How Retailers Upped The Ante To Deal With Supply Chain Constraints

The lockdown announced last month imposed curbs on everyday life without precedent in peacetime. After the initial shock, retailers have found ways to deal with the supply chain constraints, upped the ante on in-store people, product and hygiene management. “While production and distribution of non-essential sectors have come to a virtual standstill, essential goods retailers have kept the ball rolling, pinning their hopes on the government to keep their supply chain undisturbed,” says R N Iyer, CEO and founder of Vayana Network, a platform that connects corporates and their supply chain to financial institutions.

To start with organised retailers such as Big Bazaar, Spencer's and Reliance Retail have all announced that their supermarkets and convenience shops would limit customer numbers, though the limits are different for different branches based on the footfalls and the number of tills, with shop managers using their judgement on customer numbers and when the shop is at capacity. Many have enforced a one-in-one-out policy to enforce social distancing. Some are also using volunteers or marshals to help manage queues outside shops and remind customers about the government’s social distancing rules.

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Two things stood out from our conversation with retailers — that the ones with online delivery and click and collect services are working at full capacity. And that supermarkets are asking customers to pay with cards or any other form of virtual money rather than cash at tills as a way to help contain the spread of the virus.

Now the thing to remember is, that these retailers have to tackle challenges at two ends — the front end or the shop floor and the back end or the supply chain. The front end is relatively easy —it's more about tackling store traffic and hygiene. Sadashiv Nayak, CEO, Big Bazaar, says people are going to congregate at food stores and so the prime focus is on maintaining hygiene and taking safety precautions. “We are making sure we don’t have too many people at the store at a time. So they are being asked to queue up outside the Big Bazaar stores, maintain a distance of one metre from each other and even inside the store, we are ensuring there is no crowding. There is mandatory temperature checking at the entry point. This gives confidence to the authorities that Big Bazaar is well-placed to serve consumer needs.”

Towards the end of March, Reliance Industries took the decision to go omni-channel. One can order online and pick up the merchandise from her nearest store. Depending on the pin code, the nearest store is assigned to a customer. “We had this in Mumbai and now we have started this at all our stores," says Manish B Bhatia, AVP, Reliance Industries. “All 736 Reliance Fresh and Reliance Smart (hypermarket) stores are being kept open for extended hours. We have also started taking vehicles to critical areas where our stores are not located.” These vehicles go to these locations at certain dedicated hours with select products.

Apart from prioritising customer needs, Nayak says, the biggest lesson in the situation is redefining the hygiene of the shopping environment, which will now be an ongoing exercise — even after the lockdown is lifted. “More important is taking the hygiene options to our distributors

who are spread out. Supply chain challenges like narrow roads will not go away. What is important is how do we take precautionary steps keeping in mind hygiene and safety across the supply chains,”

he elaborates.

This is also the time to remap employees, make alternate rosters so the burden is shared, deploy staff to stores closer to their homes, while also making sure those with elders at home don’t need to come to office regularly. “The plan is to be as nimble as possible,” says Nayak.

Tackling the challenges at the shop is still easy; regulating the back-end or keeping the supply pipeline running is the tricky part, agree retailers. Nayak says things become smoother if one sources products from a wide network of distributors. In other words, if your are fed by distributors A, B, C and D you are better off than one who is fed by A and B alone.

So, what are the other ways to keep the supply chain running efficiently? Big Bazaar’s Nayak has an answer: “Do not to clog your stores with unnecessary products.” The retailer has identified 500 top articles that are really needed at this point of time, and it is working with its FMCG partners, along with the distribution centres, to ensure that those 500 are never out of stock. “We are living by the day and week right now,” says Nayak.

While Nayak speaks about the advantages of having a wide network of suppliers in times like these, Vayana Network's Iyer says this might be a good time for corporates to consider strategic sourcing to help increase supply chain efficiency and reduce costs. So instead of having many suppliers of one particular item, one should now focus on a few and cultivate deeper relationships with them so they become better at meeting cost and quality goals. The other thing to do is identify suppliers closer to your store location. Also, this is a golden opportunity to deploy tech solutions to stock-keeping so that there is no idle stock at any given time.

In terms of technology alone, Indian retailers have quite some way to go. Global brands Morrisons, Aldi and Asda, for instance, have installed large perspex screens at their checkout counters to shield customers and check out staff. They have adopted interesting ways to limit panic buying such as giving essential services professionals a dedicated time slot to shop or limit who can shop in the stores at certain times or on certain days.

All said, experts agree this really is the time retailers can build a lot of equity if they are able to up their game. “Players, who offer the reassurance of quality and cleanliness, stand for a holistic approach to ensure well-being of customers and staff, will reap big rewards,” says a store manager at a Noida outlet of Spencer's.