TORONTO – Are you modifying your retail DC operations to keep up with pandemic demands?
Across Europe and North America grocers are experiencing unprecedented demand as shut-in populations turn to e-commerce for their basic needs. In the UK supermarket sales jumped 43 percent in one week, while in the U.S. grocery giant Kroger reported a 30 percent increase in sales in March alone.
Meeting that surge is a challenge when demand planning has gone out the window, labour is tight and you are already backlogged. Add to that the need to maintain hygiene and safe distances between employees and you are surely looking for new ways to manage.
Inside Logistics spoke with two retail supply chain specialists, John McClymont and Gary Newbury, to develop ideas you can adapt to your own operational needs. This article is Part 1. Part 2 – published on April 6 – will address labour challenges.
Make more time
The first suggestion is to make the most of the time available. Move from a five-day schedule to 24/7, Newbury suggested, with a full-strength team processing inbound loads because you’ll need it to keep up with outbound orders.
“How do you extend hours?” McClymont asked. “Can you find more time if you can’t do more with the time you were using pre-pandemic?”
Second, McClymont suggested evaluating lead times. Can you increase them? If you are operating with one or two, can you bump that up to three four or five?
“You need to slow things down to stabilize the system,” he said. “The more visibility you have on demand gives you more time to plan and pivot and be more proactive in your solution.”
Speed things up
Next, take a look at your picking rates and try to find ways to increase them. This can be accomplished through simplifying picking processes, for example, by shipping only core SKUs, only full pallets, full tiers or full stacks depending on the configuration, or it could be bringing in more people, “but at some point you’re going to bottle neck with the number of people you have,” said McClymont.
Take a look at all the processes being applied to orders, McClymont suggested.
“I would encourage people to be very mindful of how they were operating under a normal business environment and that needs to be pivoted.” Can fast moving SKUs be picked from trailers, or from the floor in a staging area, rather than going through a full putaway process, for example?
“Another gap is not really having an understanding or focus on inbound,” McClymont said. “But when demand is peaking and all of a sudden you’re off schedule and taking rush deliveries, you also have to be managing your inbound more effectively than your outbound.”
Yard management has become extremely important in managing inbound, McClymont emphasized. When you have enough time, you can get away with being less organized in the yard. But now, being aware of what’s in the yard and where may allow you to pick from trailers as suggested. Accurate yard management is knowing when something is coming in and how quickly you need to process it.
Communicating what you need is key, Newbury added. Why not ask your suppliers to change the way they send orders to make it easier to turn them around on your end. For example, if your average store take is typically 50 cases on a pallet, ask your supplier to send that product to you on pallets with 50 cases. This speeds up order picking and reduces the amount of labour needed.
And, if that’s not possible, because of shipping costs or cube requirements, for example, if they can ship in 100-case units, then once you’ve picked one order of 50, the second one is ready to go. Shifting from specific ordering to master pack quantities will speed up processes and receiving at the stores, McClymont said.
Does value-add add value?
“It’s important for ops leaders to start questioning if everything still needs to be done. Is it still adding as much value?” McClymont said.
For example, are ASNs really a necessity? They can slow things down a lot if you don’t have a well-integrated system, he says. Are you building pallets in a special configuration for instance that might for a time be able to be picked in a more streamlined and efficient way?
“You can do things more efficiency in a less customer-centric way,” he said. “Value-adds can put strain on a system that is maxing out.”
It’s especially important for operations leaders to ask these questions, he stressed, because normally they are just told to do it because the customer wants it.
Respond to the unexpected
“You have to have flexibility to respond to abnormal situations,” Newbury said. For example, if a store has to close, how do you redistribute produce and other perishables from that store back through the network?
“They will be facing things that were not part of their processes and way of thinking, and that they don’t immediately understand how to handle,” he noted.
“You have to figure out how to create new processes on the hoof. You need to be able to get the right people in the room to solve these challenges. You need to have a forum and a way to get people together to brainstorm. The last thing you want is for it to be a failure and then that becomes the focus and you take your eye off the day job.”