In the midst of the COVID-19 global crisis, many businesses have had their supply chain resilience put to the test. As the pandemic has spread and hit globalized businesses everywhere, supply chain risks have intensified, and those without management systems in place are facing dire consequences.
LPR - La Palette Rouge, a pallet pooling company specializing in manufacturing and retail chains in the consumer goods sector, is one of many such impacted businesses in Europe. LPR operates in multiple European countries, including France, Spain, Portugal, Italy and the U.K., managing more than 83 million pallet movements per year throughout Europe. LPR’s customer portfolio includes leading brands in the fast-moving consumer goods sector, including those in beverages, fruit and vegetables, and hygiene. With its reusable pallet system, customers can reduce their environmental impact and, so, contribute to a circular economy through the supply chain. LPR’s raw material is wood, and so one of the company’s primary goals is to rebalance its carbon footprint through reforestation projects in France and other locations. By 2025, LPR also hopes to reduce its carbon footprint by optimizing transport, ensuring there are no empty returns and considering hybrid or electric vehicle options. For five consecutive years, LPR received a Gold EcoVadis rating for its commitments to reducing the environmental impact of the entire supply chain, recently progressing to Platinum rating, which is the highest possible recognition.
The Impact of COVID-19 on Business
But how has the company fared in the midst of the new COVID-19 crisis? Recently, we interviewed LPR to learn more about the impact that the pandemic has had on the business as well as the company’s plans for managing the sudden supply chain disruptions. When asked about the consequences of the pandemic on their business activity, representatives from LPR told us that they’d actually “seen high demand over the past two weeks - for both the delivery of pallets to customers’ production sites and for the collection of pallets from distributors after use.” They reported that “collected volumes were around 15 percent higher” than this time last year. However, they also noted that “customer volumes into the hospitality sector [have] ceased...an impact that should not be overlooked.” As for their employees, they expressed that they were “fortunate that all of [their] employees are able to work from home and are therefore able to continue...their day to day activities.”
Business Continuity in the Face of a Crisis
When asked about difficulties the company experienced with business continuity, they told us that “transport between countries is still authorized, which is absolutely essential” to LPR’s business, yet, “should transport stop for any reason, [they] would quickly run into problems” related to supplying their customers. So far, they say, “LPR has not encountered any legislative impact on… service centres or transport” but “some increased border crossing times [are] expected.”
Managing and Monitoring Changes
Having an Italian subsidiary that was hit hard by the pandemic, LPR was able to get ahead of the curve and “implement [its] crisis plan quickly and effectively.” Anticipating the requirement that employees would need to work from home, the company mobilized its IT team to ensure that all employees were connected to the necessary applications for continuing business: “We quickly created an internal crisis cell tasked with providing information to our employees, customers and suppliers, taking into account [all] applicable government orders. We have in-house tools that… centralized information and make it accessible to everyone.” To ensure that customers’ requirements are continuously met, LPR’s sales and operational teams stay in regular contact.
Future Plans
When asked about plans for the future, they expressed that, right now, forecasting and planning was difficult: Though they’re continuing to function now, LPR knows that they “are not immune to factory closures,” and they cannot gauge the psychological impact such events will have on employees, despite their best efforts to protect them with free counseling services.
They ended on an optimistic note, however, highlighting that “This crisis has been an opportunity to test the solidarity between supply-chain partners at all levels. Each party working within the supply chain is reliant on another, therefore working together collaboratively is key.” They added that, “Despite the constraints, our service providers have so far proven exemplary, allowing [them] to fulfill all orders despite unusually high business volumes.”
To learn more about how the impact from the COVID-19 crisis cascades globally across supply chains -- and challenges that business will face in return to normal, read our infographic on the Four Phases of COVID-19 Supply Chain Responses.
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