TRL3707
ASSIGNMENT 1
SEMESTER 2
2023
, Introduction:
The Covid-19 pandemic brought significant disruptions to supply chains worldwide, leading
to a renewed focus on the importance of inventory management, customer service
strategies, and forecasting in grocery retail shops. The case study of Bidvest International
Logistics (BIL) demonstrates how technology and digitization can enhance supply chain
efficiency and transparency, providing valuable insights for grocery retailers. This assignment
explores the role of inventory management in planning and mitigating uncertainties, the
customer service level strategy for grocery retail shops, the risk of holding inventory, and the
significance of forecasting in achieving timely results within the context of the case study and
the prescribed textbook "Supply Chain Logistics Management" by Bowersox, D.J., Closs, D.J.,
Cooper, M.B. & Bowersox, J.C. 2020.
1.1 Advise grocery retail shops on the role of inventory management in planning and mitigating
uncertainties. Give examples from the case study. 4 marks for theory, 4 marks for application
Inventory management plays a crucial role in ensuring smooth operations and mitigating
uncertainties in grocery retail shops. Proper inventory management involves maintaining
adequate stock levels, optimizing reorder points, and managing inventory turnover. Here's
how it can be applied based on the case study:
1.Safety Stock and Managing Demand Fluctuations:
Inventory management involves striking a balance between having enough stock to meet
customer demand and avoiding excessive inventory that incurs holding costs. During the
Covid-19 pandemic, grocery retailers faced unprecedented fluctuations in demand as
consumer behaviour shifted rapidly. Panic buying and stockpiling of essential goods created
demand surges, leading to shortages in some stores. On the other hand, demand for non-
essential items declined due to lockdowns and economic uncertainty.
By implementing safety stock strategies, grocery retail shops can be better prepared to
handle sudden spikes in demand. For example, Bidvest International Logistics (BIL) observed
that some clients increased stock levels in preparation for future supply constraints during
the pandemic. This exemplifies how safety stock practices can help retailers buffer against
uncertainties and maintain an adequate supply of essential goods to meet consumer needs
(Bowersox et al., 2020).
2.Supply Chain Disruptions and Responsiveness:
The Covid-19 pandemic exposed vulnerabilities in global supply chains, disrupting
manufacturing, transportation, and distribution networks. Grocery retailers faced challenges
in sourcing products from traditional suppliers, resulting in delays and stock outs. To mitigate
these disruptions, retailers need to be agile and responsive in managing their inventory.
Real-time supply chain visibility is essential for identifying disruptions and responding
promptly. Bidvest International Logistics (BIL) embraced digitization and technologies like
data analytics and automation to enhance supply chain visibility. By leveraging these tools,
