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As global supply chains increase in complexity and customer shipping and delivery time expectationscompress, ensuring your business considers a system driven approach to inventorymanagement is essential to success.
Elkay recently embarked on a five-year journey to open six new distribution centers, supporting both our U.S. manufactured sinks and drinking water products as well as our import program. Strategically placed across the U.S., once completed, we’ll be able to reach over 98% of our customers within 2-day ground delivery. While the prospect of providing world-class service is exciting, we also had to address operating system logic tocorrectly route sales orders while ensuring proper inventory is available in the right quantities at the correct location. After extensive research, we found a solution and began a two-year implementationprocess. Following the successful pilot launch and paying attention to lessons learned, our system now optimizes our growing network. Along the way, we took the time to evaluate our product lead times, making several corrections to provide more accurate data for decision making.
Although we thought our plans were right on track, COVID-19 arrived and brought new challenges and opportunities. Suddenly, it seemed everyone wanted to add a touchless feature to their public drinking water solution.Nationwide demand for our touchless drinking water products, including our bottle filler, reached unprecedented levels.
Creativity is always a great skill to have in your arsenal, which came in handy foradapting one of our newest products, the Smartwell, into a touchless product via app development. You can now select your favorite flavored and enhanced water drink via your phone and dispense it hands-free! From an inventory management standpoint, we welcome technology development that may provide faster and more accurate data to improve our decision making across the enterprise.
COVID-19-related market conditions brought new inventory dynamics, as demand for components grew commensurately with demand in our plants. Since we use domestic and international components, we noticed that our global supply chain visibility could stand to improve. Luckily there are several great solutions out there that we’re currently evaluating.
Over the summer, many companies decided to severely cut back on inventory until everyone could sort out what happened to the world impacted by the pandemic. Retailers, perhaps more than other companies, had the most significant challenges, and consequently, many reported less than desirable performance over the last few months. Understandably people are out less physically shopping in brick-and-mortar stores, and of course, many of the big on-line retailers are prospering. It was interesting to note a common thread in financial performance, though. Many reported they could have captured more significant sales but were caught off guard and ran out of inventory. Anyone who has shopped for popular items for their new home offices or stay-cation backyard items (not to mention early on runs on disinfecting wipes and paper products) understands the dynamic.
Balancing a recovering China’s factory production with long lead time planning became a real art. Systems were helpful, but strong personal relationships didn’t hurt, either.
Lesson learned:Drive for tech-supported resiliency to adapt as quickly as possible to game-changing scenarios that seem likely to occur more frequently. Now that demand for healthy inventories are growing, demand for warehousing and all modes of transportation are peaking, throwing more challenges for inventory managers. U.S. ports today are bursting at the seams with a tremendous surge in volume coming in from Asia and Europe, causing some severedelays and spiking rates and surcharges.
Another big lesson we’re taking away from the challenges of moving to a system-based logic for inventory management is getting out ahead of customer demands and equipping your organization with the best infrastructure you can afford.