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Supply Chain trends and insights: COVID-19

by Chris Barr

Boxes in a warehouse

There’s not many industries not effected by the COVID-19 outbreak, but one that has been busier than ever is supply chain. It has seen an increase in demand, but also a huge change in trends of what products and businesses were seeing these increases. What will the long-term effects be to the chain, and which new habits of consumers are here to stay? 

What’s changed? 

  • Panic buying stops. At the beginning of the pandemic, there was an unprecedented demand for essential items like pantry staples, liquor and home cleaning products which put retailers and their suppliers under immense pressure but we’re seeing this starting to slow.  
  • Sales boom increases operating costs. The short sales’ boom has increased operational costs. Many businesses have increased their headcount and moved to around the clock operations in order to meet the demand and supply of products.  
  • A third of Australians feel the pinch. The ABS reports found that 45% of Australians have had their finances negatively impacted by COVID-19. The economic effects are yet to be seen but the coming months will be some of the most challenging for consumers and businesses, and diligent businesses have been future planning for the inevitable. 
  • Demand risk. The pandemic has impacted every Supply Chain in one way or another, challenging businesses to re-think their contingency planning when it comes to macro and demand risks planning.  
  • Modelling for the future. With a degree of uncertainty and too many variables at play, supply chain leaders are being tasked with preparing for life after COVID-19 and looking at ways to free up cash flow, improving forecast accuracy and keeping inventory well controlled.  
  • Logistic shortages. Freight and logistic providers have quickly sought temporary solutions to the current increase in demand for local drivers, international air and sea freight capacity.  
  • Less SKUs to manage demand. Many food manufacturers have reduced the number of SKUs they produce to allow greater production efficiency and focus on replenishing stock of core items.  
  • Giving back. The Aussie spirit is alive and well with businesses pivoting their manufacturing, for example Four Pillars Gin (VIC), who’ve started making hand sanitizers, and Detmold (SA) manufacturing 145 million face masks for healthcare workers.  
  • Selling online. As consumer services suffer due to social distancing, many consumer goods companies are solidifying their supply chain infrastructure and processes to support efforts in digital and eCommerce channels.  
  • Recruitment freeze. As many businesses delay or freeze recruiting new roles, there remains an increased interest in contract recruitment in the interim. Businesses are looking to recruit more senior contractors who will be able to hit the ground running and are comfortable to work autonomously and be inducted virtually.  
  • In-demand roles. We have seen increased demand for permanent or full-time contract junior supply chain talent level roles in customer service, inventory management, supply chain analysts, supply & demand planners and purchasing. 
  • Filling the gaps. Companies with current gaps are seconding people from other business units to cover gaps in the immediate future. We are witnessing a lot of people being able to expand their skills. 
  • Virtual onboarding. Businesses are experimenting with the best approaches to onboarding new starters from home, to set them up for best success. Recruitment processes are being shortened to bring on board talent in the interim and we are also seeing examples of businesses recruiting new talent that they haven’t met face to face yet. 
  • Trading conditions. B2B services, food service, hospitality and tourism have been hit the hardest by Covid-19. The recovery of these industries is expected to be slower than others with businesses continuing to operate on reduced working hours and hiring freezes.

What’s next?  

  • Australia has started to flatten the curve, State & Federal Governments are now planning on the best way to ease restrictions, getting people moving, business up and running, and kick starting the economy. 
  • It has been a challenging period for the job market with NSW and VIC showing the greatest decline in advertised jobs according to SEEKs latest stat though it’s encouraging to see roles still in demand across supply chain.  
  • At Six Degrees Executive, we are continuing to provide support for our retail, FMCG, manufacturing and logistics clients by connecting them with top supply chain talent in both permanent and contract roles such as Group Supply Chain Manager (consumer), Logistics Manager (retail), Supply Planner (consumer), Logistics Coordinator (retail), Supply Chain Analyst (health), Indirects Category Specialist (manufacturing). 
  • Conversations in market indicate a sense of cautious optimism as a result of Australia’s success in managing the pandemic but we are likely to see hiring freezes hold firm through May and June, until businesses have more clarity on what the future looks like. 
  • As consumer behaviour changes and a greater shift towards shopping online, there is the potential for sales growth to continue at a slower pace. This growth will be across categories like grocery, liquor, health and beauty and homewares. This will undoubtedly lead to businesses investing in their supply chain operations and technology to support businesses as the grow their eCommerce channels. 
  • Supply Chain strategies are under the spotlight and a greater emphasis will likely be placed on how watertight contingency plans are such as setting up multi supplier hubs across the world to ensure the supply of raw ingredients/materials during times of crisis and the steady supply of finished goods to consumers. 
  • With demand and supply of products fluctuating and as businesses recover from panic buying, we potentially will see an increase in demand for contracting roles in supply and demand planning, supply chain analysts and logistics coordinators. 
  • Businesses are beginning to look at returning to work strategies to support their workforce and keeping the safe and healthy. We are seeing some businesses opting for rotating rosters or phased returns whilst others continuing to work from home for the foreseeable. 
  • Conversations in market indicate local manufacturers may potentially win out long term, as consumers will want to support Australian businesses, though offshore manufacturing will likely remain unchanged in the main. 
  • Talent is naturally cautious in exploring new opportunities however there is still confidence in businesses and candidate ‘socialising’ for pending or upcoming opportunities. We are seeing candidates at the junior to mid-level park potential job searches as they don’t want to put themselves in a position of uncertainty.  
  • Planning for 2021 has started for some businesses, though many are still in ‘crisis’ mode and are therefore being more reactive and agile until restrictions have been lifted and life returns to the new norm. 
  • There is an expectation that after isolation concludes businesses will be more pro-flexibility after seeing that it can still a be productive and effective way of working. 
  • There is a realisation that life after COVID-19 will be different and whilst we don’t know what it will look like, the pandemic has challenged businesses to think differently, becoming more adaptive and agile.