Does your company supply or ship items to clients? If so, proper packaging is essential to ensure that ordered goods can reach your clients in excellent condition. Or else, you’ll risk losing clients due to poor quality services.
Most companies order shipping and packaging supplies in bulk because they save time and money. It helps streamline business operations, saving you the hassle of making weekly or monthly purchases. Since you won’t have to pause production to wait for packaging materials, your business can continue operating normally.
We are fast approaching the Holiday season. Retailers would normally already have their goods on hand in Distribution Centres, Stores, and any other channels they may use.
But this year is different. The fallout from the global pandemic persists and shipping delays are rampant. Retailers should have had their goods by now yet for some their inventory hasn’t even left the country of manufacture. Even Christmas trees will be in short supply.
Panic should be setting in now if it hasn’t already. What are the options for Retailers to circumvent these logistics delays and get their inventory on hand in time for Holiday sales?
The State of Things
As reported by CNN on October 19, 2021, there are over 200,000 shipping containers waiting off the coast of Los Angeles, representing a backlog of over 2 weeks worth of work. That is notwithstanding the trail of additional ships and containers that are still on their way to Los Angeles.
Extending work hours at the port to a 24 hour schedule is alleviating some of the backlog but increased demand for products means that port workload will be heavy for some time to come. These backlogs and delays are not unique to Los Angeles as other ports in the US, Europe and Asia are experience similar problems.
The Financial Times states that as of October 15, 2021 there are 584 container ships stuck outside ports worldwide, double that of the same time last year.
These delays invariably lead to dramatic increases in shipping costs, which inevitably are going to work their way through to price increases for end consumers.
Even when those containers are unloaded another problem awaits. Getting enough trucks, and truck drivers, delays the pick up of these goods for delivery to parts unknown. The American Trucking Association has stated that there is a shortage of 80,000 truck drivers. The Coronavirus has dramatically worsened what was already a bad situation in terms of the shortage of drivers.
Any way you look at it Retailers are going to have a hard time getting all of the inventory they need to satisfy the surging demand, which will only be compounded when considering even greater demand driven by the Holiday season.
And in many respects this demand is perishable. Consumers will either go to other retailers who do have the inventory, or they won’t buy at all.
What are the drastic steps that Retailers can take NOW, to get as much inventory as possible into their channels?
Act Like It’s An Emergency, Because It Is!
In Retail the enormous wave of activity hits Supply Chain well before the Holiday season, as the massive influx of inventory hits the logistics channels and distribution centres. Normally by late October all of these goods would be on hand, in inventory, and positioned for the pending sales season.
Because so many Retailers are still waiting for goods that are stuck either on the ocean, in ports, or on the road, they must take DRASTIC steps now in order to mitigate any delays.
Here are our recommendations on steps that must be taken right now:
1. Put Your Team on High Alert
Create a SWAT team and a war room, with daily, if not hourly, governance and oversight. This is not a drill. Hire in extra outside consultants or resources as needed. There are lot of professional organizations offering Supply Chain as a Service (SCaaS). You need people working on this stuff 24 hours a day for the foreseeable future. If you don’t add extra resources now you will regret it later.
2. Spend MORE on Logistics
Plan to spend a lot more money on logistics, at least in the short term. Shipping costs are going up. PERIOD. Beyond that you should prepare your organization to spend even more. Remember, if you can’t get the goods into your customers hands, that demand is likely perishable. So you must spend more to get those goods into position so that you can fulfill as much of that demand as possible.
3. Proactively Manage Everything, Buy Whatever You Can, and Take Control
Proactively manage all aspects of your logistics network. Do not just leave this up to your carriers. These carriers are serving a lot of different customers, all of whom are also commanding attention and demanding expediting, and you are just one. You must make the decisions.
Buy any and all available inventory at your local Distributors and Wholesalers. Even if this means you need to take last minute actions to update your merchandising plan and online promotions, having any inventory is much better than having no inventory at all.
4. Implement All Alternatives for Moving and Storing Your Goods
Consider all alternatives for moving your goods:
Route the ships with your goods to less congested ports. Ensure these ports are working 24-7.
