This study sheds light on the retail industry in the UK to understand how companies such as Tesco and Sainsbury have dealt with the unpredictable situation that arises due to the COVID pandemic. This report includes relevant details about the supply chain and focuses on the utility of modern technologies and digital platforms in this situation. Relevant theories and models have also been applied in this context.
It is crucial for the organisations in the retail industry to focus on “transformational change” to deal with the adverse impact of threats such as COVID pandemic. Focusing on the SCM (Supply Chain Management) of companies such as Tesco and Sainsbury, which operate its services from the UK, might be taken into consideration. Depending on the agility of the SC these companies have paved the way for success in the global market. The role of digital technologies and “cross-industry collaboration” can be considered since these play a significant role in eliminating the risk factors.
SCA (Supply Chain Agility) refers to the capability of an organisation to profitably manufacture, as well as deliver a wide range of quality products, as well as services with a very short lead-time. For instance, the companies in the retail industry in the UK have to
focus on enhancing the value to their potential customers even during the COVID situation, which has affected the world economy.
After absorbing the initial shock of the global COVID pandemic the supply chain of the retail industry in the UK “stepped up” in mid-April to make sure that they continue to provide their consumers with quality services. Tesco focused on the buying behaviours of its potential, as well as existing consumers since there has been a significant change in this context. There has been a 30% uplift in the sale of grocery items as a consequence of the “panic buying swept” (Freshfruitportal.com, 2020).
However, before sharing its financial report, Tesco has made sure that the stakeholders are aware of its sales, as well as operational challenges. For instance, Tesco has hired 45000 more employees who have become an integral part of the SC of Tesco (Tesco.com, 2020). This has provided the organisation with an opportunity to deal with the “significant absence of colleagues”. Besides closing its deli counters, phone shops, and cafes the company has shifted its focus on expanding its digital platform “Grocery Home Shopping” (Essentialretail.com, 2020). This platform has been extended by 20% as customers prefer purchasing products online. More individuals have been recruited and $1bn unanticipated costs has been invested to maintain the cleaning routines in the stores to ensure the uninterrupted services provided by the supply chain.
Sainsbury has shifted its focus on deploying “Blue yonder” to take a customer-centric approach during the COVID pandemic. The company, which generally applies its “end-to- end” supply chain management strategies, has ensured that certain changes are adopted in the supply chain to ensure uninterrupted services to its valued customers. The multi-channel retailer possesses the capacity to undergo such a huge transformation to prove the customers with the required services in a cost-effective way (Sainsburys.co.uk, 2020).
Utilising Blue Yonder as the company’s ML (Machine Learning), as well as SaaS-based solution, has
helped Sainsbury to achieve sustainable growth. The SC of the company can be considered to be productive, as well as autonomous and this helps the leaders to apply modern technologies more effectively as per their requirements. AI-based technology provides them with an opportunity to monitor the ever-changing requirements of the customers. For instance, depending on the situation the company has focused on serving the aged ones before serving the other customers. Moreover, the decision-makers of Sainsbury depend on the “Luminate Control tower” to ensure complete visibility of the supply chain (Itsupplychain.com, 2020). The MI-based ordering solutions help the internal stakeholders to manage the perishable products as it is vital to apply effective marketing functions.
The 4RS theory requires the leaders of an organization to focus on “reliability”, “responsiveness”, “resilience” and “relationships”. For instance, companies such as Tesco in the retail industry rely on the AI-based automated WMS (Warehouse Management System) which enables them to respond according to the demand in the market. Furthermore, companies such as Sainsbury focus on improving the relationship with all its internal, as well as external stakeholders to make sure that they are well aware of the operational strategies taken by the company during the COVID pandemic. They further consider the relevance of functional resources such as process teams, cross-functional teams, and market-facing teams (Sainsburys.co.uk, 2020). For instance, the company uses 400 “stand-by “generators” in different regions of the UK to ensure steady demand response.
SCM integration model requires the authority to focus on sustainability policies during a difficult dilation. As per the views of Kumar et al. (2017), organisations require to consider the manufacturing procedure, transportation, return services, warranty, and outsourcing to meet the demand in the global market. For instance, companies such as Sainsbury ensure that the “functional silos” do not affect the overall integrity of the supply chain. For instance, online buyers are supposed to abide by the company’s policy regarding the warranty and return process in this context. Applying this theory has enabled Tesco to promote its “Grocery Home Shopping” platform. For instance, the SC of the organisation makes sure that the customers in the rural region are also provided with necessary products without any delay.
