The supply chain nightmare has hit everybody hard and nobody in retail seems to be immune. Supply chains are dramatically impacting how full or empty the shelves in stores are, whether they’re big chains or independent stores, according to Mark Resnick, COO of Supermarket Parts Warehouse.
But here’s what you need to know to navigate through these challenging times.
The Griffin Report of the Northeast states that “95 percent of retailers say inventory optimization is top priority.”
Resnick said purchasing managers he has spoken with believe that:
- Nobody is meeting deadlines.
- Stores have to wait and adapt to “what’s available.”
- That with the apparent shortage, you have pay whatever the price is and accept their deadline, and hope it arrives without damage
He said he was “stunned” by what he heard when speaking with big chains and independents:
- That “the shortage” is true across the boards, no matter the size of supplier.
- That there is a steel shortage.
- Product is stuck on a boat which can’t dock.
- The docks in the USA are antiquated and not efficient.
- There is a shortage of drivers.
- Labor shortage – can’t staff up.
- No one wants to work.
- It can’t be done in your timeline.
Here are the facts, Resnick said:
For those (like Supermarket Parts Warehouse) who have long-term relationships with domestic steel companies, the supply is available and not impacted by “the shortage.”
If you were using vendors that use American steel (something SMPW is proud to support), you wouldn’t have been waiting for “the ship to come in.”
When using major freight carriers, while they do have hiccups, most are delivering on time.
Companies that pay decent wages and care for their employees inspire loyalty resulting in employees who appreciate their jobs and come to work every day.
Few truly enjoy sitting home, being unproductive and doing nothing. Nothing really compares with the pride of doing a job well and being compensated for it.
The best companies take pride in making everything conform to what you need in timing, quality, price and service and will do whatever they can to meet that challenge.
How We Are Navigating Through This New Normal
The timelines for many of the items needed by independents and big chains are being pushed out as long as five months.
“I’m not about to tell the independents and big chains we serve that they have to wait five months for anything. They have enough challenges without adding to it,” Resnick said. “This is why I go by the old saying: ‘better have what I don’t need, than need what I don’t have.’ Not sure if I heard that years ago or learned that over time, but either way it seems to work. So we purchase way more ahead of time to avoid ‘delivery issues’ and ‘deadline concerns’ for our top products.”
He said the only practical way Supermarket Parts Warehouse has found to navigate through this “pinball-game insanity” has been built on being super-proactive: by over-purchasing where it can.
In stark contrast to the supply chain issues and empty shelves prevalent today, Supermarket Parts Warehouse’s inventory levels have never been as high as they are today, he said.
The downside, of course, is how do you possibly project more than 1,000 different items, and how can you afford to over-purchase the top 100 to be sure you’re covered?
The Only Offensive Strategy That Ensures Top Shelf Service is Maintained
With steel prices 300 percent higher than they were not long ago, that makes for a difficult purchase, Resnick said. There have been times during this crunch when steel availability and prices lasted only as long as you were on the phone and immediately increased once you hung up the phone.
Even aluminum is not immune to the supply and demand dynamics happening today.
“We purchase domestically. Not only did the cost of the raw product go up but aluminum mills are so busy they, too, can’t provide product for 20 weeks and then the cost is determined based on the cost of the product at the time of delivery,” Resnick said.
When those power plants in Texas went down due to a power outage in February 2021 (due to that unprecedented freeze) leaving 10 million people without power, the global supply chain was intimately impacted.
It became incredibly difficult for anything with foam insulation, like refrigerated cases, walk-in panels and other items to be gotten in any way. The impact was a global plastics shortage.
Even Supermarket Parts Warehouse’s honeycomb for airflow areas as well gaskets for doors were affected by the same factories in Texas that make the chemicals for foam insulation.
“With all of that said, due to our over-purchasing offensive strategy, we have meeting delivery demands for well beyond the industry average, so stores don’t have to deal with limited inventories and hearing “you have to wait X months for shipment,’” Resnick said.
“As a last word, this ‘over-purchasing’ strategy can be taken too far. Like when my wife turned a guest bedroom at home into our bathroom tissue, hand sanitizer and paper towel warehouse,” he said. “So yes, it’s possible to have too much of a good thing, which isn’t the worst thing to be known for in the world today.”