It is already old news that online has seen an incredible growth during the last year and a half. What is still relevant and in a way new, is how logistics and supply chain businesses are navigating their way around the complexity of this growth and specifically omnichannel e-commerce. ‘For businesses that are focused on online operations, the pandemic continues to create a big market,’ says Kieran Donovan, Supply Chain Director at Heroes, for The Logistics Point.
Heroes defines itself as a technology-driven e-commerce company that acquires, operates, and scales small and medium-sized brands with category-winning products on global marketplaces. The company is focused on Amazon FBA brands with a proven track record of leading bestseller lists in high-growth niches.
‘Once people have enjoyed the convenience and the variety of shopping online, they do not go back,’ Donovan explains. He believes the pandemic has also expanded the reach of online commerce to segments of the society who were less confident about it. More people have realised there is no reason to be afraid of shopping online and the process can be straightforward and easy to do. Heroes expects that the shift to e-commerce for most consumers will be permanent.
What has become a dominant challenge over the last year and a half is how logistics and supply chains manage to respond to the new rule of people working from home. The system experienced a capacity problem because of Covid-19 measures when social distancing had to be implemented in warehouses. In addition, the industry had to deal with training thousands of people who have never before worked in logistics in conditions which didn’t allow for full support and the usual pattern of work to be implemented. ‘Further upstream the problem was how to replenish stock in order to meet the demand,’ Donovan continues. ‘We have had an evolution of this trend in the last 20 years but it has been massively accelerated in the last 15 months.’
Shifts patterns had to be changed to respond to the way consumers have changed their behaviour. ‘Evening shifts have become more important now,’ Donovan explains. To add to the complexity, the systems that need to manage the last mile directly to customer fulfilment are different to those used before.
Due to the volume of orders visibility became a crucial factor in operations and determines how successful each delivery is. An unprecedented level of micromanagement needed to be installed which drove a culture, infrastructure and processes change in the whole supply chain.
For companies like Heroes these changes have brought an expansion. Some challenges have arisen from other events like Brexit. ‘We need to manage our UK and EU stock separately now,’ Donovan says. The company also looks at keeping more safety stock in order to respond better to unexpected problems.
One of the most important lessons for Donovan during the pandemic was how to control growth. ‘In the Western world the focus of management has always been about making operations more efficient,’ he adds. ‘We have all learnt in the last 15 months that when there are challenges on the horizon it is sometimes better to spend a little bit more money on safety stock and capacity in your fulfilment centre.’
Heroes is exploring how it can improve its operations with that discovery in mind. The company is looking at resupplying on a monthly basis in order to evade any possible border problems.
The move might not be as efficient when it comes to movement of goods but it gives them the ability to respond to changes in demand more rapidly. ‘There has been a change in the mindset from absolute efficiency to being more agile in your operations,’ Donovan finishes. ✷