According to McKinsey, “Supply chain leaders are being forced into making quick decisions to implement transparency-increasing solutions and rapid-response capabilities to mitigate the outbreak’s short-term fallout.” McKinsey has identified five ways that retailers can respond to the shift in consumer buying:
1. Secure demand: retailers can work with their supplier networks to secure adequate supply of high-demand products – like simplifying SKU profiles, widening delivery windows and relaxing on-time, in-full requirements to improve speed.
2. Redirect inventory: Retailers will need to begin bypassing their inventory replenishment and allocation algorithms to shift inventory quicker and put focus on high-demand goods.
3. Add capacity: Shifting labor to areas that need support, like temporarily moving an office worker to a warehouse role, can increase capacity.
4. Balance agility and flexibility: This is more critical than ever, and the preferred method by retailers is to bypass distribution centers and ship goods directly to stores.
5. Deliver reliability: Delivery continues to rise – and retailers can help accommodate by widening delivery windows, converting some outlets into “dark store” and shifting in-store employees to delivery services.