Inventory Management in the Time of Coronavirus

Jun 2, 2020 | News | 0 comments


16 tips to help your business adjust to the new normal

Since the coronavirus pandemic, businesses have faced severe disruptions that have affected production, supply chains, customer demand—in short, every aspect of day-to-day operations.

So what does your company need to do to weather the storm? Here are some suggestions to combat the biggest problems affecting businesses right now.

 

Production slowdowns

1. Expect longer lead times

With manufacturing and transportation slowed, it’ll take longer for orders to be fulfilled. That means you’ll need to keep additional safety stock on hand, so you’ll need to adjust your product reorder points accordingly.

2. Adjust summer expectations

With less labor available, manufacturers and farmers alike are producing less. That means less availability for both perishable and non-perishable goods come summertime. Be sure to factor this into your seasonal planning for the year.

3. Diversify supply sources

If possible, try to find alternate suppliers for your products. That way, if your primary vendor has to suspend production due to a coronavirus outbreak, you can still get the goods you need.

4. Adjust to a just-in-time (JIT) model

For products where customer demand surpasses product availability, you need to start thinking about just-in-time inventory strategy. That may mean more frequent reordering, changing suppliers to minimize turnaround time, or offering direct-to-consumer shipping.

 

Transportation disruptions

5. Reach out to new logistics partners

Just as diversifying your supply sources can help make your business more resilient, branching out to include more third-party logistics (3PL) providers in your supply chain strategy can give you another layer of protection in case your primary logistics partner fails.

6. Bring manufacturing home

Producing your products domestically means less turnaround time for your products—and fewer opportunities for your supply chain to fail.

 

Higher rates of absenteeism

7. Implement employee safety measures

The last thing you want is to become the new center of a coronavirus outbreak. You can keep absenteeism low and enhance employee morale with the following safety measures:

  • Social distancing guidelines
  • Mandatory mask and glove use
  • Health screenings
  • Employee health education
  • Regular workplace sanitization

 

8. Hire seasonal workers

If absenteeism is a big problem for your business, you may want to consider hiring part-time or seasonal employees to fill in the gaps. With unemployment rates at an all-time high, you should have no trouble finding qualified help.

 

Reduced warehouse capabilities

9. Skip the distribution centers

If you’re able, try routing shipments directly to your retail stores. This saves you storage and processing costs at your warehouse and cuts an extra step out of your supply chain. Ultimately, that helps your business provide better service and allows your customers to get access to what they need as quickly as possible.

 

In-store inefficiencies

10. Reassign resources

Have a handful of employees whose jobs are now unnecessary? Reassign them to an essential role. If you have a budget for in-store marketing you no longer need, try reassigning those funds to vital areas like product delivery. Reassigning your resources will help minimize loss during this crisis and maintain customer loyalty.

11. Ease payment terms

If you’re offering payment plans on high-priced items, you may want to consider easing the repayment terms on those products. With the economy entering a recession, consumers may be less likely to splurge on high-budget items like TVs and video game consoles. Lowering monthly payments and interest rates may help you move those products in spite of the economic downturn.

 

Shifted customer demand

12. Limit customer purchases on high-demand products

Drastic increases in customer demand for a particular product may make it difficult to keep that item in stock, which puts increased pressure on your supply chain. Purchase limits help make your inventory go further.

13. Increase product variety

Selling only one type of toilet paper may lead to faster sellouts of toilet paper within your retail locations. Diversifying your product offerings (with multiple types or brands of toilet paper, for example) can help you keep product on the shelf. Plus, it helps protect your business if your primary supplier goes under.

14. Adjust demand forecasting

As you plan for the future, keep in mind that buying trends have shifted dramatically since last year. While your sales may follow the same general trends in the coming months, they also might not. And there’s a good chance you’ll be working with less revenue than in the past as well. Make sure to plan your reordering accordingly.

 

Long-term supply chain adjustments

15. Shift focus from least-cost efficiency to sustainability

The days of making your inventory and supply chain as inexpensive as possible may be over. Instead, refocus your efforts on making your supply chain as reliable and sustainable as possible—even if it costs a little bit more.

16. Go with the flow

Above all, remember that this crisis is unprecedented. The business landscape is changing rapidly, and there’s no rulebook for how to deal with a crisis of this magnitude. Being agile and adjustable will pay big dividends in the end.

 

 

 

Courtenay Stevens is an inventory management and business finance expert at Business.org. She has been featured in articles for such publications as the Wall Street Journal and CareerMetis.



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