As we face empty supermarket shelves, we have never been more aware of retail logistics. But how can we support them when they are stretched?
Over the past week, we have learned a lot about “flattening the curve” of infections to keep our health service afloat. But ahead of the healthcare infrastructure, another essential service is already being overwhelmed by an unprecedented demand surge – our supermarket supply chains that all of us rely on for food and daily necessities. Just walk into any neighbourhood supermarket, and you will find aisles of vacant shelves – especially those for toilet rolls, canned food, and frozen food. Check-out queues are many times longer than usual. Online supermarkets are completely overwhelmed with the surging orders. Waiting times for deliveries from Tesco, Sainsbury’s and Asda have gone up to over a month. Ocado has just suspended its website to stop new orders from flooding in. It is foreseeable that things will continue to worsen as schools close and even cities go on lockdown.
The goal is to avoid feeding sudden spikes and fluctuations
To protect our essential retail systems, it is helpful to understand how these supply chains work. Just as our healthcare system is not designed to accommodate everyone falling ill at the same time, our supply chains do not have nearly the capacity to deal with everyone trying to shop for the next three months’ supplies at the same time. Supply chains work best when demand for products is stable over time, i.e., when the curve is flat.
Sudden fluctuations, such as a spike in toilet roll sales, could trigger ripple effects through the entire chain: warehouses run out of stock to supply the local stores, and factories ramp up production to replenish the warehouses. The problem gets worse over time. Very soon, shoppers who have bought hundreds of toilet rolls will soon find that they won’t need to buy any for the next year, and demand can plunge rapidly whilst production is still ramping up.
Many on social media have criticised panic buying behaviour as irrational, and others have defended them as logical. Indeed, a part of panic buying can actually be explained (though not necessarily justified) by supply chain theory. Each of us is playing the role of a supply chain manager for our home supplies. Each trip to a crowded supermarket is a risk, making replenishment costly, so it is logical to shop less frequently and in larger quantities (in supply chain jargon, “cycle stock” goes up). When future supplies are uncertain and there are fears that supply chains could be shut down, it is logical to store some safety supplies (“safety stock” goes up). The problem is such logic is optimising locally, but ignoring the possible impact our change of shopping patterns will have on the upstream of the chain. In supply chain management, the well-known “bullwhip effect” theory suggests that even small fluctuations at the demand (consumer) end of the chain can propagate and magnify upstream, and the whole supply chain can spiral out of control. To avoid this, it is important that each player in the supply chain (us in this case) behaves in a way that takes the whole chain into account, and irons out these fluctuations as much as possible.
There are a few practical ways that we as shoppers can also help “flatten the curve.” The goal is to avoid feeding sudden spikes and fluctuations to the supply chain, to make sure the demand profile is as steady and continuous as possible.
1. Keep it regular
Plan carefully about what we need and how much we need. While there is a lot of uncertainty in this crisis, the consumption rate for most items should be quite predictable. If we foresee to shop once a week, try not to buy much more than one week’s supply for each product. As the pandemic could last for an extended period, try to make sure your shopping patterns remain as stable as possible over the period.
2. Work together
Pool your stock with your community and friends if possible. If you find that you have bought too many toilet rolls and your neighbour has too many bottles of pasta sauce, it eases the burden on the supply chain if you share among yourselves rather than each going back to the store to buy what you don’t have.
3. Maintain a range
Where available, try to spread out over a broader variety of products. As an ethnic minority, it’s natural for me to switch to things like ramen noodles when pasta runs out, while it could be harder for others. Spreading out your demand among substitutable products can help flatten the curve.
4. Optimise online deliveries
Make the best use of online deliveries. The bottleneck of online retail fulfilment is often the last-mile delivery leg. It can help flatten the demand for delivery trips if residents in the same neighbourhood could pool their orders together. This is already being done by volunteer groups who are helping vulnerable groups (e.g., elderlies in self-isolation) with their shopping. These community-based efforts can be more effective when better coordinated.
There can be many other ideas. But, in general, it is key to be mindful of the impacts our shopping patterns have on the supply chain, and help keep the system afloat by flattening the curve. This is an unprecedented challenge, and we can all help even if we are simply rethinking how we shop.
COVID-19 is impacting our lives in many ways. Read more of our coronavirus coverage.
