Week 6: Supply Chain, Surviving & Thriving đ đ
Introduction: An Unprecedented Time
In the world of eComm, we make and sell physical products. To make these products, you need to set up and operate an efficient end-to-end supply chain. Whether you manufacture your goods in Asia, Central America, Europe, or stateside â this is one of the most important and complex parts of modern eComm.
While we can sell our goods through mature merchant websites like Shopify or on marketplaces like Amazon â both of which have robust software services and a cottage industry of providers to plug into â there are very few shortcuts for the supply chains.
ââUnprecedentedâ is the term to describe the current supply chain ecosystem. We used to spend all of our time building a plan and then executing that plan.â says Ted Pfeifer, Head of Operations at Pattern. Once the plan was complete, you would iterate and optimize. Now, there is no plan.â
Ted continues, âThere is the way you hope things should work â and we spend our time building plans for all of the different outcomes that canât be predicted. Everything used to be linear. Now it is a root system; you need to be able to adapt and build a supply chain that is flexible.â
Working Within the Constraints of Your Reality
What timing, quality, and costs do you need to sell your goods? Understanding these fundamentals are the first steps toward figuring out your constraints of reality for managing and mastering your supply chain.
Know what, and who, you are working with
Rodney Manzo, ex Apple and Harryâs supply chain wizard, and current founder & CEO of the supply chain management startup, Anvyl , has this to say on the subject, âI would recommend knowing every aspect of your supply chain; where your suppliers are located, their equipment, capacity, lead-times, and tooling capabilities, just to name a few. Once you know this, you can adjust as needed to mitigate or eliminate any disruption in your supply chain going forward.â
Know what your audience needs
While everyone wants to offer great quality, the difference between âgood, better, and bestâ is often exponential in terms of cost and time. You might not need to sell the worldâs highest quality flower pot, socks, or pair of jeans. Many times, good is good enough. Often, better is just fine, too. Know your audience.
Donât go to a remote Italian castle to make your dress shoes by hand if you are trying to offer a fun and affordable pair of shoes to a mass audience.
Factor in the importance of time
Timing is similar. You canât always get everything cheap, fast, and good. The phrase goes: choose two and call me back. Sometimes the right partners might be very popular and backlogged â if theyâre right for you, chances are theyâre right for many. Are you and your customers willing to wait an extra 3â4 months for each shipment?
Being sold out sounds cool, but it is not.
How You Manufacture, Matters
Positioning for DTC Customers
We are in the business of selling to customers who vote with their wallets. Shoppers today buying online from small/medium-sized businesses donât just want the cheapest price â they can go elsewhere for that. They want to support businesses they have an affinity for, whoâs story they relate to, and are inspired by.
More and more, our customers want to know where their money is going and how and where the products are manufactured. This doesnât have to always be front and center for every narrative you present, but it is a consideration in terms of the position your brand takes.
Share your journey with your customers
Today we have to have an open dialogue with our customers, not only about how the products are made but also about cost and timing. Jena Wolfe, the co-founder of Piecework Puzzles explains,âThere are two main lessons weâve learned while dealing with supply chain challenges during covid. One, prioritize your relationship with the customer by being as clear in your communication as possible. Set expectations; be transparent and authentic. And, two, plan for delays. Thanks to a constant barrage of shipping delays, we learned to pad our timelines â and then pad them again! We changed our marketing plans to allow for extreme flexibility. Be agile, and donât let last minute changes send you into a tizzy!â
Vendor & Supply Chain Management
Great products need great relationships with great vendors
As we discussed in Week 4âs article on Product, a big part of B2B is human relations. To make great products, you need to have great relationships with great vendors. Today, forming and fostering those relationships is more challenging than ever. We canât always visit our partners in person, where we can hash out a deal over a dinner or a walk. We canât always visit the factory floor to touch, feel, and give feedback on our goods in person.
Managing unpredictability and complexity
More and more, the global supply chain is interconnected, digitally intertwined, and in constant flux, making it unpredictable and complex.
That means you have to be more adaptive than ever in overseeing your global supply chain. In addition to leveraging SaaS products for tracking, analyzing, and assessing the end-to-end process of your goods, you have to find creative ways to ensure the products are being made within your cost, quality, time, and story parameters.
That may mean using more video calls to review products or hiring on the ground liaisons in the regions you work in to help with quality assurance. It may mean waiting longer to ship your products as you wait for samples to be sent and feedback to be collected from your partners. It may mean passing on end- costs to the customer because the process and materials have increased your costs. Just as important as managing the process, it is critical to adapt and be mindful to set appropriate internal expectations within teams and external expectations with partners and customers.
Patternâs Director of Product Supply Chain, Aditi Sabharwal, elaborates, âThere is a lot of value in treating your vendors as an extension of your team. I try to be firm but empathetic in my interactions and really lean into building trust. Strong relationships are when your vendors are as invested in the overall success of the brand â this enables you to have the tougher conversations and push each other to deliver an incredible product (or service!).â
Transporting Goods
A big challenge we are all facing right now is the cost of moving goods. The global transportation economy is overwhelmed with an increase in demand and the subsequent time, cost, and headaches have also increased. Itâs important to lean into fundamentals now as well as set up some new best practices.
Whether big or small items, you want to always avoid âshipping airâ â the amount of space taken up in a box by the space around your item. Thatâs why âflat-packingâ larger items has become so important. But itâs also why so many larger bulk items are taking longer and costing more to ship . Additionally, shipping via truck or shipping containers is much more cost effective than by air but often requires significantly more pre-planning.
Success
Setting expectations is key now â from projections and demand forecasting, to the promises we make to retailers and customers. We have to be anti-fragile when setting up our supply chain in order to navigate what has become the most unprecedented era in modern memory for producing and moving physical goods.
Know that it is challenging for everyone. Know that if you can make it through the back-half of todayâs global landscape, you are going to thrive in the new world that is set up. Pressure makes diamonds, and heat forges steel. These are challenging times, but great brands are being born and made every day. Be one of them.
Good luck!
Pattern đĄ
Make sure to check out our prior installments:
Week 1: Why Great Brands Make Great Businesses
Week 2: The Power of Community & Why Great Brands Have It
Week 3: Mastering Foundational & Performance Marketing for eCommerce
Week 4: How to Build a Great Product
Week 5: Culture & Values
If you are a business owner interested in learning more about joining PatternâŚ
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