How is this VC backed start-up handling the toughest Q4 in decades?

How Is This VC Backed Start-up Handling The Toughest Q4 In Decades?

Damian Conroy, Supply Chain Director

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We have all read articles over the last twelve to eighteen months that have been either informing of, or forecasting a supply chain Armageddon.

Issues affecting the industry range from the sublime to the ridiculous: from Suez Canal mishaps, COVID lockdowns in both factories and ports, decreased shipping line availability and skyrocketing prices, to port congestion in China and then destination markets in Los Angeles. To add further misery to a bleak 2021, we have had electricity restrictions in China resulting in reduced factory output.

If this list of the bad and worse wasn’t extensive enough, all of these are external to Amazon. And like anyone that supplies, sells, or interacts with our favourite global marketplace, Amazon has its own quirks and idiosyncrasies, which are sent to challenge us logisticians.

Putting aside all the doom and gloom, Olsam to date has overcome each of these challenges, and as of today, has stock availability across all lines and markets above 97%. You may well be wondering: how has this minor miracle been performed against a backdrop of so many industries facing significant outages in stock?

Firstly, and most importantly, Olsam prides itself on its people and this is no exception within the Supply Chain team. Through dedication and world-class experience, and by focusing on key deliverables, the team have created and maintained a streamlined supply chain, with a well-managed range of suppliers and geography-specific logistics partners.

Secondly, across the team, we bring a positive can-do and must-do attitude in the face of adversity, as well as the understanding that something will go wrong, and is likely to, when we least expect it. The challenge faced is to firstly mitigate, and then secondly when all else fails, react to these events. This can be seen by the following actions that have underpinned Olsam’s Q4 planning and delivery.

Forecasting.

Through clear engagement with Brand Managers, Olsam was able to agree market expansions by brand and SKU rationalisation. Crucially, by using significant data analytics, we finalised ordering requirements by SKU and market for Q4. These sessions concluded in June 2021, enabling early ordering. As we progress through Q4 now, all ranges in all markets are stocked in 3PLs and Amazon Fulfilment Centres.

Great Partner Relationships.

At their core, businesses are made up of the people that we either work alongside, sell to, or interact with. From the suppliers in China to our 3PL partners across the globe, we treat all with equal respect, we engage in long-term relationships, and importantly, we spend time nurturing these friendships. The time and effort inputted into building these relationships bears fruit when unforeseen events cause delays. For example, when our US 3PL experienced a roof-destroying storm at their facility, Olsam only lost 24 hours, thanks to the Seko Logistics’ work ethic and desire not to fail. Added to this, all orders were upgraded from 48 hours to 24 hours, and so there was no detriment to customer service at all.

Data Refresh.

In the changing environment we find ourselves in, understanding where you have never been is key. Through access to hundreds and thousands of data points refreshing daily, we have developed a clear grasp of the impact that Global and Amazon issues have had on supply. I like the analogy that Supply Chains in 2021 are like a game of chess; you wait for the next move or event and then react. Now imagine trying to play chess and only being able to see half the board. Data accuracy and timeliness allows Olsam to understand the environment and make the right decisions at the right time.

Making allowances for the unknown.

Something will go wrong and is likely to do so in a way which creates maximum disruption to your organisation. Olsam have prioritised Q4 stock availability and the subsequent sales, ranking, and reviews. To do this, our normal end-to-end supply chain timelines were extended for Q4 to partly account for additional supplier and shipping lead times, as well as delays for FBA receipt. This was closely analysed against working capital outlay, and so these timelines were kept within acceptable financial tolerances.

Changes to, and replacement of FBA as required .

Olsam, post thorough financial analysis, have moved from FBA palletised shipments from in country 3PL to FC to carton shipments utilising UPS. In alignment with data refresh, this has allowed smaller and more frequent replenishments into Amazon Fulfilment Centres, and so delays that could have been experienced on booking windows or goods in receipt have been mitigated. As a further contingency for Q4, we have set up alternative routes to market via Seller Fulfilled Prime (SFP), for brands that have a larger number of slower selling lines. Through directing tail selection via this channel, we have ensured that our Amazon inventory capacities are reserved for our best-selling products.

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Supply Chain management in 2021 is no different to any other year at its core: we buy and move boxes from point A to B. However, this year more than any other, we have had more issues to overcome along the journey.

A single takeaway if needed: along this journey, surround yourself with great people internally and externally, make work enjoyable, and allow your teams to use their initiative, skills, and experience. For us, every action, process, decision to avoid and / or mitigate these challenges has been thought of and implemented by someone on our team. A colleague many moons ago used to wax lyrical about this, and now through years of fact-based evidence I have found that “Team work really does make the dream work!”