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Sunday, September 5, 2010

Supply Chain Issues

So you have a great idea. It's either something you can make yourself to start off with, or something that you source others to make for you. When it comes to supply chains, the issues are the same.
When people that start with a hobby that turns into a business, a business plan usually comes as an afterthought. People with ideas to create a business start off with a business plan.
If life has a way of not going according to plan, so do businesses.

It's the hiccups that create the best plans, because by then you know what can go wrong. It's the mistakes that create the best operative procedures. It's the big mistakes that make you know now, that's not what to do from here onwards. Hindsight is cruelly brilliant.

Business plans like the eternal words from Geoffrey Rush's character  Capt Barbosa "More like guidelines than rules" should be viewed that way, a guideline or a direction, until the first stumbling block has occurred.
"Next year we will not........". In our case it's textile supply that has become our nemesis, our undoing.

When we first started selling slings eons ago, there was a local fabric shop that sold all the designer overflow fabrics. I would buy a roll of any fabric that I felt would make wonderful slings. Once a particular print was sold out at the markets or later on the website, there would would always be another coloured print to replace it, freshly bought from my favourite fabric store. It was an incredibly easy process; more slings sold, the more fabric bought. Then Lucille was diagnosed with cancer, her daughters took over the running of the shop. The fabrics they chose became less and less suitable, I had to start looking elsewhere to make up the shortfall. I came across United Textiles, their range was orgasmic to my senses. That went well for around 2 years, and by this stage we started to get stockists, so there had to be some colours that were continual for set period of time.
A letter came in the mail that Tom who owned United Textiles had also developed cancer, sold the business to Hills Textiles. After a year, they changed their core line of woven textiles, venturing into stretch, silks etc. This was not on the business plan, so once again we were on the hunt.
Now supplying corporate businesses, we secured a range with a long established textile company from Melbourne. With a secured preordered range, we printed catalogue books for our stockists. The first 3 months our core range arrived on time, so orders where sent on time. The fourth month, the delivery day had come and gone, no fabrics. Orders coming for what we didn't have in stock. Phone call to the company proved our worst fears, there was an expected delay of delivery of more than 3 months. Shite, shite and more shite.
The word unreliable was used quite a few times when stores ordered colours we couldn't supply. We lost a few clients along the way. A new section was added for next years business plan; damage control on the "out of stockers", a 12 month prepared forward order schedule doesn't guarantee one the supply.

It's amazing what sales reps will promise you. "We can organise that, we can do that, it's our core item we have that in stock all the time, we prefer forward ordering systems..........blah blah blah!!!" What the problem is the lack of communication inside big companies. The sales reps don't talk to the order reps and the order reps don't talk to the clients.
Logically if a client or few, gives you a list of monthly requirements for a whole 12 months with at least 3 months prior notice of commencement, a guaranteed sale, income etc, it shouldn't be that hard.

That estimated 3 month delay turned out to be longer, very much longer. After another 3 months of ringing "Is it here yet?" we gave up. In the meantime we luckily we found a small supplier offering great new fabric range to re woo angry clients. This wonderful company is today our main supplier, never late, ever.
8 months after the debacle, I got a phone call from the former company. All cheery, chirpy and with excitement the order clerk tells me that the fabric has arrived, all 8 months worth. "When would you like delivery?"
"Oh, immediately!" with sarcasm that quickly turned into 'sarchasim' when she didn't understand my tone.
I helped her out; I told her to deliver it to a place in her body where the sun don't shine!.

That delay must have angered more people than ourselves, some months later, the former company contacted me negotiating a deal that would see us buy the entire shipment at 80% discount. They had lost distribution rights for a lot of the textile designers.

With the new company that now acts as distributors, now far more savvy, we imposed terms and conditions. If a delivery is late without prior notice or consent, we take 30% of the price as penalty. Works a treat, as so far each month the order has arrived on time.

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