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The Backorder: 10 July, 2024

The Backorder
5 Minute
Greg Roughan blog profile picture

by Greg Roughan

Posted 10/07/2024

All aboard the Nappy Train! 👶🚂 Today we cover a babycare company winning awards for its alternative shipping strategy, practical advice for shortening lead times, and insider logistics tips. In this week's edition of The Backorder:

  • Drylock's unique, carbon-friendly transport solution
  • 4 easy ways to shorten your lead times
  • Industry insights from a shipping and logistics expert

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In supply chain headlines

  • UK shop price inflation down to just 0.2% in June. New industry data has revealed the sector's inflation rate has fallen to its lowest in nearly three years – down by 0.4% compared to May (0.6%), writes Harry Wise.
  • Drylock's 'nappy train' wins Supply Chain Initiative of the Year. The CO2-neutral babycare manufacturer's eco-friendly rail route between Belgium and its largest production facility in Czechia resulted in a 10% efficiency gain on palletisation and a 75% reduction in greenhouse gas emissions.
  • 22% cost increase expected for back-to-school shopping. Parents in the US expect back-to-school spending to rise 21.8% this year according to a new JLL survey of 1,026 parents, explains Retail Dive.

4 speedy ways to improve lead times

Sometimes long lead times just happen, and there’s not much you can do. But some strategies will minimise their impact and shorten delivery times of important goods – providing a welcome efficiency boost to your order fulfilment process.

1. Tackle internal lead time. If it takes a week between knowing you need to buy supplies and getting the purchase order approved, then you have an opportunity to cut lead times. Remember, every day of delay is a day’s worth of stock cover you could avoid buying.

2. Near-shore suppliers. Okay, you probably did this already during the supply chain crisis. But if not, consider finding alternative suppliers that are physically closer to you. Even if they’re more expensive per-unit, they can prove cheaper in the long run if they let you operate ‘just-in-time’.

3. Share your forecasts. There’s no point preparing sophisticated demand forecasts if you surprise your suppliers with them a week before goods are due. Keep vendors in the loop to help them prepare for your upcoming bumper order.

4. Reset reorder points. This doesn’t actually shorten your lead times, but it does soften their financial sting. If you recalculate your reorder points based on industry-standard safety stock calculations or a smart tool like AIM, you can adjust your purchasing strategy to ensure your financial outlay on stock is appropriate to lead times right now.

A deep sense of fulfilment – Meet David Renwick

David Renwick

David Renwick is the Product Marketing Lead at shipping and fulfilment platform Starshipit. We asked him about trends driving eCommerce sales, what’s happening in the 3PL space, and why shipping automation gets him out of bed in the morning…

What got you into logistics tech?

"I've always been interested in how technology can help businesses grow and succeed – especially small firms. For me, working in shipping and fulfilment automation ticks all those boxes."

What trends are you seeing in the 3PL space?

"Perhaps unsurprisingly, given the current environment, we’re seeing 3PLs focus on introducing efficiencies and managing their costs. These areas are always top of mind, but right now they’re essential. I've also seen 3PLs be quite flexible when it comes to their tech stack. For example, using a WMS for clients over a certain volume, then using a different solution for their smaller clients."

Are eCommerce firms still looking at sustainability in this economy?

"There's a lot of opportunity [in sustainability] for retailers, far more than you might think! There are the obvious ones like eco-friendly packaging (which certainly shouldn't be discounted), but you can also do things like combine multiple orders into a single shipment to reduce packaging waste and the number of trips needed, and use carbon-neutral carriers like Sendle."

What are your tips for boosting eCommerce profitability?

"I’ll start with an answer from my area of expertise – shipping automation. I honestly think it’s the best way to increase profitability, just by the sheer number of hours you can save. Plus:

  • You’re in a strong position to negotiate shipping rates once you’ve integrated multiple different carriers.
  • You can lower costs by setting automations to use the cheapest carrier based on postcode, town, etc.
  • And by managing shipping margins effectively, you can optimise your pricing strategy to maintain profitability while delivering a great customer experience.

"If you're looking for another area to boost profitability, consider upsells and cross-sells. At different points in the customer journey you can suggest related or higher-value products to customers to encourage additional purchases. Sounds simple, but it's often a winner for retailers."

Any podcasts or book recommendations for our readers?

"Stuff You Should Know is always a good one for a road trip! And for books, anything by Annie Jacobson."

On the lighter side...

Backorder memes

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Greg Roughan blog profile picture

By Greg Roughan

Article by Greg Roughan in collaboration with our team of inventory management and business specialists. Greg has been writing, publishing and working with content for more than 20 years. His writing motto is 'don't be boring'. His outdoors motto is ''I wish I hadn't brought my headtorch', said nobody, ever'. He lives in Auckland, New Zealand, with his family.