the spreading coronavirus holds the world in its grip
the impact of the corona virus on the logistics chain
The coronavirus: a local incident in Asia that has grown into an event with major consequences for the entire world. The virus spreads like a whirlwind across cities, countries and different continents and has a huge impact on the global supply chain of industry, retail and logistics.
What is the impact of the virus, how do you keep your head above water as an entrepreneur and what can you do to minimize the risks of stock shortages?
THE POWER OF CHINA
The corona virus reveals the enormous dependence on China. Never before have companies felt China's influence as strongly as it is today. And that is not surprising, the country accounts for 28% of global industrial production. Dutch companies import 40 billion euros from China alone, which is equal to 9% of total imports. Now that Chinese production has been reduced sharply recently due to less capacity due to a shortage of personnel, the supply of goods is lower than ever, causing a drastic disruption in the delivery of transport and goods.
The stagnation of the supply of products from China has a huge impact on the production processes and stocks of companies. Especially companies that depend on product deliveries from China are going through an uncertain period and are most likely to experience delivery problems. What do you do as entrepreneurs when you expect your stocks to run out? Online retailers face a diabolical dilemma: putting the brakes on sales or continuing to push out as many products as possible with the risk of disappointing future customers?
prevention is better than cure
Many companies and webshops have to anticipate the reduced production due to the coronavirus and are forced to save their scarce inventory to avoid availability problems. Coolblue, the second largest online store in the Netherlands, has taken a drastic decision to dampen their sales to avoid stock shortages. For example, they have completely closed their marketing channels and increased the prices of their products. Webshop fonQ also acknowledges to have delivery problems and puts its marketing activities on the back burner. They view which products they want to actively promote and which ones they don't. Blokker, Hema and Action also anticipate problems in their stock.
Stay in the game
The coronavirus has put logistics at risk. Despite the impact of the virus on the global logistics sector, increased rates and lower capacity, there is still light at the end of the tunnel. With the right strategy, you can keep the supply chain in your company moving and continue to execute the orders. Read some tips below!
communication is key
Communication is often the key to success. To maneuver through all this uncertainty, it is essential to inform all parties regularly and properly. Talk to your suppliers early about changed production requirements or expected delays and keep your customers proactively informed of possible issues such as delays. When you keep everyone involved and come up with smart solutions, you have already won half the battle.
spread your purchases over several countries
Spread the inventory risk to avoid availability issues. Try to buy your items in multiple places around the world or buy similar items. Book production orders well in advance to avoid delays and manage your inventory management smartly by reviewing last month's incoming orders and adjusting your delivery accordingly. By reducing the numbers that you have produced at one time, you discover many times faster whether your manufacturer can supply it. Dare to think in alternatives and reduce the chance that you will be disappointed by the painful message 'this item is currently out of stock'.
good transport preparation is half the battle
It's not always easy, but if you want to get out of this unscathed, plan carefully over the next few months. In case of urgent stock shortages, book an Express service or air freight for the delivery of your shipments. Please note, sometimes one carrier delivers from a certain city and the other does not. Spreading your transport over different carriers and transport solutions is a crucial player in this. The last thing you want is that the entire stock comes to rest somewhere during transport.
corona fear: forward with full fear
The fear of the spread of the coronavirus has gripped the world. As a result, there is a good chance that many consumers will order even more purchases safely behind their trusted laptop in the near future, which means that home delivery is likely to explode. In combination with the expected longer delivery times due to stock problems, it is now even more important to organize your shipping process efficiently.
Do you not want to take any risks and temper the fear of corona in your company? Link your webshop, marketplace, CRM, ERP or WMS then in a few simple steps to our network of more than 300 national and international carriers and couriers. This means you always have a seamless solution at your fingertips to ensure that the delivery machine for your shipments runs smoothly. Feel free to contact us and ask for the possibilities.