FRANKLIN, Tenn. — The last three years have been ones of trauma and turbulence in which global supply chains went from an unprecedented stoppage of production to a massive production increase in the face of unbelievable demand in a short period.
Understandably, your relationships with your favorite vendors were stretched to the limit. Their inability to deliver products at the old cost became impossible.
The laundry industry had been in a state of unvarying cost. Since the economic crash of 2008 and the cotton crisis of 2011, the cost of the products has been very steady.
Most vendors proposed and implemented very few cost increases over that period. Gains in efficiency and minor price adjustments were enough to accommodate the low inflation rate and the steady cotton prices, making it a very passive environment for vendors not to have difficult discussions about availability or price.
The world enjoyed nine years of very dependable supply chains. Factories could schedule out production, secure an adequate supply of raw materials and be guaranteed very reliable freight—over the ocean and on land.
The steady world we lived in all came crashing down with the COVID-19 pandemic, highly impacting 2020 to 2022.
Laundries started having to cancel orders and return products with an unknown future. These were difficult conversations.
The boomerang impact late in 2021 and through 2022 caused the reverse. There were no inventories, no goods on the water, no cotton in spinning and no yarns on the loom.
Factories had also pushed back on their vendors the purchasing of chemicals and other supplies needed to make products.
There also came along a once-in-a-generation need for medical supplies: isolation gowns, scrubs, etc. These products were nowhere to be found and took some specialized manufacturing to produce, taking away resources from other products.
It is at this point that having not only a cordial relationship with your vendor base is important but also a strategic relationship.
There is a level of trust that was enacted when the vendor sales rep showed up at the door with price increases and inventory shortages.
Were you able to sit down and receive accurate, factual data on the direct causes of these increases and how long they would last? Would the product be available? At what price?
How did that go?
The successful strategic alliances relied on long-term relationships—those that, over time, had cultivated a level of trust on both sides to help ride out the storm.
If you did not have this, you found yourself in a sea of many vendors that may or may not be able to execute a plan to keep your business running. It was not a time to start testing new relationships.
Communication with trust became a must. You had to have open communication with a trusted source, one where the information on product availability and cost were upfront, accurate and you could communicate down to your customer base with accuracy.
The ability to work with a supplier to come up with creative solutions was also key. Were you able to have a paradigm shift away from products you thought were irreplaceable to alternate products that were similar and available? Could you use a no-stripe bar mop vs. a yellow stripe?
Having product is the most important thing to keep the plant and business running. With no product there is no business.
These problem-solving ideas could only occur in an open communication relationship that focuses on a strategic alliance between the supplier and yourself.
These uncertain times also generate the temptation to move your business and try new vendors that have been knocking on your door for years. Maybe they would have the secret sauce to deliver products that were not readily available.
This did work in some situations and pointed out the need to diversify some of your supply chain needs, but those could be short-lived.
You needed to rely on your long-term relationships to guarantee future supply. They had a forecast and a plan to deliver, but some secondary suppliers did not.
It was essential to fully understand the constraints of conducting regular business. These constraints impacted all suppliers equally.
The shortage of raw materials, chemicals, production capacity and transportation were not unique to one supplier. It affected all of them.
The world we live in has permanently changed. There are inflationary cost increases that have been enacted that will not be reversed.
It will imperative that your future vendor relationships be strategic. The keys to success with your suppliers should include:
- Open communication, regularly.
- Forecast planning.
- Inventory visibility.
- Supply chain and cost updates.
- Innovative and alternate product solutions.
- Creative ideas to purchase better, packaging and delivery methods.
Remember that the way you handle difficult times with your vendors can have a lasting impact on your relationship beyond the immediate crisis.
By working together, being understanding and finding mutually beneficial solutions, you can emerge from challenging situations with even stronger vendor relationships.
There may not be another worldwide crisis soon, but there continue to be other threats to business locally and regionally.
Shortages of labor and some raw material could cause smaller, but still impactful, delays to delivery.
Be vigilant. Be strategic. Be aware.
Keeping Supplies on Hand, on Time (Part 1), June 20, 2023
Keeping Supplies on Hand, on Time (Conclusion), June 21, 2023
Have a question or comment? E-mail our editor Matt Poe at [email protected].