Looking back, the supply-and-demand challenges experienced by many can be attributed to supply chain management and consumer behaviour, according to Dr. Keith Willoughby (PhD), dean and professor of management science in the Edwards School of Business at the University of Saskatchewan (USask).
“There is no playbook for a pandemic,” said Willoughby. “It was new territory for supply chains and consumers alike because no one had dealt with a pandemic on this scale before. Consumer behaviour, combined with the general public’s response to a pandemic, precipitated panic buying and somewhat of a hoarding mentality.”
Ten months on, Willoughby believes the vaccine deployment news is having a calming effect on the behaviour of businesses and consumers, despite the steady wave of increases in COVID-19 cases.
“Supply chains are more stable now and consumers are doing a better job of self-regulating,” explained Willoughby. “Consumers have developed a higher tolerance for supply irregularities because they understand even though a product may be out of stock today, it’s not new territory and it will eventually be restocked. Businesses, in turn, have learned how to be more responsive to quick changes in demand from consumers.”
The just-in-time method Willoughby is describing ensures that businesses are holding small amounts of inventory while trying to economize and optimize their stock-keeping units (SKUs).
“Supply chains are focusing on those SKUs that are in high demand,” said Willoughby. “For example, industries facing an aluminum shortage are economizing their supply chain. Those manufacturers are focusing on core units as opposed to the different customization and variation you might see in non-pandemic circumstances.”
When it comes to the economy, Willoughby referenced the double-edged-sword analogy. Restaurants, movie theatres, and the gym sector have been dramatically throttled due to the pandemic, while it has simultaneously raised the profile of others.
“The nature of restaurants that focused on dine-in experiences and haven’t yet been able to transition to food delivery options or curbside pickup are at a big disadvantage,” explained Willoughby. “At the same time, travel restrictions have people looking to add new life experiences where they may not have focused before. You’re seeing other industries reap the benefits of the situation related to lumber, fitness equipment, Christmas trees, and so on.”
Looking forward, Willoughby advises businesses to focus on their value propositions in order to survive and thrive over the next few months in an attempt to weather the remainder of the pandemic.
“Identify what your customers find valuable and focus on the inherent value proposition,” Willoughby said. “For a restaurant, perhaps the value proposition wasn’t necessarily the experience, but simply the food. It may force some sectors to consider an alternative value proposition as a way of adapting to meet customer needs until the pandemic is behind us.”
As 2021 unfolds, Willoughby predicts another byproduct of the pandemic will be the declining use of cash. While cash is considered legal tender, there is a misconception that businesses have to accept every form of payment. By law, a business can choose its own form of legal tender for payment. The difficulty of this was superseded early on in the pandemic because there was a fear that the COVID-19 virus could be passed by handling bills and coins.
“I think what you’re seeing is the tipping point towards a cashless society emerging post-pandemic,” said Willoughby. “Canada was already known around the world for its low propensity towards cash usage. It has accelerated due to changing consumer spending habits as a result of the pandemic and the reliance on cashless transactions.”
Likewise, Willoughby feels there are lessons to be learned as a society to withstand the future, underscored by the RBC Humans Wanted report on thriving in the age of disruption.
“Our focus should be on supporting the retraining and skill-building efforts for our workforce,” said Willoughby. “Building the skills that humans will need and want going into the future is our biggest opportunity for our workforce to navigate the current and future job markets.”