Logistics & Inventory Management: How To Do it With a “No-Contact” Policy

Inventory Management

This is a guest post by Reese McKnight. Reese is a sales veteran and editor over at JookSMS, a messaging platform for teams and customers. Hailing from Royersford, Pennsylvania, she started out as a sales assistant in local advertising. Her favorite pastime is trying out new cuisines and board games.

Widespread business changes, caused by COVID-19, have affected global trade and supply chains significantly.

Hundreds and thousands of businesses around the world are having to navigate newly implemented no-contact policies for the safety of both themselves and their clients.

What does this mean for logistics & inventory management?

This question, and more, will be answered in this Process Street as we go through the following topics:

Ready?

Logistics & inventory management: What’s the current state of play?

Before we dig deep into how logistics can work in the new world of “no-contact” policies, we first need to understand how logistics & inventory management has been affected by COVID-19, in general.

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Many countries have stopped or restricted international travel, which has caused a frustrating slowdown in the movement of goods between borders. Airfreight capacity has been limited to operational cargo aircraft only, while the shipping sector has been affected by slower processes and hefty paperwork requirements.

Because raw materials and manufactured goods have been prevented from reaching ports, the demand for raw materials has dropped drastically. This has meant that air carriers and shipping lines are running under-loaded which is disrupting the delicate balance between revenue and operational cost for many businesses.

Companies of all sizes in every industry have had to wrap their heads around delivery delays, difficulties in obtaining goods, unexpected transit issues, and staff shortages.

Essentially, the gap between supply and demand has grown exponentially over the past few months alone.

But it’s the recently implemented “no-contact” policies that have made it all-the-more challenging for businesses to operate at full steam. Sectors like electronics, fashion, and household goods have been hit hard with reduced demand during lockdowns.

No-contact policies in logistics & inventory management

To understand how no-contact policies have truly affected businesses, you’ll need to understand what they entail.

What is a no-contact policy?

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In simple terms, a no-contact policy is a protocol that minimizes contact between parties to ensure the safety of all involved.

In the case of a pandemic such as COVID-19, thousands of businesses have adopted no-contact policies to:

  • Keep staff members safe
  • Prevent and reduce infection rates
  • Assure customers that they can continue to use their services or products safely, with minimal risk

For example, many local restaurants have recently switched to offering take-outs instead of traditional sit-down meals because it reduces the contact that people are likely to have, yet still allows for operations to continue at a somewhat normal pace.

However, even the bog-standard food delivery system poses contact risks. Some savvy businesses have worked around this by implementing no-contact delivery systems.

Once a customer has pre-paid for their order, a delivery driver brings it to their front door, sets it down, rings the doorbell, and then leaves.

This completely mitigates human contact and allows customers to enjoy their delivered meals without putting themselves or the company’s delivery workers in the proverbial line of fire.

So, how can you successfully manage your inventory and logistics when no-contact is essential?

4 steps to help you manage your inventory with a no-contact policy

The best thing you can do to manage your inventory in a no-contact world is to adjust the future forecasts of your products and services.

The world has changed so quickly over the past few months, and adjusting your future forecasts is essential to help you stay ahead of the game. Most forecasting systems base their future demand forecasts on what’s commonly known as a time series model.

Essentially, these time series models base future demand predictions on past sales and usage histories, making the assumption that what has previously sold well, will also sell well in the future.

But recently it’s become incredibly difficult to predict future demand in this way. For instance, your business has probably experienced several significant upswings or downturns in demand for certain products since March, right? It’s likely that these unpredictable trends will continue, which will warrant more flexibility in terms of your future predictions.

Thankfully, there are four steps that you can take to adjust your forecasts and become more flexible:

Step 1: Adjust your sales usage

For items that have been affected by COVID-19, adjust the sales usage so that it’s equal to what it would’ve been under ‘normal’ business circumstances.

For example, you could adjust these numbers to balance with your February or March sales figures, as the pandemic would not yet have affected your sales during those months.

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Certain forecasting systems automatically correct your numbers in the case of drastically low sales, using a smoothing algorithm. Others will enable you to generate an unusual usage report and then enter your own adjustments to override the current algorithm.

Say, for example, you were a pen distributor and you sold 100 fewer pens than you would normally in a month. You could manually add those items as a usage adjustment into your inventory system.

Step 2: Assess the difference between the forecasts for each item

Generate an inquiry to assess the percentage difference between the forecasts for each item before and after your sales patterns changed.

As an example, if your March forecast for a product was 100 pieces and you only sold 50, the percentage difference would stand at – 50%. Alternatively, if your March forecast was 100 pieces and you sold 120, the percentage difference would clock in at +20%.

Step 3: Increase or decrease the forecast

Increase or decrease the forecast that your system calculates by using the percentages you determined in the previous step. Certain systems will allow you to do so by punching in a collaborative percentage, or an estimate of how your future demand will vary according to what you’ve sold in the past.

You may also be able to manually correct the demand forecasts, depending on the inventory system you use.

Step 4: Make final corrections

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Make final corrections to your resulting sales forecasts using other valuable information from your business. You can get this from your sales team, management team, trade associates, and even your customers.

Rope your entire team in to collaborate and brainstorm any factors that could affect your future sales figures. The more data you can use to make your adjustments, the more accurate they will be!

Use these completed forecasts for your stock replenishment plans to ensure that you don’t under- or over-order stock.

7 top tips help you manage logistics with a no-contact policy

Logistic companies around the world have found innovative ways to respond to the COVID-19 pandemic. Some customers and businesses may not have noticed a difference in their abilities to purchase and sign for shipments from physical or online suppliers—but behind the scenes, the logistics industry is hard at work.

