COVID-19

Effect On B2B Retail

E-Commerce
Made by:
Luv Nambiar
National Institute of Technology. Karnataka
luvnambiar22@gmail.com
Kush Nambiar
Indian Institute of Technology, Kharagpur
kushnambiar22@gmail.com

Note: This PPT contains 5+2* slides including ‘Intro-Slide’

and ‘Thank You-Slide’
Supply-Chain Vulnerability and the Questions we need to Ask
What impact is the
Planning and supplier crisis having on
network demand and how
predictable is demand
planning?
How resilient is the
Transportation and
physical-flow and
logistics
logistics network?
How to get more working
Financial Resiliency capital from your bank?
Are components in the
Product complexity products substitutable?
What are the retailers
Expand Retailer looking for most in the
Network current situation: Stability?
Flexibility? Variety?
How complex or What about local
How exposed is the
concentrated is the
network to tariffs and sourcing to cope up
supply network, and
other trade disruptions? with lack of supply
how resilient is it to from suppliers in
disruption? highly affected areas?
How much inventory
How can supplier How can they ensure
needs to be stocked,
networks be expanded reliable replenishment?
and where?
and best utilized?
How to get more
How much financial What are the different
working capital from
flexibility does the pricing strategies?
your bank?
company have for increased
supply-chain cost or
sustained disruption?
How flexible is the How vulnerable is the Which products are
product to regulatory likely to be more in
design if the the
components are no changes? demand?
longer available
How to analyse area What about local sourcing
specific needs and demands to cope up with lack of
of retailers to ensure supply from suppliers in
hyperlocal operations? highly affected areas?
 Immediate actions to be taken

CATEGORY CATEGORY CATEGORY

1 Manufacturers 2 Merchandising 3 Distribution
● Determining the critical and major manufactures ● Online business transactions are at peak. Capitalise ● Retrain employees and redploy them to distribution

Assigning
that we cater to. on this increase in online activity from consumers centres in high demand areas to increase capacity.

Online
● Conduct a contract review to understand any and businesses alike. ● Cross train-store and back-office personnel to assist
financial implications of not being able to meet ● Provide more flexibility and choice to retailers in with e-commerce.
Triaging

agreed targets. Assess force majeure clauses and ordering items online.
exclusions.
● Should engage with all of the critical
● Partner with SMEs manufacturing essentials as ● Technologies that provide inventory visibility
manufacturers to form a series of joint agreements

Alternate Channels
well, along with big brands. across the distribution network (e.g. distribution

Private Labels
to monitor lead times and inventory levels as an
● Roll out a private label for such items. (e.g: “more centers and wholesale inventory) offer major
early-warning system for interruption.
Choice”, “Reliance fresh”) benefits for flexibility and transparency to serve
● Label is a symbol of quality which consumers look retailers in the best way possible given supply
for, resulting in better sales compared to items sold limitation.
● For risks that could stop or significantly hinder in loose. ● Prepare for potential channel shifts due to closures
operation lines, we can identify alternative ● Ensure strict quality checks before branding. of some of them due to regulatory policies.
manufacturers outside severely affected regions.
● Direct deals with the companies (raising money as
Alternatives

debt for the short term and invest it in the booking ● Reduce product variety and simplify SKU profiles.
● Proactively engage retailers to stabilize outbound
Product Variety

of stock) to ensure big brands availability ● Focus more on procuring high demand non-
discretionary essential goods. demand. Owning full distribution for some areas

Prioritise
● Reduce OT, IF requirements as well as payment
● Proactively engage your customers to stabilize by operating as a traditional distributor with
terms for major manufacturers depending on the
outbound demand. Shape demand to a narrower set enough working capital. Prioritize channels and/or
assessment above.
of hero SKUs retailers now so you know which to fulfill first.
 Immediate actions to be taken
CATEGORY
4 Inventory and Logistics
● Directing inventories towards locations where sales
are particularly active.
● Bypass or override inventory replenishment and
inventory allocation algorithms to account for
Inventory
instability in current situation.
Fulfillment
● Estimate available inventory along the value chain
—including spare parts and after-sales stock—for
use as a bridge to keep production running and
enable delivery to customers.
● Bypassing distribution centers and ship goods
directly to stores and simplifying assortments and
packaging processes putting speed ahead of
product variety.
● Supplementing non-discretionary transportation
Logistics
Precautions
capacity via partnership with under used
discretionary goods transportation fleets.
● Identify strategic hubs to feed smaller stores as
well as allocate more transport space to high
demand items
CATEGORY
5 Retailer Fulfillment
● Easing payment terms and conditions.
● Wider delivery appointment windows.
● Expand purchasing and return options to provide
flexibility
Safety
● Relaxing OTIF (on time and in full) requirements.
● Give retailers time to rationalise the scheduling and
routing of deliveries in order to save time and
mileage.
● Provide flexibility and ease restrictions for area
specific changes in retail requirements and demand.
● Keep in check the prices of high demand items.
Productivity
● Identify ‘high-risk’ locations and reserve stock for
retailers in those places to avoid disruption in
availability of essential products.
● Enforce order maximums on select essential
products.
CATEGORY
6 Workforce
● Equipping employees who handle food, logistics or
delivery with personal protective equipment (PPE)
can help keep workers and consumers safe in
outbreak situations like COVID-19.
● Stocking up on PPE supplies early can help
mitigate risk of shortage over extended periods of
time, especially if global supplies strain due to
surges in panic buying.
● Technology like internal third-party logistics and
employee applications can also be used to monitor
staff availability and shipment options while
streamlining onboarding procedures for new
workers.
● Staggering shifts to maintain worker health and
safety as well as improve retention and reduce
turnover.
● Raise wages for select employees and hire
temporary workers in high demand sectors..
● Restrict non-essential travel and promote flexible
working arrangements.
 Mid-Term Solutions
During the crisis companies will be putting on hold most IT initiatives or transferring cash and resources to collaborative applications and infrastructure support to
enable new ways of working and better manage the short-term implications. Moving forward, organizations should focus on solutions that support advanced planning and
mitigate the impact of similar events in the future which is quite possible given the volatile nature of the situation at hand with sporadic outbreaks of the virus on the rise.
Also companies should keep in check the gradual shift in demand from essential non-discretionary goods, back to discretionary goods.

