Supply Chain’s emerging challenge just became a lot more challenging for the Furniture & Furnishing sector.
Much has been talked and written about the various changes in the supply chain management company in this #newnormal. However, after almost a year of living in these uncertain times, we see some areas where drifts have taken place, that are here to stay.
To explain precisely, the key logistic challenges that spurred the search for #innovative solutions:
Capacities: Capacities evaporated in thin air. Post #pandemic the supply of goods and services mainly from South Asian regions curtailed and that rippled across the globe. Ocean carriers had no choice but to remove shipping capacities off their ports to even less than half. Same holds true for Air Cargo as many airports across the world are still not fully operational. Ocean freight cargo was replaced by air cargo and thus shooting the cost of products with no looking back. The current situation being; freight charges are “day driven” rather than contactual commitments, containers are available on first come first serve basis.
Fluctuating Demands: The housing sector for small and medium sized real estate is booming in larger markets like the US and some parts of Europe. Product categories like Furniture & Furnishing are seeing an upsurge in demand. More and more people are taking home decoration seriously, specially due to their #WFH schedules. This pushed the the demand for fabrics, yarns, fibres, wood, metals and other raw materials. If we talk about our business and product line, business is taking an upward curve and it's getting rather difficult for mills across the globe to meet the demand.
Geographical Shift: The current trade war like situation with China is not helping either. China being one of the largest producer and at the same time a consumer of lot of raw materials like cottons, polyester, accessory items, furniture etc and is controlling the prices as they deem fit. On top of this, various global issues like “forced labour” in various cotton producing regions of China are not helping the cause either. “China+1” strategy to spread #supplychain risk is also potentially expensive.
Inventory Management: From goods delayed to goods unwanted, the pandemic has created inventory chaos. Improving visibility tools and using advanced data analytics for better modelling and moving stock closer to key markets are some immediate solutions larger retailers and brands are looking at. Further automation and #digitisation of the inventory flow systems has become absolutely integral part of the whole supply chain.
Labour Shift: With various lockdowns and sudden rise in #Covid cases across Asian countries, the factories to the world are strolling to hold back their labour in the mills. The daily wages and labour charges have sky rocketed. Skilled labour is either preferring to stay back home to their families or are available at 3-4 times more than their remuneration. This has bamboozled the economies of scale factor that larger mills operate on. This #migration specially in #India, Bangladesh is currently going on and it's almost impossible to forecast when this spread of Covid will halt.
After being an active member of the supply chain company for over 4 decades, our experience suggests #optimising resources in hand and designing bespoke solutions for challenges as they emerge each day. Maybe it's time to be extempore and make effective decisions rather than make long term strategies when thing are uncertain. Bottom line is, Covid or No Covid, as a supplier or as a sourcing partner you cannot take your eyes off from 2 core elements of supply chain; Speed & Time to Market. Period!