Just In Time supply Chains and Covid-19

2 Min Read

The FT.com reported this week that Britain’s warehouses could be full in a matter of weeks. In the face of Covid-19 restrictions there are tens of thousands of containers congesting ports, non-essential supplies stuck in dormant retailers and more enroute that will not be replenishing sold items.

Supply chains have become super sophisticated, with many businesses operating on a just in time basis. Aligning manufacture, distribution, logistics, supply and demand had become a fine art, practised by many. Covid-19 has at least in the short term changed that.

The speed in which Covid-19 reached the UK meant that most businesses had little time to alter product supply demands. For most this had one of two pressures – huge demand surges and no product, or the reverse. But what happens to all this stock remains unclear. The machine often cannot shift its direction quickly, so in the short term there will be huge holes in most businesses supply chains.

Larger retailers and operators have systematically secured short term leases on some of the larger available stock. Some of this stock had been dormant for a little while. It is only as the take up moves into the smaller properties that the downward pressure become real. There is a very clear likelihood that businesses will need to be flexible. The most efficient becoming most exposed as the efficiencies do not start at their door. At least in the short term, they will need to adapt alongside flexible solutions. Where will surplus stocks be kept, how will space be created to guarantee a safer workplace, where will all the staff operate from, what role will technology play?

It could be that the challenges are relatively short term. Specifically, the measures a business will need to deploy for the Summer of 2020, could be entirely different to the environments needed in two years’ time. But what is clear, there is an almost immediate need that only lockdown exit will start to make clear – now is the time to anticipate and prepare.

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