BUSINESS INSIGHT: SUPPLY CHAINS SUPPLY CHAIN:


WHY SUPPLIERS NEED TO BE PROACTIVE, NOT JUST REACTIVE


Mark Moseley, Sales & Marketing Manager at Handy, one of the UK’s largest independent garden machinery wholesale distributors, supplying specialist dealers, large national retailers, garden centres and mail order companies, discusses the impact that the Covid pandemic had on supply chains and the best way to mitigate risk in future.


I n 2020 we saw


garden retailers shut their doors to the public in an unprecedented and wholly unpredicted


UK wide lockdown as the Covid pandemic took hold. Suppliers cancelled orders and manufacturers stopped manufacturing. Yet the industry was caught out, with demand for garden equipment soaring in the heat wave that swept the UK in May 2020 outstripping supply. Even our own well-stocked warehouse was emptied in a single month.


The industry played catch up for over a year, but manufacturers weren’t able to produce equipment fast enough. Furthermore, the majority of that equipment is produced in China, but ships were unavailable coupled with a server shortage of container availability so the products weren’t making it to our shores in time and those that did saw a huge increase in shipping costs. Lawnmowers, which were the first to sell out, took over 12 months to catch up to demand. Faced with such lengthy delays and stock arriving out of season and therefore unsellable, a number of companies sadly were unable to weather the storm.


Industry response The industry’s response has, by and large, been to rely on retailers to increase their warehousing capacity to hold more stock. But we believe this isn’t the right approach. It’s not the job of the retailer to do this. The onus should be on suppliers. It is our opinion that many suppliers simply aren’t stepping up to the challenges faced within the industry and are carrying on in business as usual fashion.


Why do I say this? Well, Covid may have been a bolt from the blue, but supply chain issues were


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already presenting themselves several years before, both on the back of Brexit and also as a result of climate change initiatives which were leading to Chinese factories operating at 50% capacity. At Handy we could see the writing on the wall and had already implemented key changes. The pandemic just accelerated these plans. Suppliers need to directly address supply chain issues, rather than leave retailers to carry the can. Firstly, suppliers need to increase their stock holdings and storage capacity. At Handy, we have made an extra £1m stock investment along with a significant expansion of our warehousing which has seen two extensions completed and a third, due for completion this year, increasing capacity by a further 30%. Secondly, suppliers must ensure stock arrives in plenty of time. Pre-Covid, stock would generally arrive in January / February, but with the ongoing delays and issues we are all facing, November would be a safer option. Why haven’t garden machinery suppliers reacted accordingly? Well, in some cases - especially with smaller companies - working so far in advance puts a huge strain on cash flow and the risk of overtrading


prevents these companies making that investment.


from Also, the


cost of building and energy prices have gone through the roof, so new buildings and extensions are a serious investment. In the case of larger brands, however, it often comes down to a long, corporate decision making process, stifling their ability to react swiftly to the changing geopolitical landscape we find ourselves in. One thing is for sure though: the industry needs to be more forward thinking and ensure retailers are not left with bare shelves. Thankfully, Handy is a family run business, enabling us to move relatively speedily as the decision making process is quick with less sign off levels and red tape.


Reducing impact For retailers looking to reduce the impact of supply chain issues, they need to scrutinise their suppliers’ ability to deliver the goods, so to speak. We recommend retailers asses their suppliers’ ability to do this by examining the following aspects of their business:


Product availability - ideally the


supplier should be able to show at least 90% product availability. We are seeing some suppliers fall to as low as 50%. Anything below 60%


really is untenable as, whilst you may find your first order is fulfilled, any further orders may well have gaping holes in them or be entirely absent. At Handy, we currently are operating at 95% availability but are always looking to improve on that figure. Depth of range - choice is key! At handy we stock over 900 different garden machinery equipment products


to meet different price


points, different garden sizes and types and, of course, gardeners with varying levels of experience. Linking back to product availability though, there’s no point in offering a wide range unless it’s actually available for sale! For suppliers with small ranges this is easy, but less so for larger companies, so check that 90% plus availability covers the full range not just the best sellers.


Straightforward business T&Cs


- Why make life difficult when it doesn’t need to be? Don’t we all want to work with companies that are easy to do business with? Avoid suppliers with high minimum orders or tortuous T&Cs and ensure next day delivery is available. Fast access to spare parts - This is a personal pain point for me as it drives me to distraction when you have a product but are unable to use it as spares are not stocked. And it’s not just me; it makes for a bad customer experience, who (unfairly!) lay the blame at the door of the retailer. Both small and large suppliers are guilty here; we are aware of one major brand who was unable to supply spare parts for an incredible six months. Handy has 75,000 spare part lines and we always have the basics in stock, but it’s not an easy thing to do.


Working together Manufacturers,


retailers have all experienced some incredibly


challenging


distributors and times over


recent years, and we must all work together to ensure our future is a prosperous one. However, garden machinery suppliers need to be more proactive to ensure a seamless product supply and correct the balance between supplier and retailer stock holding. If not, we are at risk of jeopardising the garden trade business, turning what is currently an impulse buy into a considered purchase, and we all know how that will affect sales. Since the company’s creation in


1938, Handy has grown to become one of the UK’s largest independent garden machinery wholesale distributors, supplying specialist dealers, large national retailers, garden centres and mail order companies. For more details, visit www.handyonline.co.uk


JUNE 2022 DIY WEEK 13


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