Keynote Coverage: How the Pandemic Impacted Demand at FedEx, Clorox and C&S Wholesale
By Matt Leonard, Supply Chain Dive
Clorox's Rick McDonald decided to ramp up the company's supply chain, as soon as he started hearing the news reports of COVID-19 in Asia.
"We started hiring people. We added shifts. We took our finished days of inventory targets up," McDonald, senior vice president and chief product supply officer, said during an online session of the ProMat conference Tuesday. "We brought on incremental contract manufacturers for Clorox disinfecting wipes to try and build more inventory."
Clorox's leadership was already talking about a potential impact from coronavirus on its February 2020 earnings call.
"We are taking up inventory levels to be prepared for the potential increase in demand for some of our bleach products," Clorox CFO Kevin Jacobsen said last year.
But this bolstered inventory didn't last long, McDonald said this week.
"Over about a two-week period, all that inventory was consumed," he said of the stock up.
Clorox was one of many companies across industries that began to shift operations in early 2020, as signs pointed to changes in demand and consumer habits.
The first signal the disease was going to have a significant impact on the grocery supply chain was when California announced its stay-at-home order, which was followed by a similar measure in New York last year, said Carmela Hinderaker, the senior director of business continuity and customer support at C&S Wholesale Grocers, speaking on the same panel.
"That was the red light that we went up to the executives and said, 'This is going to be unprecedented,'" Hinderaker said.
C&S Wholesale Grocers dealt with demand doubling for four weeks straight, after restaurants and other businesses had to close their doors, she said.
"That is not something that you can just easily meet," she said. "100% more volume that you're seeing outbound is the same amount that you need to put back into the warehouse," she explained. "So, you need 100% [more] coming back in at the same time ... [and] there is lead time."
The wholesaler worked with vendors to ensure it was getting as much inventory as it could that was spread out across the country. But finding transportation was a struggle.
"We had to find drivers," Hinderaker said. "But we were starting to see that drivers within our network were also getting pulled from other industries. And so the government was pulling them, food banks were pulling them, and then also our own vendors are pulling them."
C&S also had to think about labor, as its workers contended with increased demand and safety concerns related to the virus.
Worker safety concerns led to increased need for transporting personal protective equipment at FedEx and other transportation providers, David Lusk, the director of the FedEx Global Security Operations Center for FedEx Services, said during the Tuesday event.
"We had this snap demand from virtually every state in the country, and many cities, to charter an entire aircraft of volume," Lusk said.
FedEx was able to meet this demand, he said. But as the demand started to fade, a different wave began to swell: e-commerce. FedEx had built its network to handle what it forecast demand to be for 2025. The e-commerce demand set on by the pandemic filled that capacity "two to three years earlier" than expected.
FedEx executives spoke last month about adding capacity back to its Express network that it had planned to keep parked.
Looking back on the year, one of the biggest surprises for Hinderaker wasn't that the wholesaler had issues in the early days of the pandemic, but how many workers still showed up to ensure supply chains kept running.
"If you guys remember, almost a year ago, the fear was pretty palpable," she said. "But they still went out there and they still delivered groceries."
Thank you to Matt Leonard at Supply Chain Dive for providing coverage of this keynote. The full video is available at promatshow.com.