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From Our CEO

Responding to Demand in the Age of COVID-19

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

As the coronavirus outbreak develops across the globe, Amazon is reporting a surge of orders putting extreme pressure on its operations. To keep up with online shopping demand, the retail giant plans to hire 100,000 people and raise pay for workers at its warehouses and delivery centers.

“Getting a priority item to your doorstep is vital as communities practice social-distancing, particularly for the elderly and others with underlying health issues,” says Dave Clark, senior vice president of worldwide operations. “Our labor needs are unprecedented.”

With numerous governments encouraging people to stay in their homes,  Amazon isn’t the only company realizing that it must ramp up hiring. Supermarket chain Kroger has immediate positions available in its retail stores, manufacturing plants and distribution centers. And in response to ongoing sold-out time windows, grocery delivery service Fresh Direct is adding drivers to take on additional slots.

“The workers who stock shelves; operate registers; and deliver meals, groceries and medicine are filling a vital role,” writes Charisse Jones for USA Today. They are becoming the linchpin that connects businesses to consumers.

Australian supermarket chain Woolworths has hired more staff in preparation of exclusive shopping hours that have been added for vulnerable populations, such as the elderly and people with disabilities. The grocer also recently required additional people to restock shelves stripped bare by panicked shoppers. In fact, Woolworths closed all of its stores nationwide for one night in order to fill them up again.

As urgency and fear propel people down the aisles, the frantic pursuit of groceries and household goods has been pushed to an intense level, writes Corina Knoll for The New York Times. She goes on to quote Walmart Chief Executive Doug McMillon: “The areas where we’re seeing pressure in the supply chain are surface cleaners, cleaning supplies, paper goods in particular. … Hand sanitizer is going to be very difficult to have 100 percent stock on for some time. We’re still replenishing it and shipping it, but as soon as it hits the stores, it’s going.”

Easing the anxiety

There is no doubt that the coronavirus outbreak is a rare challenge for supply chain professionals. As consumers continue to stockpile, and false demand signals are repeatedly triggered, we are experiencing the bullwhip effect in real time.

Thankfully, as the APICS Dictionary app points out, “The bullwhip effect can be eliminated by synchronizing the supply chain.” Indeed, after rushing to meet irrational buying and massive demand spikes, supply chain leaders must work together to prepare for new challenges ahead.

Potential approaches include modifying algorithms in demand planning systems, manually adjusting orders, managing demand planning with spreadsheets, and monitoring any new problems that arise as a result of tweaking orders. Gain additional strategies from ASCM’s new webpage dedicated to content and resources on the coronavirus pandemic. The page includes valuable content from supply chain risk management experts and ASCM leaders, and we are committed to updating it continually as the outbreak develops.

In addition, keep the conversation going in ASCM's Real-Time Impact COVID-19 community.  This is an exclusive community where members can connect as we navigate the supply chain impacts of coronavirus.  Ask important questions, share and learn from one another.  I invite you to log in to the Supply Chain Channel and join the community today.

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