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COVID-19 Retail Supply Chain Impact

Dr Sinéad Roden speaks about the impact covid-19 will have on the supply chain of the retail sector. Sinéad is an Associate Professor in Logistics and Supply Chain Management at Trinity Business School.

Pre COVID-19, supply chain management was certainly not a dinner party topic of conversation. Whilst dinner parties may seem a distant reality, the impact of supply chains on our dinner plate is now all too apparent, with the term ‘supply chain’ used in every day parlance by so many of us. We are either faced with increasingly sparse supermarket shelves or a long list of ‘not available’ items on our online shopping delivery. This isn’t a failure on the part of these retailers. Rather, it is the adverse impact of a series of COVID-related disruptive events on what is usually a well-functioning, lean supply chain with high variety and high volume demands.

That said, much of the research is indicating that supermarkets will continue to do well during this crisis as consumers spend more on groceries and less in other discretionary areas (apparel, accessories or furniture for example). However, the supply chain machine that sits behind these supermarkets has been creaking under the pressure. Surges in unprecedented customer demand, purchase restrictions and product shortages, have seen many retailers adapt their supply chains – a reactive, agile response is what was required. The focus of attention has shifted as retailers focus on doing the best they can, with who and what they have at their disposal. It is no longer about product variety and customer choice. Attentions have shifted towards ensuring the supply of high demand items. Product variety is slashed and the competitive edge is now around online platforms and safe delivery to the customers home.

Supply chain collaboration is more critical now than ever as retailers engage closely with their most important suppliers to ensure that those essential, non-discretionary goods are prioritised. We see contingency planning for alternative sources of supply encouraging a ‘think outside the box’ approach to where retailers procure the goods and services that are in demand. The reaction of many companies would have been unthinkable, before the crisis – brewers making sanitiser en masse for example.

With staying in as the new going out, society will hopefully have adjusted their preconceptions and expectations: consumers will have a new found appreciation for the series of interactions that bring their dinner to the table. Retailers will hopefully be able to sit back and marvel at the speed at which they could collaboratively engineer a reactive supply chain response to one of the greatest global challenges many of us have experienced, or will experience, in our lifetime.

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