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SUPPLY CHAIN & LOGISTICS TRACKING THE CHANGE After years focused on speed and hyper-optimisation, supply chains are rethinking their business models to offer the agility and flexibility today’s market demands. CBy Peter Howard. hanges in grocery buying behaviour have shaken up the supply chain. With products finding new paths to the pantry, companies must find new ways to meet demand. When Covid-19 reached Australia in 2020, localised panic buying caused weeks of empty shelves, giving the first hint of problems in the supply chain. While the supermarkets willingly collaborated to move stock around the country, with Woolworths at one stage sharing stock with Coles to meet a remote community’s needs, the supply chain cat was out of the bag. Efficiency, speed, just-in-time manufacturing, and minimal warehousing may have been optimal in a perfect world, but weren’t what was needed to support a nation facing a pandemic. What went wrong After the early bouts of panic buying, shopper behaviour began to change. Thousands turned to online grocery shopping, with unprecedented growth in home delivery. In 2020, online ordering of groceries increased globally by US$60 billion over the previous year. Other consumers began limiting their exposure in supermarkets by ordering online and picking up locally. They continue to do so today. Large numbers of people also began shopping for their non-perishables online, topping up with fresh produce at local independent supermarkets or convenience stores they hadn’t previously used. All this different buyer behaviour created new and previously unseen demands on a supply chain already under immense pressure. New social distancing requirements had forced factories to reconfigure production lines and function with fewer staff across hastily introduced shift systems. Imported ingredients and packaging materials began to run out, forcing substitutions to be made and even temporary withdrawals of the product. At the same time, producers were having to rethink their supply routes because restaurants were closed, online ordering had grown and homes had become the new end point, adding further pain due to the significant increase in transport costs. With so much change, supply chains couldn’t possibly keep up. Having been optimised for efficiency and speed, they had little chance of success in circumstances demanding agility and flexibility. It was clear they needed to change their approach. What makes a supply chain flexible? While some of the changes in consumer shopping habits might return to pre- Covid models once the pandemic is over, many are expected to continue. Consumers have been shopping in these new ways for more than a year, and that’s time enough to form a habit. Recognising the change is here to stay, supply chains are looking at ways to transform their approach, including sourcing more products locally, carrying greater buffer stock, having a more resilient network, and introducing greater flexibility to move stock quickly from where it is to where it needs to be. Keeping track of products on the move is one of the greatest challenges for supply chains. Movements can involve multiple supply chain partners, all of whom may be involved in the splitting or combining of pallets or loads, the use of different storage or delivery locations and the use of different modes of transport. For such complex supply chain activities to be effective, it’s vital the information related to products on the move remains linked to those products at every handover and is continually visible to the supply chain controller. Without visibility and traceability in a supply chain, confusion, limited fulfillment ability and the potential for the company to be exploited will result. According to global data standards organisation GS1, this “can lead to an inability to capture the right demand signals to reveal shifts in demand, an inability to respond to demand shifts due to resource shortages, and an inability to redistribute goods where they’re needed”. When it comes to grocery supply chains, food safety and consumer health may also be at risk. While many companies recognise the importance of visibility, it’s of concern that only 44 per cent, according to research, have solutions that allow them to monitor their entire supply chain. Know where, when and why GS1 develops and maintains the global barcode standards many large grocery manufacturers use for production and supply chain data. Having a globally accepted standard enables a high level of interoperability and inventory tracking between supply chain partners, adding visibility and accurate tracking of products moving through the supply chain. GS1 Australia Manager Consulting John Szabo tells Retail World what those journeys may involve. “From a logistics perspective, products may travel from one side of the country to another using various forms of transport from road, rail and sea,” he said. “It’s not unheard of to use air transport in urgent situations. “Loads may be split depending on the size of the order and, if multiple forms of transport are used. Multiple logistics organisations may be used in the transportation of the product, as well.” With the supply chain journey now extending to homes, often through third party providers such as Uber Eats for the final leg, the need for traceability is vital, and the information contained in barcodes a vital part of the process. “Home delivery means traceability is becoming ever more important in this day and age,” Mr Szabo said. “Currently, however, traceability data such as batch, expiry date or production date aren’t captured at retail point of sale. This would apply to home deliveries as well. Retailers have to rely on the consumer to check the batch or production date when a recall is posted. “Traceability information is usually captured by large retailers into their main distribution centres. Foodservice organisations have similar processes. As product moves closer to the 64 RETAIL WORLD JUN, 2021