Overcoming Modern Fulfillment Challenges

Many companies have experienced a severe supply chain disruption in the US caused by the pandemic. These disruptions range from labor shortages, shortages of raw materials, to substantial cost increases in shipping and logistics. Every retailer and manufacturer have been impacted by this crisis in some way. While stores are re-opening, longer payment terms and financial uncertainty affect inventory and stocking options as the holidays draw near. Retailers are not the only ones feeling the effects of COVID-19; vendors and manufacturers are stretched for cash, making hard decisions and worried about what comes next. 

In June 2020, we talked to three thought leaders in ecommerce on our CEO live panel discussion series, “Overcoming Modern Fulfillment Challenges”. The speakers included Carl Hartmann, Co-founder of Lyre’s, John Merris, CEO of Solo Stove, and Ole Fjelberg, President & Partner of Onepiece. During the live panel, we discussed their challenges and obstacles around sourcing, manufacturing, shipping and fulfillment, and the effects of COVID-19 on backend operations.  

Supply chain roadblocks are coming from all over the world, with big impacts on second and third tier suppliers. The next pandemic “playbook” may involve increasing safety stock, alongside blended inventory management strategies that maintain fast access to core materials on a regional and product basis.  

“You need to really be on top of your supply chain vendors moving forward. All of the rules around availability and shipping have been re-written. That’s probably the biggest impact from our perspective. We are certainly looking to have multiple manufacturers, multiple points of production around the world while still having a consistent shape, which is a fairly big challenge in the beverage sector” says Carl Hartmann, Co-founder of Lyre’s when asked for his thoughts on inventory management moving from “just-in-time” to “just-in-case”, and how that would affect their business moving forward.  

General Motors is one company that has spent many years mapping their supply chains extensively. They have engaged with suppliers to understand their global sites, as well as knowing which parts originate and pass through each site. The company invested in this effort so that when a disruption happens, they would be able to understand within hours how their supply chain could be impacted in the days or weeks to come. Companies with resilient supply chains can quickly reconfigure when facing disruption.  

While COVID-19 has created numerous obstacles and challenges across various industries, it has also brought into broader focus the need to reduce dependency on a single supplier and/or a single geographic location. With the sudden shift to new ways of buying coupled with tight margins and lack of growth in physical locations, the need to participate in a broader fulfillment network has never been greater. These challenges will also prompt retailers to build new levels of preparedness and resilience, such as the adoption of new technology. The lessons learned here will leave retailers with better contingencies and operational flexibility in preparation for the next global disruption and the broader future.