Since the lockdown began, I’ve been hanging out at my LBS (local bike shop for those uninitiated to the cycling community) and have been amazed at the volume of expensive road bikes flying off the shelves. This unexpected impact of the pandemic is due to the fact that while most retail outlets remain closed, bike stores have been deemed essential in the United Kingdom -- and because exercise is encouraged, cycling is garnering much well-deserved attention (and spending). The downside is that retailers are struggling to find stock and manufacturers simply can’t replenish inventory fast enough.
My supply chain background made me wonder, however, about whether the industry could have foreseen this drastic change in demand, and more importantly, how it could have been better prepared for the disruption.
While we have certainly never seen business interruptions like Covid-19 before, there are steps that can be taken to enable companies across all industry segments to be more agile and responsive to unforeseen fluctuations in supply and demand. Clues are hidden in the data, but the mountain of transactions makes it difficult to extract useful insights. The good news is that we no longer need to rely on spreadsheets or manual manipulation to obtain the information we need and new technology platforms can even connect multiple data sources to complete the picture.
I truly believe supply chains can be transformed by connecting the dots between data already being captured. This is why so much attention is being paid to digital initiatives that create visibility and leverage sophisticated analytics. In the retail world, this may translate into better collaboration between retailers and suppliers, particularly around demand data. When retailers and suppliers have the same perspective on demand and work together to understand changing consumer desires, they can collaborate to satisfy that demand. That may involve moving product from one geography to another, or changing production schedules to manufacture particular products, or postponing a new product launch; while not part of the initial plan, this ability to adapt based on a shared understanding of the current reality can substantially benefit both organizations. Once they have the relevant data and insights to address blind spots in the extended supply chain, companies can begin to address those gaps with integrated processes that enable agility and automate their response.
Data reliability is key: businesses must be able to trust that the data they are using to make business decisions is accurate and timely. Only then can processes be re-visited and updated to leverage integrated data and the resulting insights. Ultimately, artificial intelligence and machine learning can be employed to drive better decision-making. These transformations are driven by the need to become more agile and resilient, which has been accelerated by the Covid-19 pandemic.
So what will the impact of the sudden uptick in bicycle sales be on the upcoming holiday season? Since the holidays came early for some retailers in the form of incredible, pandemic-triggered demand, it’s up to both suppliers and retailers to harness existing data and keep both trading partners happy moving forward. In the meantime, I’ll be out riding my new road bike and dreaming about post-pandemic races.