END-TO-END COMPLEX SUPPLY ANALYTICS AND

STOCK VISIBILITY
● Organizations need to know what
they have in their warehouses, in
store, what is selling at what time,
and where, so they can quickly
react to changing conditions and
customer needs. Having unified
inventory visibility across channels
in a single database is crucial. This
not only enables organizations to
make rapid and agile replenishment
and stock transfers — it also means
they avoid overspend on inventory.
MONITORING
● Understanding how suppliers’ and
their subcontractors’ locations are
spread out globally, and knowing
which products pass through those
sites, is critical to manage any
disruptions. This enables
organizations to quickly predict
how the supply chain will be
impacted over the coming weeks,
giving them time to immediately
execute mitigation strategies.
AUTOMATION
● Investing in analytical tools along
with AI will enable organizations to
get ahead of demand, respond to
changing market conditions, and
suggest better allocation and
replenishment strategies. on scenario
analysis and “what-if” conditions, to
plot the best course of action.
● Inculcating trends in supply chain
automation will result in a more
efficient, more granular and most
importantly, a more flexible supply
chain.
MISCELLANEOUS
● Continuous analysis and survey
checks to predict the change in
‘high demand’ products in areas
which are doing better in terms of
containing the virus.
● Continue to balance supply and
demand and build buffer stock as
part of the business continuity
strategy.
● Assess opportunities to diversify
suppliers to ensure raw material
security.
● Try to relocate freight to be closer
to the retailers and to hedge against
additional closures.
Looking Ahead
The economic impacts are beginning to be felt, and many economists are predicting a deep recession of unknown length. Supply chains are spinning incredibly hard to
keep up. While black swan events like coronavirus can’t always be predicted, understanding supply chain risks and opportunities gives organizations more transparency
to plan ahead while maintaining customer experiences in the face of crisis.
STABILISATION AND RESILIENCE
➔Once the business has stabilized post-crisis, strengthen operational
and structural resiliency.
➔Reinvent existing supply chain with a more agile network
structure.
➔Diversify and de-risk end-to-end network structure.
➔Vet your third-parties’ pandemic preparedness and response plans
to better understand how you might be affected by their decisions
and to.
➔Simulate supply chain disruptions and test robustness.
➔Strengthen the companies resolve to digitally transform its
business with the help of new world technologies like Big Data
Analytics, AI and Machine Learning.
REQUIREMENTS OF THE CONTRACT
There are a handful of key commitments that we should require
from the manufacturers during such a disruption, and we need
to update the contractual framework for such events. Executives
should ask themselves a set of questions and ensure to cover
them exhaustively in their contracts:
➔How are we dealing with short-term changes (e.g. production
stops)?
➔How can we ensure supply safety and supply priority?
➔What if prices are changing rapidly (like face masks)?
➔What happens if volumes are committed?
➔How are business risks shared?
MANAGE DEMAND VOLATILITY
For supply chain planners, one pitfall to avoid in order to move
forward is the dynamic called the inventory bounce. When
demand reaches a new steady state that is lower than the
previous steady state, there must be a cut in production to allow
the pipeline of stock to lower to a new steady state level. At that
point, production actually increases a bit to match the new
demand.
MULTISOURCING
➔Companies should multi-source strategic commodities or key
components to reduce their dependence on one supplier. This
recommendation held true before the impact of the pandemic and
has been strengthened by it. Supply chain and procurement
executives need to analyse their spend and reduce reliability on
one supplier and one geography.
➔The decision to develop a second source is likely to have a
commercial impact, especially on volume rebates and tiered
pricing mechanism with existing suppliers. It will also add
complexity to your supply chain in the short run; but it is key to
business continuity and, in most cases, worth the risk premium
you will be paying as a firm.
➔Emphasis on local sourcing with a renewed focus on SMEs.
THANK
YOU