After COVID-19 was classified as a pandemic, many city and state governments in closed non-essential businesses, which left the restaurant business—among others—in the lurch. On the other side of the coin, grocery stores are booming like never before. It’s still complicated though. How do you move products across the country and the world when there’s a pandemic?
It all starts with the supply chain. And from here on out, a strong supply chain needs to be the heart and soul of every operation. You can have the best cereal in the world, but if people can’t get it when they want it the most, what does it matter? Through the coronavirus pandemic, we’ve seen how cities, towns, and countries are working to make their goods move from warehouses to store aisles as efficiently as possible.
Movement from manufacturer to distribution center to the customer’s hands is a precise dance of technology, planning, and execution. With everything upended due to the coronavirus, people are eating at home more, which means grocery stores are seeing products fly off the shelves. Grocery stores from small IGAs to the supermarkets are all being tested. They’re learning about how they can limit foot traffic, but also how to be more efficient than ever.
When news coverage of the virus started ramping up, we kept seeing the same images: empty supermarket shelves. Most major chains weren’t prepared for the onslaught of customers hoarding toilet paper. Looking back on it, did anyone see that coming?
However, two chains stand above all others, always keeping up with customer expectation and demand.
The Lone Star State’s greatest grocery store
Down in our home state of Texas, beloved chain H-E-B anticipated the coronavirus outbreak long before it actually hit American shores.
If there’s anything you need to know about H-E-B, it’s that Texans love the brand. To a Texan, while they love Whataburger and Buc Ee’s, there is no star that shines brighter than H-E-B. People trust the brand over and over again because it’s shown that it will find new ways to improve the shopping experience—rain, hurricane, or shine.
H-E-B has clinics inside the stores, is constantly working on new preparedness programs, and invests heavily in the future. Because of their culture of thinking ahead, H-E-B had been working on a pandemic and influenza plan since 2005, after seeing the H5N1 outbreak. Then, in 2009 when H1N1 and the swine flu hit, they refined their processes again. Internally, the company set up a taskforce to plan and map out just what they’d do if a pandemic ever struck Texas.
Investing in the long game
In regular times, H-E-B constantly tweaks how they can deliver service and products to their communities. If something is a hot seller in one area, but not in another, H-E-B recognizes the data and alters the supply chain. Moving pieces around for effectiveness is something the brand has experience with.
The pandemic transformed the country in weeks. Almost immediately, the chain saw trends: there was a run on supplies like flour, bread, eggs, milk, soap, and hand sanitizer. Essentials—grocery staples and disinfecting products—became the most important items to stock. To keep the supply chain moving to serve a larger number of people, H-E-B limited certain products customers were able to purchase.
Putting the supply chain to the test
Back in January, once news of the virus started spreading, H-E-B’s leadership started planning for worst case scenarios and stayed in constant communication with retailers and suppliers around the world. Because H-E-B has product partners in China, they paid attention to how the pandemic was affecting the country. Then, they looked at Italy and Europe to better understand the outbreak, how it affected grocery stores and employees, and how it altered shopping behaviors. To plan and prepare, they thought about how they handle hurricanes in the Houston metro area, the fifth largest in the nation.
How could H-E-B manage? How would they respond with current resources, as well as what resource opportunities would they have access to? All of these things mattered when dealing with a pandemic. When Texas began shutting down, H-E-B stepped up. In spite of all of the people crowding the stores, it was never chaos.
Because volume was higher than anything the company had experienced prior to the pandemic, people from all areas of the company stepped up to fill orders for locations across Texas. H-E-B changed their hours to make sure shelves could be stocked and products could be moved – a lot of groceries were coming in.
To ensure the supply chain was working to its full potential, and supplies were going out across the state, H-E-B took the next step in preparedness: they opened their brand new Emergency Operations Center in San Antonio. The EOC is considered H-E-B’s war room, a place to strategically plan and look at how the product is moving. Here, they can look at what areas of the company are impacted. Leaders in those divisions are brought in. Together, company heads adjust what’s available to stores and their customers based on what suppliers can bring in and the quantities in which they can reasonably do so.
