Stay resilient with flexible eCommerce operations
First published by blu, on 07 October 2020Warehousing and fulfillment
It is undeniable that 2020 has been largely defined by the ongoing COVID-19 pandemic, which has severely impacted businesses worldwide. The longtail effects from COVID-19 are not yet fully apparent - businesses are likely to face dual headwinds from both demand- and supply-side factors in the period ahead1. Across the globe, economic growth is expected to slow down along with changing consumer habits as a result of the pandemic, both of which impact consumer demand. On the supply side, supply chains have also been disrupted due to border closures and lockdowns. Mandatory safe distancing has resulted in a shortage of manpower in warehouses and distribution centers, not to mention the priority placed on transporting critical medical supplies, with non-essential shipments being suspended or delayed.
The supply chain situation has since improved, but a sense of uncertainty remains as the number of cases worldwide continue climbing. This unpredictability thus highlights the importance of having flexible business operations, so that businesses are resilient enough to adapt to fluctuating market conditions.
Increase your business resiliency
COVID has impacted the supply chains of finished goods in two significant ways:
- First, mandates in place to ensure safe distancing have placed limits on manpower required for the sorting and transportation of goods.
- Especially in places with high rates of community transmission, authorities have also stepped in to halt physical operations.
Reduced working hours, split teams, redundancies and the like have hit labour supply. Now more than ever, there is additional impetus to reducing organisational reliance on labour.
Apart from paring down on manpower costs, businesses need to ensure a safe operating environment in the face of increased regulations and employee welfare. The latter has served to highlight the relative inflexibility of scaling labour-based operations up or down as the pandemic has compelled businesses to confront the future of work and by extension, business resiliency.
When COVID-19 first hit, numerous businesses were blindsided by the state-mandated lockdowns and the subsequent safe distancing measures – customer satisfaction suffered as a result. With the demand for goods shifting to online channels, some businesses struggled to cope with the influx of orders. When stores were eventually allowed to open, manpower constraints and distancing measures meant that customers were faced with long queues and waiting times.
Since then, businesses have found ways to cope, but most are unable to meet the same service standards as before. Think about the upcoming shopping season – will your business be able to cope with the same or perhaps even increased demand for certain goods with the current constraints on labour?
The occurrence of physical disruptions to supply chains and operations have increased due to the pandemic, and this is set to continue for the foreseeable future. Digital transformation will only serve to enhance businesses’ ability to stay agile, regardless of the impetus. Not only does going digital serve well in the context of the pandemic, a supply chain managed and supported by digital tools can also accommodate to the growing trends of regionalisation and diversification, which can help businesses hedge against risks.
With a focus on digitalisation, blu’s automated fulfillment facility enables your supply chain to be more transparent and anticipatory. Real-time inventory visibility provides more accurate data for inventory planning, and allows you to adjust buffers appropriately. More importantly, our best-in-class technology can efficiently maintain operations while reducing your reliance on labour, helping to increase business resiliency in the face of current labour constraints.
Increase business flexibility
The key problem with labour-based operations, whether contractual or full-time, is that they are highly inflexible. For instance, many businesses were stranded with operating expenses despite not being able to fulfil orders when authorities closed non-essential businesses during the circuit breaker.
In these cases, orders could be fulfilled once operations were allowed to resume, albeit with safe distancing measures imposed. However, some businesses are disproportionately hit by the pandemic, such as those that operate primarily in the retail sector. Regardless of the industries they are in, businesses are looking for ways to cope as consumers adapt their purchasing habits in the new normal.
At the same time, the shift towards digital and social sales channels is expected to accelerate2. Omnichannel has been the way forward for some time now, but with the focus expected to be primarily online instead of offline due to the pandemic, experts suggest to engage customers and skew marketing spend online3. It is thus clear that having the business flexibility to pivot or grow your eCommerce operations is vital during this period.
By outsourcing your retail logistics to a third-party provider, businesses can focus on their core value propositions and garner more flexibility to react to ever-changing consumer demands and habits. Businesses should invest proactively in back-end operations to support customer fulfillment and experience, while still being ahead of the customer demand curve. Leverage our logistics expertise if your operations are not geared for online fulfilment. If your business already has an online strategy, our automated fulfillment solution can help transform or even amplify it to better tackle changing consumer demands and habits, many of which could be permanent, in a post-COVID world.
1 Baker McKenzie, “… supply and demand issues in particular markets could have long tail effects for global businesses.”
2 Nielsen, COVID-19: Entering A New Norm In Consumer Behaviour
3 EY, How can retailers adapt for sustainable growth after COVID-19?