Coronavirus pandemic has affected the overall growth of the retail industry in the UK. Companies in the retail industry have faced a 3.1% decline in sales in October 2020 due to COVID (Theguardian.com, 2020). For instance, the consumer-facing areas of companies like Tesco are more likely to retain coronavirus and this can affect the overall health condition of the customers, as well as employees (Tescoplc.com, 2020). Moreover, the “hand touch points” in the SC are more likely to transmit the virus. The Checkout operation of both the companies can get affected since the staff working in the payment handling section is often unable to maintain the social distance. As opined by Ul-Hameed et al. (2019), it is crucial to provide the stakeholders with a healthy environment. However, failing to maintain the required 2m distance can lead to serious health issues and this would disrupt the overall organizational process.
The increasing levels of absentees in Tesco act as an impediment to the development of the organisation during this pandemic. The demand of the customers has increased since many of them got panic-tricken during the lockdown period. On the contrary, a lack of employees has not allowed the retail industry in the UK to meet the increasing demand of consumers. The non-availability of the essential products especially the food items provided by companies like Sainsbury and Tesco has affected its relationship with the potential, as well as existing buyers.
Congestion in the aisles in the stores further puts the lives of the employees at stake and the issues regarding manual handling have made it difficult for the “colleagues” or the employees of Tesco to move from milk stations to petrol filling stations. Freight transport has also raised the concern of the authorities in the retail industry since the availability of transport impedes the smooth workflow.
The violence towards the staff has also increased since it is challenging to make all the visitors cover their faces with masks. Thus lack of efficient employees has affected the quality of services in the retail industry and the excessive demand in the market has hindered the proper growth of the SCM of these companies.
Companies in the retail industry have applied several effective strategies to rebuild resilience as it is vital to retain the existing customers. As opined by Ebert et al. (2017), following the guidelines provided by the concerned authority during a crisis is vital to ensure the safety of all the stakeholders associated with a business. For instance, Tesco deployed the “Group People Safety Team” with the assistance of the external provider to commit legal audits. The team further has further ensured that the company focuses on its GPS share points and alternative suppliers who can provide them with the necessary assistance for maintaining proper hygiene within the supply chain. Companies in this industry have hired youths for delivering products at the doorsteps of the consumers. For instance, companies like Tesco are encouraging customers to use the cashless transaction method to avoid the transmission of disease.
Companies in the retail sector have organised several online training sessions for the employees to make sure that they are aware of the operational changes adopted by the authorities. For instance, Sainsbury has organised training sessions to help employees improve their communication skills especially with the customers who deny taking necessary precautions while visiting their stores in the UK. In this context, each relevant stakeholder of Tesco is provided with the “COVID-19 Point of Sale Brochure” to get accustomed to the new regulations (Essentialretail.com, 2020). NHS posters containing information about health safety have also been utilized by these companies to maintain rules regarding health safety
and social distancing.
The retail industry has ensured that the elderly ones and the informed ones are provided with essential products. For instance, both Tesco and Sainsbury are serving the NHS (National Health Services) workers first to deal with the shortage of supply of necessary products (Tescoplc.com, 2020). Furthermore, the additional “Grocery Home Shopping” slot does not require the vulnerable ones to visit the stores. Store Help Centres of Sainsbury ensure that they maintain strict rules regarding the opening and closing times of the stores.
The managers of the companies in the retail industry have applied a transformational leadership approach to deal with the negative impact of the COVID pandemic. Influenced by the ideas of Thürer et al. (2020), it is crucial for the managers to communicate effectively with all the relevant stakeholders belonging to the supply chain to understand the depth of the problems, which they face. For instance, managers of Tesco are entrusted with the responsibility to commence weekly audits and keep a record of the legal checks of the colleagues on a handheld device. They further ensure that they abide by the guidelines provided by the WHO (World Health Organisation) while serving the customers (Itsupplychain.com, 2020). Moreover, the managers at Tesco ensure that all the employees follow the “clean As You Go Strategy” to keep the area clean.
Sainsbury, as well as Tesco, has focused on lean thinking to reduce the lead time. As opined by Glushkova et al. (2019), focusing on time compression enables companies to supply the required product in time as per the demand in the global market. For instance, implementing AI-based software has enabled Sainsbury to forecast the demand in the market, and utilising an effective ERP (Enterprise Resource Planning System) has helped them to deal with the increasing demand for grocery items during the initial period of the global pandemic in 2020. The authority emphasises reducing consolidation delays, issues related to the short-term capacity of the suppliers, and delays in arranging payments by applying the effective method of time compression.
