VIEWPOINT
HOW CAN MERCHANTS NAVIGATE SUPPLY SHORTAGES?
The outlook for growth in the sector remains positive for the remainder of the year and into 202, though supply issues remain a damper, says Ed Bradley of Virtualstock
ACCORDING TO THE latest CBI industrial trends survey, demand is rising rapidly with new orders increasing at their fastest pace since 1974. Responding to this, manufacturers are hiring more staff and are planning further investment in plant and machinery. Whilst they are bullish about output growth in the third quarter of this year, some have raised concerns about the availability of raw materials they need for their products.
It is feared that growth maybe constrained by the lack of key building materials including products such as timber and cement. Building materials have already risen by between 10 per cent and 15 per cent in price this year, with timber prices up by as much as 100 per cent, according to the Builders Merchants Federation. John Newcomb, its chief executive, said that in the past couple of weeks the industry had started to report some residential projects being cancelled or deferred because material price rises had made them unviable. Faced with these supply challenges to help them meet their valued customers demand, builders’ merchants should consider extending their existing direct to site offering by looking to dropship suppliers to help them fulfil demand and breach supply gaps.
Increasing the merchants direct to site sales with dropship Building on their existing direct to site offerings, the dropship model enables merchants to instantly provide an extended range of products to their customers. It also allows suppliers the opportunity to grow their business with their merchants by delivering their products straight to
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the merchants customers, without the merchant having to hold the stock in their own branches. This means that merchants can extend the product ranges they can offer, enter into new product categories and increase their sales without having to take on the risk and working capital requirements of stocking these products in their own branches.
Whilst dropship can be used by merchants as a short-term way to ensure continuity of supply, it can equally be viewed as a longer term opportunity to remain competitive by offering customers more product ranges. By offering more product choice, merchants can meet their customers’ needs and grow their businesses with them.
Improving the customer’s experience In this difficult environment, it is important that merchants ensure their supply chains are working as effectively as possible, and that orders are being fulfilled in the most efficient way, which can be helped with dropship technology platforms.
Using this technology to provide another way (or channel) to interact with your customers, requires merchants to have complete visibility of their supplier’s operations. One of the key challenges for merchants is that significant time and cost is incurred when working with multiple suppliers and the multiple ways they communicate between each other, as well as the manual administration that goes with it. As merchants know, these systems, if not run efficiently, can impact both the timeliness and cost of the supply chain as well as the quality of the customer’s experience. The right dropship technology
platforms can solve these issues. Virtualstock’s platform, The EDGE, gives merchants the ability to bring together and consolidate the channels between different dropship suppliers onto one platform and get a single view of all their supplier’s and inventory activity in one place using a dashboard.
This platform enables suppliers, the merchant’s branches and distribution centres to provide regular stock level updates, so that merchants always have up to date information on product availability. It also allows branch sales and operations teams to have visibility over orders including status and delivery times to ensure customers are kept informed of when their products will be delivered to their jobs.
Previously, when merchants didn’t have visibility over stock levels and suppliers’ availability, and their computer (ERP) systems, showed the products as out of stock, many would have to stop selling those products or withdraw those lines altogether. However, by having the level of visibility over stock levels by using both the merchants ERP system and the suppliers availability provided by The EDGE platform, it knows which products are available to sell at any given time.
Put simply, an efficient dropship technology platform helps merchants improve the customer experience by delivering orders on time and in full, thereby reducing the number of ‘where is my order calls’.
Enhancing supplier performance By using the right dropship technology platforms merchants can also enhance their suppliers’
The latest CBI industrial trends survey, demand
is rising rapidly with new orders increasing at their fastest pace since 1974
own performance and further develop their partnerships with them. On The EDGE, branch sales and operations teams can view the status of an order and its delivery and be notified when suppliers perform below service level agreements, or when their carriers fail to deliver.
The EDGE can help prepare automated KPIs on suppliers’ performance, helping merchants to get the information required much faster to better manage their supplier relationships. This helps both suppliers and merchants by not having to provide the information manually. As supply shortages don’t appear to be easing in the near future, it is important that merchants continue to be innovative in order to deal with these challenges and be able to serve their customers. Turning to dropship suppliers and harnessing the right dropship technology platforms such as The EDGE, by Virtualstock, who work with a number of merchants, can certainly help merchants to mitigate these pressures. BMJ
www.buildersmerchantsjournal.net October 2021
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