On this day in 1819, Simón Bolívar defeated Spain in the Battle of Boyacá on his way to liberating half of South America from the control of the Spanish Empire. 🕊️ On this day in 2024, you can achieve some small independence of your own by making preparations for unexpected supply chain battles. In this edition of The Backorder:
- How the EU anti-deforestation law will impact demand and pricing
- Scenario planning exercises your company needs to implement
- How Good & Proper Tea found success in a competitive market
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In supply chain headlines
- UK's manufacturing sector falls to 12th in the world. For the first time in recorded history, UK manufacturing has dropped out of the top 10 world rankings, reports The Engineer.
- Intentional AI adoption plans essential to reap manufacturing benefits. In a recent event hosted by Industry Dive, Jennifer Peters – Director of BI and data analytics at Nestlé Purina – explained that AI technology is a tool to supplement the workforce to drive efficiency, and must be backed by intentional plans.
- EU anti-deforestation law set to impact demand and pricing. According to supply chain risk experts, the European Union Deforestation Regulation (EUDR) will drive consumer prices up and demand down, writes Journal of Commerce.
5 scenario planning exercises worth doing
A vital step in building supply chain resilience is developing contingency plans for when things go wrong. We’ve worked out the most important scenarios to plan for – and preparations you can make.
1. Unreliable suppliers
Regularly evaluate supplier performance so you know when things aren’t going well. Include clauses in your contracts that address reliability issues, and diversify your suppliers so that all your success isn’t riding on a single vendor’s stability.
2. Natural disasters
Develop emergency response and business continuity plans, and conduct regular drills to ensure your staff know what to do in the case of an emergency.
3. Unnatural disasters (e.g., the Suez Canal blockage)
Diversify your shipping options; establish relationships with local suppliers and alternative shipping routes to fall back on should international trade suffer an unexpected disruption.
4. Theft
Physical security measures are a no-brainer, but cameras (and managers) have blindspots. Train employees on how to act vigilantly if someone tries to rob your business; for internal theft, use automated inventory software so that stock discrepancies don’t go unnoticed.
5. Cybersecurity fraud
Regularly audit your cybersecurity and vulnerability to attacks, and test your employees on their ability to keep company data safe. Invest in cloud-based business software that offers advanced measures such as data encryption and multi-factor authentication.
Navigating the tea supply chain – meet Josh Mordecai
Josh Mordecai is the Director of Operations and Business Development for Good and Proper Tea. Josh has been with the business 7 years, although he joined on a short-term contract when Founder Emily was due her first child. Josh was kind enough to share with us insights from managing multiple supply chains.
In your own words who are Good and Proper?
"We’re a female-led premium tea brand managed out of London. We’re loved by the UK’s finest cafes, hotels, restaurants, as well as a loyal and fast-growing community of home tea drinkers. We’re on a mission to show the world how good tea can be."
And how are you doing that?
"The barriers to entry for tea are low, so we need multiple USPs to stand out. We go to great lengths to source really good teas. We do a lot of tasting to ensure that our products stand out and that we are sourcing the best tea for the price point we're trying to hit. Our customers can have the best tea in the world, but if they're not brewing it properly, they're not going to bring out that flavour. So we've got loads of digital resources."
Can you share any forecasting wins?
"We identified that the market for matcha was driven by matcha lattes – most cafes now have matcha lattes as part of their offering. We noticed that that was significantly increasing, forecasted accordingly, and were quite bullish with our supply partners to meet this demand. We've seen 155% year on year growth in our latte-grade matcha, but we've managed to maintain really good availability throughout. It's now our highest grossing product. Having that data at your fingertips and being able to interrogate it quickly is really important."
How have you been protecting margins?
"We've created a huge amount of transparency on Unleashed. As we've grown, we've managed to achieve efficiencies at scale – larger production runs, larger purchases of tea. We also work collaboratively with our co-packers and logistics partner."
What's your best advice for food and beverage brands looking to scale?
"Be patient. As a small brand in a challenging sector, there are infinite distractions. Stay focused and disciplined. Don't spread yourself too thin, just focus on that one thing and do it well. Also, ask people for help. We've got a great network of FMCG brands who've faced similar challenges to us who are willing to help. So don't be afraid to ask."
Do you have any reading or listening recommendations?
"Dan Pope's Hungry podcast. I've known Dan for a while. He's a great guy and he manages to get really amazing guests, and has some really insightful conversations. And then the Young Foodies newsletter is good when that comes out."
On the lighter side...
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