A Year into COVID-19: 5 Lessons Learned

Global value chains (GVCs) facilitate two thirds of world trade in our globalised economy, according to OECD, meaning that production crosses at least one border before final assembly or sale. COVID-19 made its first appearance just over a year ago, disrupting international supply chains with unprecedented national border closures and unpredictable changes in supply and demand.

GVCs have demonstrated an extraordinary capacity to withstand the hardest hits and continue to provide their service even in the most unfavourable conditions. This has taken great effort, sometimes even personal.

Hindsight is a luxury, as they say, and I can now see that the pandemic disruption has allowed us to innovate as a business, whilst reinforcing our values and also bringing some very important lessons.

First and foremost, we have learned that supply chain and logistics are indeed essential, and so are the people involved: transporters, producers, suppliers of handling equipment and everyone who plays a role in bringing life’s essentials to our shelves. It is with this recognition in mind that I can share what I think are the foundations of keeping the supply chain running.

1.    Agility and flexibility are the keys to business success

The unpredictability of the COVID-19 pandemic and the global political responses to it means all businesses now have to not just ‘talk the talk’, but also ‘walk the walk’ on flexibility.

Consumption patterns have changed and will continue to change at a pace we have not seen before. There is a level of unpredictability for everyone in the supply chain and increased pressure on companies, especially those who are market leaders. Being agile in our business and financial decisions is therefore an imperative.

Faced with fluctuating demand, sellers and distribution chains have needed a quick response from their suppliers. Strengthening our planning and achieving greater integration of our processes with our customers and partners have contributed to ensuring the continuity of supply chains. Measures such as increasing the frequency of our demand planning and contingency plans have helped us to maintain - and even improve - the service provided to our clients in such difficult times for the entire industry.

The closure of borders at the start of the pandemic forced many countries to start looking after their own local supply chains. This meant some brands began to switch their manufacturing processes from global to local production, allowing them to deliver to local retailers more quickly. The result of this is more micro-supply chains popping up around cities, helped by the growth of e-commerce. This move from globalisation to localisation will hugely affect operations. Instead of long-haul trips across the globe, in future we may see shorter journeys with fewer products and a trend towards buying locally-grown, in season, produce.

Internal processes have also been challenged by the pandemic. Many companies have seen their ordinary workflows turned upside-down, translating into smaller, agile and decision-making committees that can steer safely and quickly through unknown waters.

We can’t deny that digitisation has been an ally in becoming more agile. Adapting to remote working, automating processes or developing online tools to ensure lean and efficient work when physical presence wasn’t allowed wouldn’t have been possible without digital technologies, which are here to stay.    

2.    Collaboration in the supply chain is more important than ever

At CHEP we have always been convinced that the future of supply chain management is in greater collaboration. In some ways, the upside of COVID-19 is that the pandemic has given us a real-life scenario in which to demonstrate this conviction.

I believe collaboration in the value chain is critical, and it goes all the way from suppliers to end customers. It is this collaboration that allows us to innovate a common service offering and further ensures resilience of supply chains in times of crisis. And it is this collaboration that allows us to achieve our common sustainability goals and create a better planet.

Knowledge transfer and greater integration of our processes with our customers and suppliers are just some examples of how this collaboration can materialise. Another more tangible example is transport collaboration.

Collaborative transport is one of the best ways for us to help our companies become more effective, whilst also contributing proactively to fewer empty transport miles and lower carbon emissions. Thanks to our strong local and international network and scale, CHEP has unrivalled visibility of product and transport flows in Europe, which combined with the power of Big Data allows us to identify synergies and opportunities to share transport both between our customers and with CHEP. By identifying common transport flows, detecting the most efficient opportunities and sharing trucks, we can eliminate inefficient partial loads and wasted miles.

3.    Communication is a ‘must’

The COVID-19 crisis hit our economies and supply chains, but it also hit everyone on a very individual level. It was of utmost importance to us to make sure we were in proper communication with our employees. Keeping them up to date and ensuring that they had the proper tools to do their jobs safely has been a priority at CHEP over the past year. 

