How can retailers better manage supply chain turbulence? – RetailWire
June 15, 2021
Home Depot contracted its own container ship as a step towards managing the crisis in its supply chain.
âWe have a ship that will be uniquely ours and it’s just going to be going back and forth with 100 percent dedicated to Home Depot,â President and COO Ted Decker said. CNBC. Other measures taken by The Home Depot include air freight “of smaller, higher value items” such as power tools and buying items in the cash market, despite costs up to four times the price. higher than the contractual rates.
The National Retail Federation’s (NRF) monthly Global Port Tracker report released last week showed record imports arriving at ports across the country as vaccines allow consumers to return to normal shopping habits, but labor, equipment and shipping capacity shortages prevent retailers from capitalizing on this demand.
Jonathan Gold, NRF vice president for supply chain and customs policy, said in a declaration, âSupply chain disruptions, port congestion and rising shipping costs could continue to be challenges until the end of the year. “
Chewy said last week that high levels of out-of-stock reduced first-quarter sales by about $ 40 million.
âThis is clearly a supply-side situation, which we plan to mitigate in the second half of this year as additional production capacity comes online,â said Sumit Singh, CEO by Chewy quarterly call. âUntil then, we will continue to actively manage our inventory and use our recommendation engines to help customers find attractive alternatives. “
Costco May 27 quarterly call said the company was affected by shortages of containers and pallets. The time to move containers from the United States to China and back has been reduced from approximately 25 days to 50 days.
âThe best way we’ve dealt with supply chain delays is to adjust orders and pre-load, if you want, orders for many items,â said Richard Galanti, CFO of Costco. âAnd we think it’s pretty much under control. The feeling is that this will continue for most of this calendar year. “
A BBC The article cited a virus outbreak in China’s Guangdong province and the ripple effect of the Suez Canal blockade as recent factors potentially prompting retailers to order holiday items months ahead of traditional time.
DISCUSSION QUESTIONS: How long do you think the supply chain challenges will last and what impact do you think they will have on the holiday sales season? What mitigation measures or contingency plans would you advise retailers to take to reduce the impact of supply chain disruptions?
âFrom the merchant’s point of view, we need to get closer to the customer, more quickly to the market, and be more attentive to the environmental impacts of a purchase that is too far away. “