Five companies that reset their supply chains

Unilever

Unilever offers a prime exam­ple of a multi­na­tion­al recon­fig­ur­ing its sup­ply chain in a fast-mov­ing cri­sis. The mak­er of house­hold brands such as Dove, Clear and Lux act­ed with agili­ty in switch­ing up its pro­duc­tion lines to new prod­ucts quick­ly. Demand for many of its house­hold clean­ing prod­ucts explod­ed around the world. But before Covid-19, one prod­uct — hand gel — was a rel­a­tive­ly small part of its glob­al busi­ness. Today, how­ev­er its hand gel brand Lifebuoy is set to be a [Euro] 1 bil­lion brand for the busi­ness.

To pro­duce hand gel at scale in weeks — increas­ing­ly capac­i­ty 600 times — Unilever adapt­ed its deodor­ant fac­to­ry in Leeds as well as oth­ers around the world. The change result­ed in the com­pa­ny launch­ing the brand in 50 new mar­kets in less than 100 days.

The Anglo-Dutch busi­ness has also trans­formed its 20-year fac­to­ry in Hefei, Chi­na, into one of the world’s lead­ing dig­i­tal man­u­fac­tur­ing sites. The oper­a­tion now has a dig­i­tal end-to-end ecosys­tem, using AI across the pro­duc­tion process, and allow­ing some oper­a­tors to work from home dur­ing lock­down.

The shift – already under­way pre-pan­dem­ic — to dig­i­tal­ly trans­form sup­ply chains has, as Unilever shows, accel­er­at­ed under covid-19.

“This cri­sis has high­light­ed that glob­al, agile, and adap­tive sup­ply chains are very much a com­pet­i­tive edge for busi­ness­es …,” says Vic­to­ria Cuth­bert who is the Head of Sup­ply Chain Home Care.

FitBakes

When the UK locked down on 23 March Ella Rauen-Prestes, CEO and founder of Fit­Bakes, the low sug­ar, high pro­tein cake mak­er, came up against an inflex­i­ble hauli­er, a import log­jam and a fac­to­ry at a stand­still.

Rauen-Prestes did not how­ev­er give up her per­ma­nent, well-paid tech job to let her two-year old start-up floun­der because of a pan­dem­ic. She sat down with her team to review the business’s sup­ply chain.

One of the first chal­lenges was to find a new sup­pli­er for the Bel­gium raw choco­late crit­i­cal to many of the prod­ucts. Fit­Bakes import­ed choco­late from a Bel­gium sup­pli­er but imports had dried up due to the Europe-wide lock­down. For­tu­nate­ly, she found a local back-up sup­pli­er for the short-term.

Rauen-Prestes also had to get the Northamp­ton-based fac­to­ry up and run­ning quick­ly. One of the pack­ing machines required two peo­ple work­ing close­ly but social dis­tanc­ing rules for­bad that. An inge­nious solu­tion pre­sent­ed itself, how­ev­er. Fit­bakes rede­ployed a mar­ried cou­ple, who worked else­where in the busi­ness, to man the machine in ques­tion.

Sup­ply­ing prod­ucts had also proved prob­lem­at­ic when the company’s reg­u­lar large hauli­er failed to rise to the chal­lenge, so she found a small local hauli­er. She has decid­ed to stick with the local com­pa­ny for the long term, as they are more agile at a crit­i­cal time, Rauen-Prestes says.

Tesco

When Tesco saw sev­en weeks’ worth of stock of some prod­ucts sell­ing out in one week in ear­ly lock­down, the super­mar­ket knew it had to act fast. The com­pa­ny worked close­ly with sup­pli­ers to sim­pli­fy ranges on the most in-demand prod­ucts, reduc­ing the num­ber of toi­let rolls in their range from 33 to 10 dif­fer­ent types, for exam­ple.

Tesco also cut mul­ti-buy pro­mo­tions so that sup­pli­ers could focus on meet­ing the increased demand. In turn, the super­mar­ket was able to boost its online deliv­er­ies to the most vul­ner­a­ble cus­tomers. These changes result­ed in the com­pa­ny hav­ing to hire hun­dreds more staff to ful­fil demand.

