome boost in sales, but the need to deal with such issues will remain.

Implementation of new strategies

Organizations need to rethink their procurement risk management plans as they can no longer rely on previously successful strategies. There is no way to completely avoid global supply chain challenges, but a long-term, strategic sourcing strategy can minimize the impact of supply chain volatility.

Retailers need to review forecast supply and demand for popular items and hold inventory whenever possible. You cannot control the break in the supply chain, but neither can you sell inventory that you do not have. Shift the focus from reducing inventory to a more balanced approach. If you've used a “just-in-time” model of eliminating waste, focus instead on eliminating manual processes and duplication.

Now is the time to expand your supply base. Eliminate individual potential sources of error by breaking down supply chains across multiple suppliers. Avoid switches of the same type and replicate the aggregate instead of replacing it exactly. Research from Deloitte suggests that 47% of purchasing managers plan to diversify their supplier base.

Orders for online delivery and click-and-collect services are becoming increasingly popular. This offers a chance for traders looking to adapt. Promoting pre-orders is a great idea because buyers get what they want while you better understand demand and can hold inventory to meet it. Be clear about availability and when customers will receive deliveries.

See if a subscription model might work for your business. We all know services like Netflix and Spotify, but if you take a closer look you can find companies that offer subscription services for all kinds of products, from fruits and vegetables to toilet paper to razor blades.

Use technology to stay ahead

The effects of disruptions through production and sales networks can be minimized with the right digitized procurement strategies. These offer benefits such as improved visibility, agility, and decision-making, and can also add significant value to the business.

Smart technologies allow you to take a proactive approach so you are better prepared if the unexpected happens.

Retailers should set five year goals and always build them based on what the technology can do, rather than trying to get the technology working around the old ones. Make sure your strategy is helping to identify, scale, and assess risk and regularly review how you are doing.

Another big plus point of digitization is that information is exchanged in real time. This can provide an early warning of potential problems that can help you avoid problems, or at least respond quickly to them.

Risks in the supply chain do not go away. With worries about climate change and other threats, now is the time to prepare for the future.

About Gordon Donovan

With over 30 years of direct sourcing experience leading sourcing transformations and setting up and improving procurement functions, Gordon's role as the APJ Intelligent Spend Evangelist helps organizations understand and manage their spending to add value to their business as well as the power of Use procurement and expense management to serve their purpose.

About SAP

SAP is one of the world's leading manufacturers of software for the management of business processes and develops solutions that enable effective data processing and an effective flow of information between organizations.

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