Some of the world's largest shipping lines are canceling sailings, reducing speeds and taking longer, less costly routes to cut expenses as retailers deal with a glut of inventory amid the coronavirus pandemic and decreased consumer demand. Some retailers are storing excess products on slower vessels, while high-demand businesses such as Walmart and Amazon are hurt by the delays.
Fastenal's average daily sales rose by 14.8% year over year in May, sparked by a 136.3% spike in sales of safety gear due to the coronavirus pandemic. Manufacturing and nonresidential construction sales were down, and the company cut a net 554 positions in May.
Distributors facing price increases from manufacturers can either charge customers more, reduce costs or reduce profit, writes Mike Marks of the Indian River Consulting Group. Distributors that have good, trusting relationships with suppliers will be able to navigate the resulting conversations and avoid losing business, he writes.
Labor-management systems can help supply chain operations optimize employees, identify productivity gaps and manage employee placement across warehouses, writes Bridget McCrea. Such technology can also keep workers more engaged through gamification.
Distributors that want to improve their e-commerce sales should switch to active platforms that use artificial intelligence to optimize search results, encourage upsells and cross-sells, and promote private-label and overstocked products, writes Proton.ai founder Benj Cohen.
When private equity firms acquire distributors, they typically focus on leadership accountability, profitability and growth, says former Grainger executive John Schweig, who is now at PE firm Snow Phipps. "Savvy PE firms will invest in a handful of growth opportunities at the outset, since the early EBITDA hit is far less important than making sure that one or more initiatives pays off in future growth," he says.
Bedford Industries was able to switch from making twist ties to making face shields in response to pandemic-induced demand, and that also led to creating a website for online sales. By contrast, pandemic response was basically a matter of staying the course for Queen Screw, which was deemed an essential business for the precision-machined plastic components it makes for several industries.
There's no choice but to participate in the struggle for racial equality, as for too many years Americans "have stood by and allowed the worst of us to go unchecked," CEO Craig Arnold wrote in a letter to employees. "This is the time for us to come together, to truly listen and learn from one another, and to embrace this moment to become the nation we were meant to be," he wrote.
Supply chain planning that's typically based on historical data has proved inadequate in the rapidly changing environment of the coronavirus pandemic, according to this McKinsey analysis. One response by supply chains has to embrace control towers, which can be a first step toward autonomous planning that taps into forward-looking external data.
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