At the start of the pan­dem­ic, its online capac­i­ty grew from around 600,000 week­ly deliv­ery slots to 1.5m slots today, more than dou­bling online deliv­ery capac­i­ty in just five weeks. Its online gro­cery busi­ness has grown from around 9% to over 16% of Tesco’s total UK sales, ensur­ing that the busi­ness con­tin­ues to invest now and for the future.

Like some oth­er large retail­ers, Tesco com­mit­ted ear­ly on to pay­ing for goods on order, par­tic­u­lar­ly in the cloth­ing sec­tor, one of the sec­tors hard­est hit. Tesco paid on time and in some case ear­li­er than usu­al, for cloth­ing orders, and it cur­rent­ly retains those pay­ment terms.

Brompton

Back in April, icon­ic bike­mak­er Bromp­ton adapt­ed its sup­ply chain and pro­duc­tion to build up to 1,000 fold­ing bikes for NHS staff by launch­ing the Wheels For Heros crowd­fun­der. The aim was to raise enough funds to sup­ply NHS staff with bikes so they could get to work safe­ly dur­ing the lock­down.

Ini­tial­ly the com­pa­ny com­mit­ted pro­duc­tion capac­i­ty worth around £100,000 to fund the bikes, but the crowd­fund­ing dri­ve raised £344,785 in 78 days by 19 June.

Despite hav­ing to cut pro­duc­tion capac­i­ty due to social dis­tanc­ing on the assem­bly lines — each sta­tion is nor­mal­ly 1.7 metres apart — Bromp­ton didn’t lose a sin­gle day of pro­duc­tion.

The com­pa­ny is now pro­duc­ing more than 1,200 bikes a week despite the pro­duc­tion changes the pan­dem­ic wrought. In part its smooth-func­tion­ing sup­ply chain is down to the prepa­ra­tion the bike­mak­er achieved ahead of the pre­vi­ous Brex­it depar­ture date, which lat­er shift­ed to 31 Decem­ber 2020. In prepa­ra­tion for Brex­it last year Bromp­ton stock­piled parts from its over­seas sup­pli­ers.

What the pan­dem­ic has taught the busi­ness is that it is vital to embed agili­ty in all aspects of the sup­ply chain and wider com­pa­ny to ensure it is resilient for the future.

Snaffling Pig

For Nick Cole­man and Udhi Sil­va, co-founders of snacks brand Snaf­fling Pig, the pan­dem­ic not only forced them to reset their own sup­ply chain but that of oth­er snack brands, too. In ear­ly April they launched Start­up Logis­tics to opti­mise oth­ers’ sup­ply chains to refo­cus sales from retail to con­sumers.

The idea for an entire­ly new busi­ness was trig­gered by the huge loss of rev­enue for Snaf­fling Pig from its main cus­tomer base, pubs. The duo was left with ware­house space and sys­tems to spare. Not want­i­ng to waste their avail­able capac­i­ty and under­stand­ing that oth­er food and bev­er­ages busi­ness­es were fac­ing the same dis­rupt­ed and delayed sup­ply chains as them they estab­lished the new busi­ness. Start­up Logis­tics pro­vid­ed the ware­hous­ing, dis­tri­b­u­tion, cus­tomer rela­tion­ship man­age­ment sys­tems to get brands’ prod­ucts to con­sumers.

“We had to respond with real urgency – as a busi­ness we had to act faster and bet­ter than we ever dreamed pos­si­ble. With hos­pi­tal­i­ty and pubs rev­enue clos­ing, we went back to our real strengths; pack­ing, dis­tri­b­u­tion and sup­ply chain, and flipped all our ener­gies there,” Sil­va says. Con­sumers, stuck at home dur­ing lock­down and keen to treat them­selves, became a huge chunk of the Snaf­fling Pig’s busi­ness with the com­pa­ny see­ing a 200% sales increase.

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