Hire truck drivers, and trucks, on contract to pick up and transport your goods. Consider paying for team drivers so that your trucks never stop running.
Charter airplanes and air freight your goods to their destinations.
Hire extra carriers and rent (or buy) containers wherever possible.
Establish local, mini “Pop-Up” distribution centres and storage facilities close to either the ports or your points of highest customer demand, to minimize the movement of goods. This should be done irrespective of where your current facilities are.
Implement drop shipping and avoid sending your goods to centralized distribution centres. Drop ship your goods directly to stores, consumers and other distribution points and avoid excessive handling. Even if this means stores will have crowded backrooms, or trucks in their parking lot, that is a lot better than having inventory stuck in a distribution centre, at a port or on the road.
Embrace a Touchless, or “Don’t Touch” paradigm in materials handling and storage. Forget your current processes and procedures. Moving materials multiple times and moving those goods on and off storage shelves is wasted activity. Especially when you are pressed for time you should eliminate all unnecessary handling and storage activities. The drop shipping model is an example of this new paradigm.
Buy as much inventory as you can now, far in advance of demand, and beyond normal order and delivery lead times. While this may be too late for this coming Holiday season, strong demand will continue for the foreseeable future. At a minimum buy the strategic elements of your inventory now.
Extend your delivery lead time parameters, as well as your order lead time parameters. Leave these exaggerated times in place until we are well past the point at which logistics delays are problematic.
Logistics Delays in Conclusion
Don’t just sit back and wait for your goods to arrive. This is not the time to be passive, complacent and indifferent.
Everyone is scrambling to get their goods all at the same time. That means that common resources (eg. ships, ports, trucks, truck drivers, distribution centres) are bottlenecks. Demand for these resources is far greater than the available capacity hence these logistics delays.
The result is that the people who are more aggressive, more creative and innovative, more determined, more organized, and yes more willing to spend money, will be more likely to get their goods earlier than you and everyone else.
Retailers are staring at the stroke of midnight with respect to getting their goods in place on time for the Holiday season. Take all measures, no matter how extraordinary, to bypass these logistics delays and get your inventory in your channels. Your share of your customer’s wallets, and your business survival, depend on it.
In the construction industry, only 30% of projects are completed on schedule and within budget. As well as common problems such as labor shortages, bad weather, construction vehicles or last minute changes to plans, the majority of contractors cite poor site coordination as a major cause of delay.
Workers waste time waiting for materials or appropriate equipment, performing repetitive tasks and unloading late deliveries instead of focusing on using their skills to move the project along.
Through vehicle automation, digital collaborative network technology and more sustainable delivery processes, the transportation and management of construction equipment and materials both on site and on the road can be made more efficient.
Are you looking to benefit from a trucking company to transport your products? If so, you want to make sure that you get the most out of transport services.
Here are some handy tips that your business can use when working with trucking companies.
Have you heard stories of engagement rings going wrong before? Yes, an engagement ring can get damaged and, if you are not careful, you may not realize it until it’s the big day. Most of the damages reported have occurred during shipping as most people order engagement rings online.
You can avoid ending up with a damaged ring using various tips. This article will discuss the best ways to ship your engagement ring without damaging it. You can use the insights shared above to avoid a nasty surprise when unpacking your engagement ring after it’s delivered.
A company’s distribution and warehousing operations consist of multiple functions and distribution challenges. It is not just about having workers picking items off shelves, packaging the products, and placing them on delivery trucks.
It also involves tracking shipments before they reach the warehouse or distribution center, handling customers, placing inventory in the right locations, managing inventory levels, forecasting customer demand, accepting returns, and more.
Trying to manage all of these processes daily creates a range of obstacles that could delay or disrupt the supply chain.
Here are common supply chain challenges and the modern technology that can offer cost-effective solutions.
For businesses with inventory to oversee, efficient warehouse and vehicle fleet management is crucial. By streamlining operations and implementing best practices, businesses can save time and money while ensuring that their products are properly taken care of.
