Thriving in a supply chain transformed by COVID

Catch has opted for AMR technology to future-proof their warehouses.

MHD covers some of the key issues discussed at the Körber Supply Chain Elevate APAC conference roundtable on how to thrive in a supply chain shaken up by the pandemic.

Nishan Wijemanne, Managing Director, Asia Pacific for Körber Supply Chain Software, chaired a roundtable at the recent Körber Supply Chain Elevate APAC conference roundtable to discuss the subject ‘How to thrive in a supply chain transformed by a pandemic’.

The impact of COVID-19 posed significant challenges for global supply chain, bringing many existing issues to the forefront. In the aftermath of the pandemic, with organisations pushing for collaboration, resilience, and agility, Nishan asks his roundtable guests what the post-pandemic supply chain would look like and what strategies should companies put in place to strengthen their position moving forward.

Nishan notes that Catch.com.au – a leading e-commerce retailer and Körber’s customer – is one of the great success stories in Australia in recent years. With active customers doubling through the pandemic, he asks Ryan Parker, Supply Chain Project Manager at Catch.com.au what strategies his team is putting in pace to deal with the steep growth curve.

“It’s been both an exciting and a challenging time for us,” Ryan says. “First and foremost for us has been ensuring our team members within the warehouse work in a safe environment. Beyond that it’s been a matter of consistently meeting customer delivery promises, meeting their expectations, as well as devising ways of getting closer to our customers.”

With so many competing demands, Ryan says that a key notion for Catch has been to not become overwhelmed by the sheer volume of demand growth, but rather “take a step back” and re-align with the foundational principles of the company and shaping forward-looking initiatives around them.

“Starting with those principles that we use at Catch allows us to get a well-rounded view of what we’re trying to achieve,” he says. “Our customer is who we’re trying to look after, so we’ve worked to improve on our customer-centric network to bring us closer to customers, increase delivery speeds, and improve delivery options. That’s our first principle.”

Undergirding that foundational principle, Ryan says, are the additional principles of “flexibility” and “resiliency”.

So, what initiatives has Catch put in place to follow through on these principles?

“Catch’s main warehouse is located in Victoria,” Ryan says. “And a big initiative we’ve undertaken over the past 12 to 18 months has been working with Nishan and the Körber team to build additional automation into that warehouse. We’ve added over 100 AMRs into that existing Victorian footprint in order to meet additional demand. The rollout of this flexible solution has helped us with our picking and packing capacity to meet not just new peaks but an elevated new average throughput.”

In addition, Ryan says that a key Catch initiative has been to commission a new brownfield fulfilment centre in Sydney encompassing over 350 AMRs so that the company isn’t “bottlenecked” in Victoria – thereby increasing resilience – and is closer to the key NSW market.

But with the inherent unpredictability of forecasts three to five years ahead, Ryan says that Catch has opted for “modular” styles of automation – like the AMRs deployed in Victoria – so that they aren’t locked into too big a wholescale automation that might not be fit for purpose a decade hence.

With the impact of home-schooling and at-home offices, Nishan points out that Officeworks has played a key role in keeping the whole economy moving in the COVID-19 pandemic.

What was the biggest initiative Officeworks implemented to keep up?

Tom Weinmann, Head of Transformation at Officeworks, notes that Officeworks was already “very much an omni-channel retailer” prior to the pandemic. The challenge for them was coping with massive demand volume spikes.

“Like all organisations, we saw a huge spike in demand,” Tom says. “And it was across everything – education, early learning, arts and crafts, home-school, you name it – with spikes of 200 to 300 per cent a day, which placed significant strain on all aspects of our supply chain capability.”

The single biggest initiative that put Officeworks in good stead in the past 12 months, says Tom, was utilising and re-tooling the retailer’s existing store network.

“Now we have a store network where stores have a true online pick-pack capability,” Tom says. “When the pandemic hit, we took the opportunity to really enhance that. We built more capability into our existing store network, not only in terms of physical capability but also in terms of visibility for our customers.”

According to Tom, Officeworks used an order management tool that enabled them to draw inventory from any store for any customer around the country.

“We then worked on building a front-end engine that gave customers visibility around where the orders will be picked,” he says. “When you’re shifting from a store network to an essentially online network – with 200 to 300 per cent growth in demand – it would have been hard for our fulfilment centres to keep up. So, transitioning our store network and getting them enabled to fulfil online in a capacity complementary to our existing network of fulfilment centres was key.”

Mark Chaston OAM, National Innovation Manager, Border Express, contributed to the roundtable discussion with the unique perspective of a major logistics provider.

“Initially, like a great many others, we were gravely concerned in March 2020 for our future if – as many experts predicted then – global markets were to collapse,” Mark says. “Fortunately, that didn’t happen, and in fact what did occur really defied the odds – our business grew at a rate that it was frankly difficult to keep up with. The profile of shipments changed – bulk consignments got smaller, smaller parcel freight consignments become more frequent, and our customers were selling more products.”

Mark is refreshingly honest about the struggle for Border Express over the Christmas 2020 period, where although “we turned over a lot of revenue” and made a profit, “some of customers were upset with the service we were providing.”

He says that the company re-assessed its outlook from the vantage point of one of its key values – “to be real”.

“Post-Christmas-peak we took a really long hard look at how we’d become better,” Mark says. “We’ve introduced better S&OP planning to allow us to forecast with greater weekly accuracy. We’ve invested in and deployed additional hand scanning hardware to give our people and our customers greater transparency on the goods we’re moving. And we re-assessed some of our customer relationships, exiting some customers where we felt they weren’t right for us and we weren’t right for them.”

It was a real “reality check” says Mark. But the steps Border Express has taken and is taking were imperative to living up to their reality-focused value-set. This, Mark says, has been important in setting them up for the future.

“We’ve invested over $1.2 million to date in COVID-Safe work practices, including rapid antigen testing in our high-risk locations,” he says. “We’ve had to become more agile and more adaptive – and things change from state to state – but the challenges we’ve faced have really improved our overall operation moving forward.”

For more information on Körber, click here.

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