Collaborating with stakeholders from different cultural backgrounds helps the leaders in the retail industry to accumulate innovative ideas for managing the inventory. For instance, the “Design Products Team” of Tesco collaborates with Cisco to utilize 3 different kinds of “web 2 0-type collaboration” tools such as blogs, wiki, and a discussion forum to incorporate modern technologies into the system. They have collaborated with RCA (Royal College of Art) to provide 795 consumers with nutritious food items, which are safe for consumption. For instance, 520 individuals from all across the globe participated in the discussion forum, where more than 78 topics have been discussed (Tescolabs.com, 2020). Similarly, Sainsbury also allows experts from 60 countries. Moreover, the company has depended on its more than 2000 group members to provide them with the necessary assistance to manage the long chain of suppliers and vendors (About.sainsburys.co.uk, 2020). They have collaborated with NGOs such as Comic Relief as a part of their CSR (Corporate Social Responsibility). They further utilize their association with other sectors as a PR (Public Relation) tool for promoting the services provided by them during this pandemic.
Tesco has emphasised its internal relocation, return handling, cycle counting, cross-docking, and quality inspection during the pandemic as well. The company invests 20% of its management costs in managing the warehouses and they have focused on taking effective strategies to serve the community (Theguardian.com, 2020). However, both Sainsbury and Tesco have received complaints on its online platforms since they failed to satisfy the huge number of customers during the pandemic. On the contrary, Sainsbury has adopted several policies regarding return and warranty to ensure a fresh supply of perishable products to the customers. They apply collaborative methods such as traditional supply chain, replenishment, and forecasting to understand consumer behaviours.
Companies in the retail sector has considered the significance of AD, which enables them to apply 3D painting. For instance, companies like Tesco use CAD (Computer-Aided Design) as an alternative to traditional manufacturing to attract the attention of consumers.
BDA, which is regarded as a complex procedure is used by companies such as Sainsbury to obtain hidden patterns, market trends, customer trends, and correlations. However, the “humanalysts” play a crucial role in analysing the data by applying “fresh thinking” to run 1300 stores.
Companies like Tesco in the UK utilize IoT (Internet of Things), which is a network of certain connected devices. This helps them to communicate with the stakeholders in the SC to enhance the overall experience of the customers.
Organisations such as Sainsbury utilize personalised Omni channels effectively to use the data provided by the consumers. This process allows the company to provide them with a customised experience depending on their preferences and buying habits.
The data provided by the customers are added to the blockchain. Utilizing this decentralised blockchain has enabled the companies like Tesco to distribute products in the market during the COVID pandemic. The retail industry has depended on the cryptocurrency, which serves a great purpose in the Bitcoin network.
As per Little’s law, the average number of products in a queuing system is supposed to be equal to the average rate at which the products arrived and it is multiplied by the average time a particular product is kept in the system. For instance, deploying “Blue yonder” has made it easy for the staff of Sainsbury to serve more customers more efficiently at the store (Sainsburys.co.uk, 2020). Moreover, this procedure has enabled the organisation to ensure the health safety of the consumers by avoiding the huge number of visitors at the store at a particular point in time. On the other hand, applying modern AI-based technologies have helped the retail industry to serve a wide range of customers at the same time by allowing them to order products through online platforms.
Companies in the retail industry have applied various strategies to service the consumers in
the prime regions. Furthermore, due to the unavailability of transport, it has been difficult for
the regional centres to serve the consumers in remote areas. In this context, Sainsbury and
Tesco have depended on the members from the local communities to ensure uninterrupted
services to those regions. For instance, applying proper refrigeration and air conditioning
systems has helped the companies to keep the food items fresh.
Collaborating with the internet service prices will ensure further improvement since the companies in the retail industry will be able to serve the customers in remote areas. This will enable the companies to gather relevant information about the customers in those regions as well.
Depending on the local vendors can help the companies to reach a wide range of audiences during this pandemic. Collaborating with the local shops can help the retail giants to meet the needs of the customers and this will further enable them to reduce transport costs.
Organisations in the retail industry require investing huge amounts of capital in ensuring that proper hygiene is maintained throughout the process. Considering that AI-based services have helped the retail industry in the UK to deal with the investment demand in the market during the COVID pandemic. Collaborating with organisations from different industries have helped companies like Tesco and Sainsbury to adopt transformational changes in the last few months. Depending on the online platforms and abiding by the health-safety routine has helped them thrive during the pandemic.
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