We recently interviewed Mike Mortson, founder of Supply Chain Game Changer, about the trends he sees in shipping and the freight industry. He says digitizing supply chains is a significant trend.
Mike is an industrial engineer with an extensive background in all facets of leadership, from supply chain management, procurement, manufacturing, ops, and I.T., to global operations, distribution, logistics, reverse logistics, and commodity management.
Mike has helped several companies evaluate and overall their supply chains. His experiences led him to begin Supply Chain Game Changer, a website and blog aimed at sharing experiences and expertise and curating content and resources to help everyone from industry experts to supply chain professionals globally.
Expanding your Supply Chain into international territories comes with complex challenges that many businesses are not prepared for. With shipping fees, language barriers, and tariffs, managing the logistics of global supply chains can be an overwhelming endeavor.
These challenges come with risks to your business that can end in lost revenue, unnecessary expenses, and wasted resources if not handled properly.
One of the most prominent challenges of opening up international supply chains is the risk involved with foreign entities. Business relationships with international companies can be influenced by changing geopolitical situations that create unexpected tariffs or barriers. As the Russian invasion of Ukraine has shown, geopolitical tensions can rapidly shift and severely impede international supply chains.
Stay up to date on geopolitical news, especially with all countries that impact your supply chain, and be aware of any potential political matters that may put your business at risk. This can include building tensions between nations, wars, or closed borders, as well as broader events like natural disasters, climate emergencies, or changes in political leadership.
Consider investing in insurance policies that cover these types of global risks, and diversify your business to other suppliers and partners to avoid a total standstill in the case of an unforeseeable event. Many companies are also turning to AI to help them monitor geopolitical risks.
Machine learning and advanced algorithms reduce the need for regional experts, and instead, collect data from a multitude of sources in order to produce warnings about potential risks. For example, AI company Predata uses machine learning to analyze online behavior, such as what people are searching or viewing in over 180 countries. As the name suggests, this data can help anticipate unrest, helping CEOs and supply chain managers make smart decisions.
2. International Standards
Quality and safety compliance standards vary from country to country, leading to discrepancies in a business’s product when the supply chain spans a multitude of nationals. Clearly communicate with your international partners your expectancy for quality standards and an acceptable level of defects in your products.
It may be helpful to establish third-party certifications that ensure quality and safety is consistent at every level of the international network. Many companies may also make use of third-party audits and inspections or regional experts in order to ensure their products meet the regulations of their destination market.
These quality standards extend to ethical labor and environmental standards as well, where companies should be aware of the ethical practices and social equity of their international suppliers. Manufacturing and production labor in developing nations are significantly less expensive than in most developed nations, but these often lack safety and environmental precautions.
As such, this comes with a major risk for companies and workers. The 2012 Dhaka Factory Fire was a result of poor working conditions and a severe lack of safety standards that resulted in the fatalities of over 100 workers. This type of accident is not only tragic, but can also greatly harm a company’s reputation.
When expanding to international suppliers, invest in good quality partners that practice safe and equitable treatment of their workers, as well as environmentally sound practices. Not only will this reduce vulnerability in your supply chain, but may boost revenue as well.
A growing number of buyers are switching to fair trade buying habits and are looking for companies that can boast ethical treatment of their workers and responsible environmental impacts. Take advantage of quality control audits and certifications that keep you and your international partners up to date on changing standards, and be open and honest with customers on your business’s ethical practices.
3. Delivery Times
The rise in major e-commerce marketplaces has created an expectation among buyers that delivery times should be fast and cheap. Known as the Amazon Effect, many potential customers are dissuaded by smaller online companies that can’t provide delivery times similar to those of Amazon’s famous same-day delivery.
While this mindset is harmful to small businesses on every level, it can be especially detrimental to businesses expanding to other countries. Shipping products internationally can exponentially raise shipping costs, and delivery times may be increased to weeks or months.
Avoiding the effects of longer delivery times takes careful planning. Air freight shipping is significantly more expensive than oceanic freight, but it takes far less time. As such, oceanic freight should be used for the majority of shipping, whereas airfreight is used only for the occasional surge in demand or special orders.
