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Creating Resilience: Keeping Merchandise Flowing Amid Supply Chain Uncertainties

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The perfect storm dubbed The Great Supply Chain Disruption has caused much hand wringing over product shortages, multi-month delays and increased prices. But there is a silver lining. This unprecedented situation can serve as a learning opportunity to help brands and retailers proactively prepare for the next disruption—whatever that may be.

After all, supply chain challenges happen all the time, and at all different scales. What comes next might be another global pandemic, climate catastrophe, multilateral trade war, some other unforeseen disruption, or some combination thereof. The most successful brands will be those that preemptively reduce their exposure to risk—equipping teams with processes and tools that position them to respond more nimbly to uncertainty.

With brand partners around the world, retail product decision platform Maker/Sights has gotten a first-hand glimpse into how global disruptions affect the industry, and what can be done by way of preparation. Here, Maker/Sights offers recommendations for industry-wide problems based on three of its products: Digital Line Review, Investment Review, and Voice of the Consumer.

Problem #1: Shortages and closings are delaying product deliveries.

Supply chain shortages can be a year-round problem, but they’re felt most acutely during fashion’s crucial holiday selling season. But how can a retailer properly build a holiday assortment if orders placed in September don’t arrive until the next February? And how can a brand even plan for delays when supply chain uncertainties exacerbate the situation? Making matters worse, manufacturers sometimes shut down completely without notice—whether due to a pandemic or a lack of raw materials—leaving brands in the dark. To compensate for production and shipping delays, teams are rushing on the back end to finalize assortments and place orders as quickly as possible.

Recommendation: Trim the fat to fast-track the assortment

A brand or retailer can’t control supply chain disruptions, but they can control how long it takes for them to build a product assortment. And this goes a long way toward compensating for slowdowns. For example, building out a product assortment can be time consuming—think 90-page powerpoints and 5-hour line meetings—but cutting out unnecessary meetings and simplifying the back and forth between teams create opportunities for brands to move faster.

Maker/Sights’ Digital Line Review helps teams proactively diminish internal objections and roadblocks. Feedback on products and line architectures is shared asynchronously, meaning that adjustments can be made without coordinating around everyone’s schedule and before major milestone decisions. This helps teams cut back on unproductive meetings and place orders months in advance.

Problem #2: Teams must revise assortments to compensate for partial/cancelled orders

When resources are scarce, factories can’t completely fulfill orders for all their partner brands. While manufacturers might offer to substitute other products instead, this often catches companies off guard. Unprepared and pressured to make last-minute decisions, teams might rush to revise the assortment in a way that will still optimize for profits. It is often a shot in the dark.

Recommendation: Instantly reallocate dollars from rejected orders to others

Proactive measures can help a brand be more knowledgeable and prepared to manage manufacturing shortfalls. Even before orders are placed, product and merchant teams using Maker/Sights’ Investment Review can gauge the depth of consumer demand across the assortment.

If a product is dropped from the PO, merchants “drop” the product from the assortment and instantly re-calibrate consumer demand. This re-allocates dollars to produce products that will also perform well.

Problem #3: Sample delivery has become inconsistent

In addition to product delays and cancellations, supply chain disruptions have put a crimp in sampling as well. This is a problem for two reasons. One, teams often equate “no sample” with “no sale,” and two, teams must delay milestone meetings and/or make decisions without prototypes and samples.

In the absence of samples, brands fall back on historical sales data, merchant intuition, and CADs to inform consumer assortment. But if there’s one thing the pandemic taught us, it’s that historical data points don’t apply in compromised situations. In other words, hindsight is never 20/20 when consumers have all changed their behavior.

Recommendation: Rely on real-time forward-looking consumer insights, not backward-looking historical data

For companies accustomed to working with samples, it’s not always easy to switch gears, but by vetting products before production, teams can move through assortment milestones without samples. This is achieved by digital imaging advances combined with consumer feedback data.

Maker/Sights’ Voice of the Consumer helps teams collect real-time consumer sentiment on 3D renderings so they can confirm hunches and iterate on styles. This way, brands are less dependent on historical data—which is never reliable among fickle trends—and more focused on real-time consumer insights.

Be proactive

Overall, the pandemic didn’t create all the supply chain issues facing the industry, but it exposed our vulnerability to them. Those willing to analyze the current situation, apply the most relevant learnings, and think outside the box will have the best chance at adapting a more resilient process for the future.

To see how Maker/Sights offers tangible, actionable ways to protect your assortments against continued disruptions, click here.

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