The COVID-19 outbreak caught everyone by
surprise. There were so many unknowns at the beginning of the outbreak, which
caused many producers to reevaluate their inventories and production plans. The
full impact of the pandemic on the supply chain is still not fully known. The
confectionery industry has felt the ramifications of COVID-19 from raw
materials to finished products. The lack of a steady and healthy workforce has
also contributed to the already challenging circumstances. RCI member Christopher
Romocean, with Linnea’s Candy Supplies, shares seven ways businesses can avoid
or at least help mitigate the effects of supply shortages.
1. Plan further ahead than you usually would. Just-in-time purchasing may have worked well in the past, however,
building a higher-than-normal inventory of supplies and thinking further into
the future when ordering will help provide a buffer when supplies are limited
or nonexistent.
2. Build long-term relationships with your suppliers. Building trust and communicating with your suppliers will get you
the best and most current information about supply issues, lead times and
advice about how to best deal with your situation.
3. Provide forecasts to your suppliers. If your suppliers know what you will need, especially if your needs
have changed, the chances of getting products when you need them increases
dramatically. Uncertain demand from your customers will make this process
difficult, but your best estimate is better than no estimate at all.
4. Use technology. If
you are able to look at historical data and add in any projections for new
business, you will have a fairly accurate idea of what to stock, as well as,
what to provide as a forecast to your suppliers. Your suppliers may also be
able to help you by providing reports of your past purchasing history.
5. Place orders in advance with future ship dates. If you are able to predict what you are going to need in the
future, place orders with future ship dates. While this is not a guarantee the
product will be available, by ordering with an extended lead time your window
for availability is much wider and your chances of getting what you want will
increase.
6. Be flexible, if possible. Due to a number of unforeseen circumstances, it is possible that
your usual products and supplies may not available for a prolonged period of
time. If all the planning and forecasting is not enough to bridge the gap, be
prepared to have the flexibility to substitute with similar products that are
available. This is not an ideal solution for many confectioners who have been
using the same products to produce their confections for many years, but one of
necessity to keep their business open during these unprecedented times.
7. Check with suppliers before committing to new projects. Check with your suppliers about availability before taking on a new
or large project. If supply issues can be identified before a commitment is
made for a project, alternatives may be offered by your supplier to help find a
suitable replacement and keep the project moving forward.
While there is no “one-size-fits-all”
approach; using any purchasing strategies available to get your business
through these difficult periods will help. With so many unknowns in our
industry involving long lead times, shortages or challenges predicting demand,
communication and planning will be the two most important things you can focus
on to increase your chances of getting what you need, when you need it.
Being a member of RCI is also a great resource
when a crisis arises. RCI members are more than willing to share information
and insight on how to navigate through difficult circumstances. The wealth of
knowledge and experience of RCI members that can be tapped into is priceless
whether it is in person, through a live virtual event or through RCI’s online
forum, The Candy Dish,
where members can pose a question online and receive feedback from fellow
members.
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