Peaks, valleys and inventory challenges caused by COVID-19
- 17 April 2020
- By Scott Fenwick
The COVID-19 pandemic has brought much of the world to a standstill. But inventory must continue to keep moving in order to bring stability to customers and to the economy.
Manhattan is proud to be associated with many industry partners as they take a lead role in getting lifesaving and life-sustaining items to the general public. Over the last few weeks, we’ve been privileged to communicate with many professionals across our customer base. These individuals are doing incredible work to help make sure much-needed goods reach our communities despite the volatile swings we’re experiencing in supply and demand.
A number of these companies have come up with very creative solutions to overcome the challenges presented by COVID-19. The following is a small sampling of what we’re seeing, how we’re helping and ways to approach an uncertain future.
A tale of extremes
Coronavirus has transformed the way the world works, shops and lives. While some industries have been fairly stable in terms of inventory demand, it’s no surprise that for many companies things have been turned upside-down. Grocery wholesalers and pharmaceutical distributors have been incredibly busy, as have pet supply companies. Conversely, areas like foodservice for restaurants have seen demand suddenly evaporate. These radical departures from the norm create real demand planning issues because no one knows how long this “event” will last. And yet, there is a near-certainty that at some point it will end. However, we also don’t know what the new “normal” will look like. All of these factors create risk when it comes to inventory management. Depending on the items involved – if they have high price points, if they are perishable – excess inventory at the end of this outbreak can have significant financial impacts. At Manhattan, we are already considering and developing solutions to these longer-term questions.
In the short term, we’re working closely with our inventory partners to help solve immediate problems. For example:
- A grocery distributor is leveraging our solutions to override planning solutions and force larger orders for those products that are currently experiencing massive lifts in demand.
- Grocery, pharmaceutical and pet supply companies are all consulting with us on how to protect forecasts and keep demand data stable amidst an explosion in activity.
- A specialty retailer is using our inventory optimization tools to manage store closures, accommodate the associated shift in activity to ecommerce and start planning for the day when stores ultimately reopen.
Every industry, and every company, is different in terms of the obstacles they’re facing. We’re committed to working with all of them to meet the needs of their particular market, adapt to temporary shifts in demand and protect their long-term interests.
Sharing ideas for the greater good
In an effort to bring the industry together, Manhattan hosted a series of virtual Product Council meetings. The best minds in inventory – as many as 100 partners – came together to discuss challenges, share ideas and generate solutions. The spirit of cooperation and the many displays of teamwork have been inspiring. There truly is a determination to get through this situation together.
Based on the insights gathered, it appears that from an inventory perspective, this crisis is going to unfold and resolve in three stages. Obviously, the first is figuring out how to move essential inventory to meet current demand. The second stage will be a transition back to normal, either ratcheting down or cranking up business as quickly and as cost-effectively as possible. The third stage will be a “clean-up” of the numbers taking into account the peaks and valleys caused by the pandemic and the new “normal” as it becomes clearer. At this point, companies will need to accurately identify which data and demand trends are reliable for the future and then create accurate plans going forward.
At Manhattan, we certainly look forward to a time when that data clean-up process can begin. In the meantime, we are dedicated to helping our customers get through the daily challenges caused by this crisis. Inventory plays a critical role in the supply chain and it will be a key to the economy’s eventual recovery. We salute and are proud to work with the companies and individuals doing all they can to keep our economy moving forward.