COVID-19 has changed the whole economy in the world; it has brought a great challenge for both suppliers and 3rd logistics company (3PL). Social isolation has transformed customers’ purchase behavior completely overnight, disrupting, and stressing distribution activities. In this troubled situation, the demand for customers is almost decreasing, but some essential items like food and medicine are in the peak season. Besides, customers have shifted from buying offline to buying online, and then the delivery method in the supply chain has changed completely.
In this challenging context, we cannot know, “When can the economy recover when the current complicated situation changes. Therefore, The 3PL is impossible to continue going to the old path but is forced to implement new tactics to respond with customer changes. The most important thing is to practice more focused on building a faster and more flexible delivery process.
What challenges are 3PL currently facing?
When customers turn to online purchases, 3PL service providers must accelerate the distribution of goods. However, these enterprises are currently facing a significant problem that is labor resource scarcity. Many 3PLs are even competing with human resources for shops and other home delivery service providers; in many cases, 3PLs had to raise salaries to attract employees.
3PLs is not only a shortage of human resources but also a shortage of storage space. Only some large-scale companies have enough inventory deployment network, other units they are forced to rent inventory from different suppliers, and they will have to pay for another significant expense to meet the rising demand of our customers.
Overall, the cause of these troubles is that businesses do not have professional knowledge about what happens when a pandemic breaks out. Because there is not enough knowledge about e-commerce implementation, home delivery, nor any contingency plan for this situation, so, when the outbreak broke out, businesses could not keep up with the changes in the market, leading to lagging.
Tactics responding to the COVID-19
Health is still the priority
Of course, shortly, preventive measures for health remain a top priority. In addition to establishing policies for the entire company, such as checking the temperature at the entrance and setting a standard distance between work areas, each individual must protect himself and be responsible living to the community; they can do simple things like wearing a mask washing your hands often.
Businesses also need to establish safe handling of suspected positive cases for Covid 19.
Establishing safe distance
Covid 19 has brought a complicated problem for 3PLs; they have to connectivity between employees but still have to ensure productivity. Here are some methods that can help businesses overcome difficulties:
Changing work shift
Instead of one shift as before, we can divide it into several shifts; the goal is to limit the number of employees concentrating in one place.
Rearrangement of aisles
Change to one-way walkways to limit face-to-face contact between employees
Delineate working areas; areas should be far away and have a map of directions to avoid going the wrong way.
Changing meal times
Collective living areas such as kitchens will also be a place of risk for disease transmission. Therefore, companies with collective kitchens should divide meal times into different shifts to limit employee exposure.
To solve the problem of the scarcity of human resources, businesses should increase automation activities, such as using robots to meet productivity. Of course, this requires a considerable investment.
Strict management of idle labor
For businesses with few jobs and a surplus of human resources, the best solution is to coordinate with human resource brokers. They will be the center for job placement for personnel; this will both ensure labor income and reduce the economic burden for businesses. Similarly, they can also motivate warehouse brokers to rent out their warehouses.
Control the work shift of the personnel
The use of idle personnel management is very important for businesses that are facing problems with the scarcity of human resources. Without the close supervision of employee activities, companies will not be able to grasp each area’s working situation. This can lead to an issue that some region has scarce labor resources while labor resources are abundant in other places.
Another way is to combine with brokers to hire staff and warehouse of surplus businesses; this way, we can rent at a reasonable price.
COVID- 19 will also have a long-term economic impact and a serious impact on 3PLs. Losses in revenue may be slow, but if prolonged, it will bring the business down. To overcome the pandemic while ensuring productivity, companies need to equip themselves with basic knowledge in warehouse management. In addition to this knowledge, businesses can use Blue Yonder Warehouse Management System ( WMS) to operate warehouses more effectively.
Source: Blue Yonder