The recent heavy snowfalls across the country have hit logistics operations hard. Large sections of our transport network were closed off, leaving hauliers and couriers stranded, unable to make deliveries. This resulted in huge backlogs of orders, with some large companies such as Royal Mail and Amazon being forced to cancel their next day delivery service. Since then, drivers have been working longer hours in an attempt to clear the backlog which, in some cases, has taken almost till the end of January to complete. With the effects of such extreme weather being so financially debilitating to these companies and their supply chains, the question must be asked: why are there so few measures in place to cope with such an eventuality?
The answer is not particularly clear. Transport issues due to the snow are believed to have cost businesses an estimated £400m a day. On this basis, you would think that it would be in their interest to ensure supply chains can continue to function effectively, and that deliveries can still be made even in poor weather conditions. But this is simply not the case. Of course it is not just the delivery from retailer to customer that is pushed back and affected. The most telling impact of the weather on the supply chain is arguably the disruption of transportation of goods between manufacturers, ports, distribution centres and retailers. At peak, this flow of goods is lower than customer demand and the inventories of the retailers diminish quickly, leading to stock-outs. This in turn leads to loss of sales, damaged brand reputation and subsequent financial loss. The problem of extreme weather is therefore of high importance and strategies to identify and mitigate the supply risks mentioned above should be devised.
So, from a logistical point of view, what can be done to lessen the impact of the snow? The most vulnerable component of the supply chain must be the operation of vehicles on snowy and icy roads. If they are unable to travel safety either from manufacturer to retailer, or from retailer to the customer, than the supply chain is going to be compromised and deliveries pushed back. Therefore in order to maximise the mobility and dependability of these vehicles in winter conditions, special winter tyres could be applied temporarily, a tactic which Ocado reported to have been very effective. This would improve traction and allow continued operation in areas where roads may not have been passable before. These are already compulsory measures for commercial vehicles in some countries on the same latitude as the UK, for example Canada.
Communication should also be established with the councils that are responsible for gritting roads. This would enable logistics managers to monitor delivery routes and plan alternative contingencies if required. Training staff in advance is therefore also important, so that they know exactly what to do in the event of snow and are able to successfully implement these plans. Another more radical option that may be a possibility in the future would be to move processing plants and distribution centres closer to the end customer. Though this is obviously not always possible, and would only become cost-effective if this extreme weather started to engulf us more often, it would nevertheless shorten the supply chain and reduce many of the logistical risks associated with transportation and delivery.
Further options include an improvement in online communication. A well developed system that advises customers of current stock levels and creates a channel for honest, open feedback, would make the supply chain more transparent and potentially improve customer satisfaction during these cold snaps. Integrating transportation along the supply chains is yet another option for some companies, helping to combine vehicle loads with other manufacturers and therefore spreading the risk over more, smaller deliveries. This would leave transportation less vulnerable to the weather.
Considering the impact the recent snow has had on the logistical efficiency of some major companies, and the subsequent financial losses they have been hit with, it must be worth considering these potential improvements to ensure that supply chains remain effective during periods of such extreme weather. Keeping them unfrozen is essential.