Over the past couple of years, UK businesses have been struck by an unprecedented range of supply chain challenges. They have been impacted by Covid-19, Brexit, container shortages, the Suez Canal blockage and now an ongoing lack of over-priced raw materials.
Because of these events, stock availability has been affected which is putting stress on operational teams and is leading to dissatisfied customers. As such, businesses across multiple sectors including those in electrical manufacturing, wholesale and distribution are having to adapt and find solutions for keeping up with demand and dealing with supply volatility.
Let’s take a look at nine effective ways electrical wholesalers can manage stock in times of shortage.
With every electrical wholesaler and distributor scrambling for stock right now, it’s more important than ever to build and nurture strong relationships with suppliers. Tensions may be running high, but it’s important to remain polite and professional.
Give your suppliers accurate data about your sales predictions and ask for sensible volumes of stock. With clear communication, suppliers should also be transparent with you about their current supply challenges and future risks.
Demand forecasting is particularly challenging at the moment given that the last couple of years’ sales data is heavily skewed and customer behaviour has changed considerably as a result of the pandemic. However, there are still a number of practical steps you can take to improve your forecasts.
You’re likely to have experienced periods when items have been out of stock over the last 12 months and, if this is the case, it’s important to exclude these from your forecasts. Not taking these periods into account can have a devastating impact on stock availability in the future.
While you will already have a business system to manage your stock levels, these systems are unlikely to be intuitive enough to ensure that you carry optimum levels of the right stock.
You’ll need to do your own analysis and work with relevant business teams to establish what stock is business-critical and what plans you can put in place to reduce the risk of run-out. What you define as business-critical stock is down to you i.e. it could be the most profitable stock or products that are needed to keep key customers happy.
If your business trades across multiple sites, check for excess stock sitting in warehouses in places where demand is lower. If you have a central warehouse providing for smaller regional sites, be strict with sending the goods they need as opposed to what they want. People naturally ask for more than they need to be on the safe side but this can cause stock shortages in other areas.
Closely monitoring lead times is a must when supply is being disrupted. You should track lead times and act quickly when they start to deviate from expectations. Actions could include:
Having supplier partners in different areas of the world will help to ensure that you have alternative sources when issues arise in one country. With a broad supplier base, you will need to continually re-evaluate to ensure you’re getting the best deals, reliability and delivery speeds.
If you’re a large business that is importing goods, you’ll know that shipments are expensive and you need to make every one count. Don’t let suppliers ship half-full containers and avoid filling them up with products that aren’t business-critical. Every shipment should reflect your forecast’s needs.
If you buy closer to home, you may have minimum order values or quantities to hit and again, you need to be careful about only ordering goods that fit with your sales projections.
Letting computers do the work for you is more efficient and can keep you a step ahead of your competition. Using technology to manage supply chains is critical because:
The entire electrical wholesale and distribution sector is battling stock shortage challenges at the moment. However, with these tools your teams will be well-equipped to overcome these challenges and, most importantly, to keep customers happy.
Bridgewater Professionals specialise in recruitment for jobs within the wholesale, distribution and manufacturing industries, recruiting highly skilled individuals at all levels across the UK and Ireland.
If you’re an electrical wholesale, distribution or manufacturing professional interested in developing your career, get in touch with us today.