"Order Cancelled": Building resilience to supply chain disruptions
September 28, 2021
A Frantic Reality
Product shortages. Price increases. Multi-month delays. The pandemic has created a perfect storm dubbed ‘The Great Supply Chain Disruption’.
Rising infection rates are preventing factories from manufacturing products and shipping them to brands. A dwindling supply of labor and raw materials means brands are paying more to put items in production, and scrambling for something to sell when shipments are delayed. For product and merchant teams tasked with delivering the right product at the right place and time, building an assortment against this backdrop of supply chain volatility has been especially challenging.
With brand partners around the world, the MakerSights team has been uniquely positioned to hear first hand the unique problems and frustrations that these disruptions are creating for retail. Working together with our partners, we’re finding ways to help brands be better prepared for and resilient to supply chain uncertainty.
Here’s what we’re hearing and seeing from these teams….
1) When are we getting that product order?
Pandemic-induced shortages and closings are delaying product deliveries. Where before, a brand could place a holiday order in September and expect to receive it by December, today that same order might not be delivered until February. Sometimes manufacturers have shut down completely and given brands no notice on when to expect delayed orders. In order to leave room for production and shipping delays, teams are rushing to finalize assortments and place orders as quickly as possible.
MakerSights’ recommendation: Fast track the assortment
Building the assortment can be time consuming. Think 90-page powerpoints and 5-hour line meetings. Cutting out unnecessary meetings and simplifying the back and forth between teams are opportunities all brands can seize to move faster. With MakerSights’ Digital Line Review, teams are getting ahead of internal objections and roadblocks by sharing the assortment digitally. Feedback on line architectures and products is shared asynchronously so that adjustments can be made without having to coordinate around everyone's schedule and before major milestone decisions. These strategies are helping teams cut back on unproductive meetings and place orders months in advance.
2) We aren’t getting every product in our order?
Resources are scarce, so it’s become increasingly common for factories to notify brands that they can’t make all items in a given order. When this happens, manufacturers are asking brands which substitutes they’d like to move forward with. Unprepared and pressured to make last minute decisions, teams are rushing to revise the assortment in a way that will still optimize for profits. Often, these decisions are a shot in the dark.
MakerSights’ recommendation: Quickly reallocate budget of rejected orders
Brands are taking proactive steps to handle manufacturing inconsistencies. Before any orders are placed, product and merchant teams are using MakerSights’ Investment Review to gauge the depth of consumer demand across the assortment. In the event a product is rejected within the PO, merchants can quickly respond by ‘dropping’ the product from the assortment. Instantly consumer demand adjusts, allowing teams to re-allocate dollars they would have spent on the dropped product to one that can be produced, and is expected to perform well with consumers.
3) Where are our samples?
Product orders aren’t the only thing getting delayed and cancelled, sample delivery has become just as inconsistent. As a key part of adoption and sell-in meetings, most teams equate “no sample” with “no sale.” But manufacturing shortages and significant delays are forcing teams to either delay milestone meetings or make decisions without their usual prototypes and samples. In their place, brands are falling back on historical sales data, merchant intuition and CADs, hoping that these inputs alone can inform a consumer resonant assortment. For historical data points in particular, the pandemic has made hindsight information increasingly risky to depend on due to erratic consumer purchasing behaviors.
MakerSights’ recommendation:Leave the sample behind, stick to your deadlines
Building confidence without a sample isn’t straightforward. But in combination, consumer data and digital imaging are suitable, and even faster, predictors of assortment success. Using MakerSights’ Voice of Consumer, teams devoid of samples are collecting real-time consumer sentiment on 3D renderings to iterate on styles and confirm adoption hunches. With real-time insight into consumer demand, our brands are far less dependent on historical data that is susceptible to changing trends. By vetting products before production, teams are seamlessly moving through assortment milestones regardless of sample availability.
Time to take action
The pandemic has exposed supply chain vulnerabilities, not created them. The upside: there are tangible, actionable ways to protect your assortments against continued disruptions. If you’re a current brand partner, reach out to your support contact to ensure your team has access to the solutions mentioned here. If you’d like to work with MakerSights to build a flexible go-to-market process, reach out to us so we can help you get started.
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