The Impact of COVID-19 on Inventory Management: Challenges and Solutions Chevin Fleet The coronavirus pandemic exposed multiple faults in supply chains across the world. Lockdown measures resulted in constrained supply and volatile demand, causing inventory issues across industries. Inventory management challenges range from unexpected customer behavior and unreliable suppliers to rising logistical costs. Many experts predict that these issues will not be disappearing soon, so long as markets are still facing the impacts of the pandemic. Businesses have to modernize their supply chains quickly to continue servicing their customers. Emerging Supply Constraints Many supply chains span countries, exposing them to even more problems. One example is Hyundai. The South Korean brand sources its key components from China, which could not continue providing Hyundai’s needs due to coronavirus-related measures. Thousands of manufacturing factories shut down during the height of the pandemic. Although most of them are gradually resuming normal operations, the temporary shutdown still caused a ripple effect on production and inventory. Another challenge caused by COVID-19 is the explosive surge in demand for certain products. Household cleaning supplies, for instance, saw a 34 percent increase in sales in February 2020. Hand sanitizer products recorded the highest gain in the same period at 838 percent. Inventory Management Optimization The surges in demand and deficiencies in supply forced organizations to optimize their inventory management strategies. One of the things that most companies did when the pandemic first struck was to shift to weekly- based inventory planning. Instead of looking at their sales history on a monthly basis, businesses started using weekly sales cycles to understand the reason behind supply-and-demand trends. Once they identified the cause of the demand surge, they were able to restructure their supply chain to accommodate the uptick. Many organizations have also invested in warehouse and inventory management software. This technology allows them to automate calculations, assess the impact of demand signals, and gain visibility into consumption across distribution channels, among other capabilities. These programs allow businesses to produce more accurate forecasting reports, helping them meet consumer demand. Sources: https://www.chevinfleet.com/gb/solutions/fleet-inventory-management-software/ https://www.mmh.com/article/time_to_tighten_up_on_inventory_management https://www.supplychaindive.com/news/coronavirus-cleaning-disinfectant-supply-chain- procurement-manufacturing/583831/ https://www.blumshapiro.com/insights/the-impact-of-covid-19-on-inventory-management/ https://www.prnewswire.com/news-releases/household-spending-on-cleaning-supplies-and- wellness-products-increased-34-since-late-february-with-hand-sanitizer-leading-the-pack-with- an-838-increase-301131183.html