Once your business has established a strong market in specific regions, it may be worth the investment of installing warehouses and manufacturers within those regions to generate greater access and avoid international shipping costs altogether.
4. Foreign Fees
Business operations with foreign entities always comes with the extra costs of foreign fees. These can include changing standards of international transactions, conversion rates, and tariffs. In a global supply chain where many goods are traded in bulk, small exchange rates can rapidly accumulate into major costs.
Partner with a bank that offers low international exchange fees, and be consistently aware of fluctuations in domestic and foreign currencies. You can also take advantage of these fluctuations by carrying out transactions when the USD is strong or while other currencies are weak.
Try to carry out transactions in bulk as much as practicable and consider focusing your market in regions like Jamaica that have more manageable exchange rates. Using Remitfinder, you can compare these rates and choose a platform that offers the best exchange rate for US Dollars to Jamaican Dollar.
Expanding your supply chain to new countries can be a daunting and risky undertaking, but managing the process with careful insight and thorough preparation can ensure minimized risk and unseen costs in all your business relations.
Expanding your Supply Chain article and permission to publish here provided by David Evans. Originally written for Supply Chain Game Changer and published on August 4, 2022.
Transportation can result in higher company expenses if you don’t track them well. The increasing cost of fuel, car maintenance and purchasing of vehicles can drain a company’s resources.
The digital tachograph download (DTD) helps record driver and vehicle information, including travel distance, speed, driving time and activity. As such, it allows you to be compliant with relevant regulations and ensure that drivers are not doing more than their legally-mandated hours behind the wheel.
E-commerce has changed the game of how parcels are transported and delivered to customers with the expectations of same day vs next day delivery.
With the help of advanced technology, the days have become shorter. We no longer have to wait for the sun to rise and set a few times before we receive that box of meat pie that’s probably not safe to eat anymore.
What once felt as if a pack mule was used to deliver a package, now seems like a teleportation device is involved in the delivery.
E-Commerce is the fastest growing avenue for doing business anywhere. It has been for many years and it will be for many years to come. In support of this your operations need to be World Class.
It is certainly a challenge to establish the sales, marketing, merchandising and transactional infrastructure to offer an efficient and effective E-Commerce solution to your customers.
At the core of the Supply Chain an enormous challenge is to have a highly competitive and compelling E-Commerce Fulfillment solution. So what are the key principles that you must have in place to design, construct and deliver a leading E-Commerce Fulfillment solution?
The process of completing clothes orders is known as apparel fulfillment. The process begins with the creation of the product by the designer or garment manufacturer. The delivery of clothing purchased by clients is the result of apparel fulfillment.
When a consumer placed an order and pays for it, the business is responsible for completing the order. This is where logistics play a role. Fulfillment is the process of transferring items from a supplier to a warehouse and then to a customer’s address.
Multiple stakeholders, such as designers, merchants, manufacturers, and distributors, must work together to fulfil an order. The product that will be sold to the buyer is usually provided by a vendor.
Any successful business will take measures to forecast supply and demand for their products and services. There are many software programs out there that can assist companies of every size in knowing what to expect. According to Simplex Group, this helps companies plan for warehousing space, advertising, and staffing.
Freight forecasting is a method of predicting what the freight market will do in the days, months, and years to come. Freight Demand modeling is an offshoot of freight forecasting that determines how much need there will be for certain modes of transportation and the amount of room needed on those modes of transportation.
It will also determine the need for certain lanes. If you want to understand the significance of freight demand modeling, you should understand a bit about the job of a freight forecaster.
Both Logistics and the wider Supply Chain are vital to how companies run today, but the two are still so often confused. We put together an Infographic outlining some of the key differences and points of overlap between them.
While it may be an obvious distinction to many pros across the field, there’s still a lot of ambiguity – sometimes within companies, as well – about what constitutes Logistic Management, and what constitutes Supply Chain Management. As a recruitment firm with over a decade of experience specialized in this area, we figure we’d weigh in!
EBOOK HERE