International supply and demand have a lot to do with the functionality of logistics at the moment. Lower supply leads to heightened costs, so for businesses, price sensitivity is essential. Keeping your product and service costs reasonable to offset potential increases in logistical costs is fundamental to successful operation during this type of crisis.

Here are seven key tips to help you maintain a smooth logistics process, even with a no-contact policy in place:

1. Create a crisis management plan

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Smart companies were quick to develop and implement crisis plans at the start of the pandemic to stay ahead of the pack. Thoroughly tested crisis management plans improve your ability to deal with sudden supply chain interruptions.

2. Find multiple sourcing avenues

Keep your options by having multiple logistics companies, manufacturers, or carriers on board. If one avenue lets you down, you’ll be less likely to experience devastating halts in operations.

3. Be flexible with your rates

Crises like COVID-19 can significantly drive up logistics rates due to higher demand, pressure, sanitization requirements, and dozens of other factors. Be prepared for rate flexibility, or to shop around for the best deal you can find. You can always switch back to your preferred logistics experts later down the line, but it’s important to do whatever works for your business in the present. The ‘new normal’ is anything but normal, and adapting is essential.

4. Create, follow, and continuously improve processes

Processes provide structure for your business operations. They make sure that tasks get done at the right time, in the right way, by the right people, at the right time. So, creating and following processes during this unsettled period means you can be prepared for anything. It means you, your team, and your suppliers know exactly what to do and when to do it. You get full transparency over the processes your team is completing, but zero contact is needed.

For instance, say you were using a business process management (BPM) platform, like Process Street, to create and follow your operational processes. You could create a set of process templates for each recurring task you need to complete and then share them with your team and suppliers. They can then run individual instances of those templates, as checklists, each time they need to complete a particular process.

Like the below Warehouse Safety Checklist for example:

Follow this process to make sure that everything in your warehouse is up to standard and that your employees are safe and sound.

Click here to access the Warehouse Safety Checklist!

Or, why not create and follow COVID-19 specific processes to make sure your staff are safe at all times? Like this Daily Office Safety/Health Checklist for Onsite Personnel, for instance:

Ask your team to follow this process each day before reporting to work, so they can check for COVID-19 symptoms and limit any further spread of the virus.

Click here to access the Daily Office Safety/Health Checklist for Onsite Personnel!

(You can use both of these templates for free. Either add them to your account or sign up for a trial).

You can assign tasks out to your team or suppliers, set deadlines, and track their progress, all without contact.

Add approval tasks to your processes so you can approve or reject key decisions, include stop tasks so you can make sure your team is completing their tasks in the right order, and connect your processes to the apps you use to automate manual tasks. All from afar.

Read this post and watch this video for a quick demo:

6. Maintain open communication

Sometimes, the chaos caused by unexpected events like the COVID-19 pandemic is unavoidable. Aside from implementing no-contact policies and other protective protocols for your business, the best thing you can do to keep things operating smoothly is to communicate openly at every step of the process.

Your priority is to communicate clearly with your suppliers, logistics managers, and team members to find solutions to any challenges you might face. There’s no point in pretending that everything is fine and dandy. Every link in your supply chain needs to work together to get things done, navigate obstacles and delays, and keep your team safe, and out of harm’s way.

Be realistic about your logistics & inventory management. Try not to overestimate how much product you’ll be able to sell over the coming months, even if you truly need the business. Take logistical delays in your stride and find logistic companies who are willing to work with you to serve your customers safely and in a timely manner.

7. Be honest with your customers

Your customer base is arguably the most important part of your business’s operations as they’re the ones who are bringing in the money. Being honest with them about any challenges you’re facing is a great way to foster a strong connection.

I mean, you won’t want to discuss your logistics and inventory issues in detail, but if you’re experiencing shipping delays or product shortages, your best bet is to be open and honest with them. Show them that you’re ready to face these challenges head-on. Keep them updated and offer alternatives where necessary.

Your marketing strategy should also be updated during times like these. Significant changes offer you a chance to implement clever new social media, email, or SMS advertising campaigns. Show your customer base that you’re aware of current challenges in the world and that you’re addressing them creatively.

Your customers will always remember how you make them feel, especially during such a challenging year when they could all do with a virtual pick-me-up.

Logistics & inventory management in a nutshell

Implementing a no-contact policy doesn’t have to hinder or slow down your business’s operations. There are many ways to ensure that your inventory and logistical solutions stay up to date and functional, even when issues like pandemics threaten the status quo.

Our best advice is to remain realistic and practical at all times and seek creative solutions to any challenges you encounter. Be aware that delays and problems are highly likely, and use collaborative thinking to stay one step ahead at all times.

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‘No-contact’ should also only extend to physical contact between parties when you’re running a company. Use modern communication methods like email, telephone, and social media to stay in touch with your team, clients, and customers safely.

So many businesses have switched physical operations to virtual ones using digital tools that are freely available today. Thanks to cutting-edge tech, it’s never been easier to implement a no-contact policy and still run a business smoothly.

We’d love to hear how you’re managing your logistics and inventory during these difficult times in the comments below. Who knows? You may even get featured in an upcoming article!

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Amanda Greenwood

Amanda is a content writer for Process Street. Her main mission in life is to write content that makes business processes fun, interesting, and easy to understand. Her background is in marketing and project management, so she has a wealth of experience to draw from, which adds a touch of reality and a whole heap of depth to the content she writes.


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