Following the coronavirus trail
Supply chain management needs to be creative about what and how they’re sourcing, thanks to constant shortages of products. Down here in Texas, the focus has shifted to staples and products themselves. H-E-B has shifted from stocking a large variety of pinto and black beans in their usual designated section to stocking them in full pallets at the center of the store. Consumers might see smaller brands in place of larger ones when it comes to items like paper towels or hand sanitizer. Currently, the priority is meeting underlying needs, not necessarily catering to the brand preferences of pre-pandemic buying behaviors.
However, while H-E-B is used to dealing with hurricanes and the localized problems they cause, hurricanes aren’t pandemics. Hurricanes last for a few days. Then management can prioritize damage control. The coronavirus pandemic is a global, ongoing affair. Unlike a hurricane’s local impact on supply chain decisions, a situation in which stores can pull products from different parts of the country and deliver to Texas, the pandemic’s impact isn’t concentrated in a particular region, so stores across the country (and in others) are facing similar shortages.
Fortunately, instead of letting that cripple their supply chain, H-E-B found partners in-state to help.
Labatt is a food distributor whose primary customers are schools, institutions, and restaurants. Because their regular customers are shut down, the company has partnered with H-E-B to deliver goods like deli meat, rotisserie chickens, and other products. Because Labatt can help with trucks and drivers, that’s a huge win, despite the circumstances.
One shining moment is that many of the smaller Texas microbreweries are stepping up to help fill the coolers in H-E-Bs around the state. While some of the national brands are struggling to keep orders moving on the road, Texans are getting to taste brews made right here in the Lone Star State – just like the beer.
Some of H-E-B’s biggest hurdles have been supplying meat, eggs, and poultry. The company had to accelerate opening a new warehouse in Houston as a touchpoint for only housing these specific items. The pandemic has forced H-E-B to run its meat plants 24/7 and only focus on the top fifty cuts to keep up with constant demand.
The situation is continuously evolving, and there doesn’t seem to be an end in sight. While Texas is set to begin opening back up in phases, there is no promise that cases won’t spike, and we could see different measures taken. The leadership at H-E-B understands this and is working on adjusting expectations as much as possible. They’re still monitoring China and Europe and will continue to do so as the situation unfolds.
There’s a reason Florida loves Publix
Down in Florida, Publix invested in its supply chain technology long before any of us were thinking about a pandemic, instead, they’re just to hurricane planning, but also serving one of the country’s most populous states. Publix operates more than 1,200 stores across Florida, which is one of the country’s most populous states. While other companies were stocking shelves making sure that Captain Crunch was twenty boxes deep, Publix set up complex systems revolving around data synchronization, developing a robust supplier portal, and keeping track of manufacturer performance. This was back in 2006.
Publix had already built systems internally through a supplier portal where manufacturers could view demand forecasts for specific items. This helped foresee trends, as well as know how long things took to get the warehouse.
They graded and ranked suppliers across 19 different dimensions—including order and delivery accuracy and damage and returns—so they could see how efficiently their stores and the suppliers worked together.
The Lakeland-based chain shifted hours to 8 a.m. with an 8 p.m. with exclusive shopping experiences for seniors an hour prior. Because they had built out systems years ago, the chain was able to see flare-ups in demand and anticipate break downs, as well as what consumers wanted based on trends and analysis. Investing in the digital space helped Publix serve its communities by anticipating and utilizing their supply efficiently.
Planning ahead paid off
These two companies saw the future. They saw how their supply chain needs to be managed, how to think ahead, and how to implement before a situation gets out of hand; two of the country’s biggest states are experiencing fewer problems than they would otherwise as a result. This should be an essential lesson for future planning, and showcases how managing top-down with a holistic point of view that’s capable and malleable can be done effectively.
The coronavirus situation is complicated. This moment in time will be studied for decades to come. There is no blueprint for how we’ve handled the coronavirus situation across the board. One of the biggest takeaways is that H-E-B and Publix were ahead of the curve and that investing in their supply chain changed everything for millions of people.
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