This blog post was published 20 March 2020, based on information available at that time.
As COVID-19 continues to impact the globe and we collectively try and navigate our way, Efficio will be providing frequent insight relevant to Procurement and Supply Chains.
We hope these timely and emerging observations, collated from our team of 500 consultants and broad client base, provide you with practical ideas and approaches but, more importantly, the inspiration and energy to drive towards a positive future.
Demand has gone crazy. Demand plans and Sales and Order Planning documents have been ripped-up to provide a more useful function – probably as toilet paper. But demand is not necessarily down in total, it has shifted – from leisure and pleasure and collective socializing to necessities, existence and individual pastimes.
Production is stopping overnight for sun screen in the UK, but hand sanitizer can’t be produced fast enough. How does production scale up immediately without investment? Production lines can run longer, if not already fully utilized, but this could be impacted by raw material supply and a dwindling workforce. Following an interesting series of conversations with procurement experts working with supermarkets, I was pleased to see how quickly they were collaborating with their suppliers to drive efficiency of time and material. They were rationalizing similar lines, therefore reducing change-over times, reducing the BOM and simplifying inventory (to list a few benefits) to maximize volume and speed to replenishment: people would rather have some standard toilet paper roll than no quilted roll with aloe … well done them. It’s a win-win and a great example of quick, intelligent collaborative thinking.
Similarly, we see people moving to alternatives and innovating. After pocket hand sanitizers ran out, people used large bottles and decanted it. After that, people started making their own from surgical fluid and soap. Consumers are buying outcomes, not convenience and individuality. We need to think differently and adapt.
Necessity is the mother of innovation.
We’re helping clients to understand and maximize their supply chains and procurement, and to respond positively and proactively to the COVID-19 crisis. Our clients have already started work on developing innovative solutions to build that positive future. We hope some of the blogs we share spark helpful ideas for you, and please reach out if you would like to hear more.