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Coronavirus tests warehousing models as UK Supermarkets ask customers to stop stockpiling

As UK retailers including Tesco and Sainsbury’s urge customers to resist stockpiling due to the Coronavirus, which is disrupting supply chains and has taken 55 lives to date, editor Kirsty Adams speaks to the chief executive officer of cold chain operator Fowler Welch and two renowned supply chain academics about the risk, resilience and preparation behind grocery warehousing and supply.

In an open letter signed by retailers including Tesco, Sainsbury’s and Asda, customers have been urged to stop stockpiling and advised; “There is enough for everyone if we all work together.” The letter, compiled by the British Retail Consortium, was published earlier this week as shelves continued to be left empty due to panic buying.

“Supermarkets are not going to run out of toilet roll or food,” according Supply Chain Management Professor and author, Omera Khan. Khan tells SHD Logistics, consumers shouldn’t be worried: “Supply chains are planned well in advance, with months of inventory planned for many product items.  Yes, we may see some dips in fresh products and scarcity of some items, as the supply chain’s replenishment items will take a hit and logistics is hampered by Covid 19, with some origins of supplies severely disrupted.”

Professor of Supply Chain Strategy, Logistics, Procurement and Supply Chain Management at Cranfield University, Richard Wilding, is also confident. Wilding even argues that UK grocery supply is quite easy. “Supply chain management through the grocery supply chain, you could argue, is relatively easy. With the five or six big warehouses the big retailers have, you can supply most of the UK.” 

Italy's supply chain model

As the UK stocks up and stays in, it’s natural to look to our friends in Italy and Spain, on lock down, queuing outside their local food store, and feel a bit concerned, encouraged to get in line ourselves. But as Wilding points out, Italy’s supply chain model is very different to our own. “The supply chain structures in Italy are very different to the UK. It has small local stores positioned in their communities. From what we’re hearing about Italy’s situation, those stores are critical support."

We briefly debate which model will manage better if things do escalate, but it’s impossible to know. “The distributed model you see in Italy, where we have to deliver to lots and lots of different locations, or the model that has fewer locations but can get more coverage from those particular facilities?” questions Wilding.

Wilding was invited on Good Morning Britain last week to debate stockpiling.

Wilding discusses staffing tactics for if – when – warehouse labour is reduced due to ill-health and social distancing. “We’ve already heard about some companies dividing their workforces into two communities which don’t meet. Working on the principle that if people stick in one community, that community can be in quarantine if someone becomes sick, but you still have other communities that can carry on working.”

A spare workforce sounds like a good idea, but it also sounds like a luxury item which many operators supplying retailers, simply can’t stretch to. In regards to personnel, Nick Hay – chief executive officer of Fowler Welch, a logistics operator which supplies ambient and temperature controlled products to all the major retailers – isn’t looking to supplement the workforce if it’s reduced, let alone create a spare one. He plans to simplify tasks and collaborate. He argues it doesn’t make sense to pick small orders for remote locations, when you can collaborate with competitors to deliver larger levels of stock to the same location and reach more people.

He believes we’re likely to see much more collaboration during these “trying times” and when we asked if he’s in discussion with his competitors about this, he remarks “tentatively.”
“As an industry we need the same support other businesses receive, in terms of cash flow, but also flexibility around driver CPC and environmental restrictions,” he adds.
Hay is planning hard. Like government, he’s put phases in place to follow as the situation changes. 1 Common Sense, 2 Minimise Risk and 3 Disaster Management. 

A workforce unable to work

Wilding flags up a number of things that operators should be thinking about and planning for. “What about infrastructure? You could lose a facility into a no-go zone. When Italy locked down particular regions of the country, all of sudden you had people losing access to infrastructure.” He continues. “What will happen, if all of a sudden 20% of the workforce is unable to come to work? Have we got the resilience to be able to carry on in that particular way? 

Wilding argues you can have more resilience if you have less people involved in some of these processes. “The only viruses that robots can catch are computer viruses, so if you’re able to create resilience against cyber security, have less people engaged in those facilities, that’s going to help… potentially and with the right technology people could run these facilities from a remote location if that was needed.”

Supermarkets show leadership

The grocery supply chain is strong – we’ll get our toilet roll – but it’s without doubt that it’s putting pressure on warehouse operations, regardless of how robust the supply chain model is. Preparing for reduced labour (Wilding points out this preparation has already been done by many because of Brexit) should be on the agenda. 

Shifting some responsibility onto the consumer to stop stockpiling is important to ease some pressure, but how do we do that? Despite the letter urging consumers to do so, the bare shelves go on. Shane Brennan chief executive of the Cold Chain Federation told us “ Supermarkets are right to show this leadership.” It’s on retailers to take control. 
Lidl and Tesco have announced priority shopping for elderly people and home carers between 9am and 11am in Ireland. A welcome move that supports our most vulnerable.

Will supermarkets need to act in future to support its supply chain, its warehouses operations which are critical to our nation, and will consumers understand if they do? I guess we’ll find out. 
 

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