Inventory Shortages - Bridge the Gap?

Inventory Shortages - Bridge the Gap?

In our March 2020 Blog, prior to the Coronavirus shutdown we discussed Supply Chain Impact. Covd-19 has impacted all of us in one way or the other. At that time, we forecasted that it was increasingly likely those of us in the Prize, Incentive, and Award marketplace, or other businesses reliant on consumer products manufactured in China, would suffer interruptions, and sustain a negative impact to the product supply chain.

In hindsight, some have asked how did we know? The short answer is history tends to repeat itself. We’ve seen geo-political events, natural disasters, raw material shortages, labor challenges, and logistical problems before. However the pandemic wasn’t just a single disruption. It was a global, widespread, upheaval, where every single component of the supply chain was impacted, including manufacturers, suppliers, distributors, and service providers. The data foretold the current situation.

As we suggested in that March 2020 Blog, we planned for the worst, while hoping for the best, and in our business that meant we went very deep on inventory in anticipation of supply shortages, being amplified once demand resumed. We are fortunate to be in a very healthy position as it relates to inventory, and our incredible hard working team who have gone above and beyond to maintain a diverse assortment of products.

Back then, we also recommended that you check in with your vendors and supply chain partners to assess their inventory situation. Some were sure to be impacted more than others, and that appears to be an issue now for many buyers. You should feel comfortable reaching out to your vendor's to gather information so you can make informed decisions. Valued partners are important and integral to success, but ultimately you and your team responsible for taking care of your business.

If you polled most supply chain experts today, the overwhelming piece of advice to buyers right now, and to mitigate future challenges, is to Explore Options for Multi-Sourcing.Currently, only 31% of companies have developed alternate sources of supply for 70% or more of their tier 1 suppliers, according to data from APQC (American Productivity and Quality Center). COVID-19 has cast a glaring spotlight on risk management around sourcing, and as a result companies are becoming more sensitive to being single-sourced, or heavily reliant on limited vendors.

As discussed in the March 2020 Blog, the advice is still the same. Should you find yourself in a position of uncertainty, now is as good a time as ever to expand your sourcing and purchasing network. Having more options available should prove to be a valuable proactive measure as manufacturing and shipping issues continue. Our data projects this problem continuing well into 2022, post the traditional Chinese New Year interruption.

Examining your product mix now is an action you can easily implement. Evaluate your product use, and introduce new skus, while testing some different categories which can fill shortages or holes in your assortment plan. Do not be afraid to source new suppliers and initiate some new partnerships. You might be pleasantly surprised…...relationships are the core of a great partnership, and beneficial to the long term health of most organizations.

We’ve maintained consistent monthly inventory levels of $30m valued at MSRP, and gone deep on many key categories for our existing customers and partners. Feel free to contact us for more information, as we can help bridge any gaps between your existing suppliers and your product needs. As a final note, please plan ahead for your year end, and new year events, because as we’ve forecasted, these challenges will more than likely still exist in Q4 & Q1.