What does your supply chain look like?
The year that was…
For many, the year 2021 will be remembered as one of the most volatile and disruptive in terms of the global supply chain. Wildly fluctuating demands, factory shutdowns, and shipping shortages combined to wreak havoc on even the most advanced supply chains worldwide.
As a result, virtually every business model has been forced to rethink its operations. Previously popular strategies to optimise efficiency, such as lean and just-in-time are no longer adequate to meet the challenges of an unstable supply chain. Where the price was previously a major driver in most buying decisions, stock availability is now the key factor in helping many companies to select their preferred supplier.
In Stock + In House = Fast
In early 2021 ADP Store Fixtures made two key commitments that served to minimise disruption to our loyal client base.
- Commit to increasing Australian stockholding of popular S-Mart Shelving range by 200%.
- Invest in existing Australian joinery facility with the purchase of automated CNC machinery.
During 2021, the average lead time for ex-factory (China and SE Asia) almost doubled from 10-12 weeks to in excess of 25 weeks. In the retail industry, delays of this magnitude create added cost pressures such as:
- Paying rent on stores that are unable to open.
- Difficulties with hiring staff due to unpredictable store opening dates.
- Limitations on rapidly securing an attractive site that becomes available.
For its Australian warehouses, ADP Store Fixtures recently doubled its stockholding of selected product ranges including S-Mart Gondola Shelving. This enabled clients to retain the flexibility to deploy sites with reduced risk of being impacted by delays to retail fixture deliveries.
Did you know that ADP Store Fixtures operates its own in-house joinery facility? Located in Western Australia, our joinery facility incorporates the latest automated machinery and employees skilled local tradespeople. Our facility produces a range of specialised retail joinery such as Counters, Glass Display Cases, Supermarket Joinery and much more.
What does your Supply Chain look like?
In any industry, no less in the world of retail fitouts, it is a great idea to map out your supply chain. Often, this means digging deep and you will uncover a raft of information on not only your direct supplier (1st tier), but also 2nd and 3rd tier suppliers and even the entire distribution process.
This mapping process should then allow you to categorise suppliers as low, medium or high risk. This should take into account the impact on your revenue if a particular sector experiences a delay or shutdown. Could your business ride out the issue, or would it be forced to take drastic action?
Example 1: In 2021, we saw a critical disruption to the Australian supply of white carcass board used in almost all locally manufactured cabinets. For Australian cabinet makers, while the 1st tier supplier (board manufacturers) were operating normally, supply of a critical ingredient used to produce the laminate surface was impacted by severe restrictions to supply out of Europe and Asia.