How have industries dealt with pandemic-related supply chain issues?

Though the long-term impacts of the pandemic will not become apparent for a long time, short-term impacts, especially within the retail industry, have been very clear, and how businesses have handled these challenges has varied greatly. 

The last 18 months have seen the toughest challenges retailers have faced in living memory. With lockdown forcing millions of consumers to shield at home online retail demand has soared while high streets have been decimated. Restrictions on cross-border travel have disrupted supply-chains, while limits on worker numbers have hampered production lines.

Food retailers, such as Sainsbury's and Morrisons with their just-in-time method of supply chain management were unable to cope with the initial surge in demand driven by panic buying at the start of the pandemic. Though production eventually adjusted to the increased demand, for a significant period restrictions were imposed on the purchase of certain essential items, such as eggs, flour, milk, and toilet paper. To meet the increased demand suppliers and food retailers were forced to expand warehouse capacity, hire more delivery drivers, while also contracting out delivery to third parties.

One industry that saw an unexpected increase in demand was bike manufacturing. Quieter roads and more free time, among other pandemic-related factors, resulted in sales being up 45 per cent from the same time in 2020. Sports retailer Decathlon reported increases of 170 per cent and 65 per cent on electric bike and road bike sales respectively. However, a global supply shortage of shipping containers forced manufacturers to re-examine their supply chains, looking in particular at more domestic suppliers to keep up with demand. One British manufacturer, Brompton Bicycle, also had to commit to ordering supplies two years in advance simply to secure sufficient supply in the short-term. This is something manufacturers are keen to avoid doing, however, as unlike food demand for bikes is elastic. They are hesitant to increase investment in production in case demand falls.

Fashion retail has also been heavily impacted by the pandemic. Some retailers have seen a significant surge in sales, while others have collapsed. Demand initially fell as people stayed at home and the need for formal clothing for work and social gatherings fell. As a result, many retailers had to cancel significant orders from overseas suppliers at the start of the pandemic. However, overall demand began to surge as consumers sought out comfortable clothing to wear while working from home, including jogging bottoms and leggings. This change prompted adjustments in origins of supply, with some brands having to temporarily move out of China while it dealt with its initial outbreak. This shift was made possible through the flexible nature of fast fashion supply whereby product supplies are based on shorter life cycles of weeks as opposed to months.

One online retailer, Wholee Prime, has previously spoken about the challenges it faced during the pandemic, particularly as a new entrant disrupting the world of online retail. The company's spokesperson, Eleanor Thomas, has previously set out how the company had to act quickly to ensure delivery wasn't disrupted by the pandemic.

She discussed the challenges the company has faced to meet sustained increases in demand, while also ensuring the safety of its suppliers during this global health crisis.

Driven by the retailer's commitment to only pay customers for the production costs on the items it sells, membership numbers for the app-based retail platform have soared to well over 100,000. Set against this, however, has been the challenge of meeting demand when the global transport of goods is more difficult.

To overcome these challenges, while also improving customer experience, the retailer has taken steps to standardise sizing on the clothing items it sells to ensure customers don't feel the need to order multiple products of different sizes with the intention of sending back the ones that don't fit. This ensures customers get the product they need, while their suppliers can be more efficient with their stock levels.

As parts of the world begin to look to the future, as do retailers who have had to make fundamental changes to their supply chains and businesses. Changes such as those made by Wholee Prime can only be positive, but issues around long-term supply of parts such as those faced by Brompton Bicycle are more worrying. These businesses will hope that the pandemic has instigated a permanent change in customer demand, so that the gamble of their long-term investments pay off.