Equally so, communication is not just about informing, but also about listening to our employees. Aware of the personal toll the longevity of the pandemic can have on everyone, we have run several regional and local wellbeing surveys to ensure our employees’ needs are heard and they continue to be safe, comfortable and healthy wherever they work from. 

As much as communication is essential internally, it is also extremely important externally. Since the pandemic outbreak, we have maintained close communications with customers, authorities, retailers, suppliers and carriers. Through our multifunctional European COVID-19 Committee, our external stakeholders were regularly informed about our contingency plans, the health and safety measures at our plants and any new restrictions affecting our sites. They were and will continue to be put at the centre of all our interactions to better respond to any external challenges that might arise.

4.     The success of a business lies largely with a people-first approach

Henry Ford once said “Coming together is a beginning. Keeping together is progress. Working together is success.” It was thanks to the dedication and cooperation of our teams that we managed to continue servicing our customers throughout the pandemic.  

Protecting our staff was always our number one priority. This included ensuring that our plant-based employees were as comfortable and safe as possible, providing the appropriate Personal Protective Equipment (PPE) and cleaning processes, and extending safety measures to our carriers and suppliers, as well as encouraging our office-based employees to work from home when possible. We also counted on Subject Matter Experts who provided guidance on the virus and the measures to take. 

But alongside the physical protection of our employees, we also looked at the psychological consequences of the pandemic. Most of us have become used to working remotely and to seeing each other through a screen. Even face masks have become part of our outfits. But getting used to something doesn’t necessarily mean coping with it. Stress, depression, anxiety or phobia are just some of the mental health issues that have increased globally during the long-lasting pandemic. 

According to the International Labour Organisation (ILO)1, “women’s employment is likely to be hit more severely than men’s by the current crisis, particularly owing to the impact of the downturn on the service sector. At the same time, women account for a large proportion of workers in front-line occupations, especially in the health and social care sectors. Moreover, the increased burden of unpaid care brought by the crisis affects women more than men”, as ILO states. There is a risk of losing some of the gains made in recent decades and exacerbating gender inequalities in the labour market.

The role that we, as employers, can play in supporting the mental health and wellbeing of our staff is more essential than ever. Allowing flexible hours to achieve a healthy work-life balance, offering psychological assistance and guidance, showing empathy for individual problems and – again – listening, are some of the ways we can make our contribution to helping our employees to manage during this crisis and building a strong and motivated workforce. 

5.    COVID-19 will continue to change the way we work

One last takeaway from COVID-19 is that it has not just changed what consumers are buying, but also how they are buying it. Lockdowns and physical store closures in some instances have pushed people towards e-commerce solutions. Online shopping has become the main focus for many producers and manufacturers, and the key to remaining in business for many retailers. We can be confident that consumers’ digital-centric shopping behavior will continue in 2021 and beyond.

This has a direct impact on supply chains. The real estate agency, Savills documents a shortage of warehouses in Europe at present due to a record level of regional logistics investment in 2020, which, in turn, is thanks to a sudden surge in online shopping. A shortage of shipping containers is causing high delivery costs and long wait times and so businesses are adopting new strategies, like locating warehouses closer to their customers.

Digital technologies don’t just offer new ways of buying, but also innovative solutions for business delivery, such as the automated processes we have been able to put in place in most of our plants, or new working solutions that have allowed our employees to work remotely and adjust their work patterns.

The pandemic has helped us to identify areas for improvement in managing our time. We are learning, for example, to better identify the objectives and duration of our calls and to avoid filling our days with long and unnecessary meetings. Digital technologies have proven those of us who were passionate defenders of a result-based vs hour-based approach right – while always keeping the legislation of each country and the needs of each sector and position in mind.

By now, most of us might be used to the new scenario - which will last for a while – but we still have to balance health and safety, with work, relationships and the environment.

Now is the time to watch, listen and learn. And most importantly, to continue doing what we have been doing well in the past and to apply the many lessons learned. 

1. See ILO Monitor: COVID-19 and the world of work. Fifth edition – June 2020