Good Evening All,
I'm a Supply Chain & Logistics Manager in the mining industry dealing with suppliers and customers around the world.
There have been significant changes in the global supply chain over the last 2 months with daily changes to freight options, shipping schedules and stock availability.
I look forward to answering any questions you may have.
Pepperoni
A man of culture.
Beaten by 10 seconds
I see you're a man of culture as well
Beaten by 10 seconds
Have you noticed more demand from China lately?
Supposedly they have the virus under control but people don’t believe the numbers .
We're a parts supplier to the mining industry so don't export the minerals to China. We do import some materials and they are now back on track after a slight delay post Chinese New Year.
Our customers have not noticed a decrease in demand. They did take significant measures early on along with South Korea.
Personally I don't believe the numbers they are publishing either.
What has the impact been to your business with the dollar plummeting? I would think that has somewhat protected you just a smidge.
We were forecasting the dollar to be around $0.65 for the next 12 months with small fluctuations.
The significant drop last week down to $0.55 was a significant shock however the stimulus package was on the cards so a recovery was forecast. While it's brought it back up to $0.60 in the previous days there is still instability which we'll need to manage.
The majority of our customers are domestic so while we do export it isn't going to offer the benefit it would to a net exporter.
How old are you
I'm in my 40's
Sugar daddy 😝
manual or auto?
Manual … I'm not a Muppet
Tinder or grindr?
Are you that lonely that you've resorted to stalking me?
Are things going to get better or worse?
Worse … and then significantly better
There has been significant stimulus and government support around the world to keep the economy moving which is going to keep the wheels moving for a while. A shutdown is eminent though. When it is and how long it's for I can't say. The infection rate is similar to other western countries and we're currently on a similar trajectory to a number of European countries.
What we're currently experiencing will end in time. I don't believe we've seen the end of the stimulus as the shutdown will have a significant impact on all people employed in non-essential industries and those that are unable to work from home during the lock down.
The recovery I believe will be more rapid than the GFC once the lock downs are lifted. I personally think there will a large amount of investment in infrastructure with priority given to domestic companies.
What do you think the producers and supermarkets must do to restore the empty shelves?
Great Question …
I'm not a psycologist so I'm unfamiliar with the current mindset of shoppers but I believe a possible answer is through pricing.
The current limits are difficult to enforce as we've seen over the previous years with powdered milk products. Shoppers will just make multiple visits in a day.
I believe that if they use pricing correctly they can stop the current behaviour.
As an OzBargain member I'm sure you're well aware of how quickly a product can sell out when priced correctly … The opposite behaviour can be acheived when priced correctly. Pricing can both be used to the accelerate and slow the sales of stock.
I was hoping for an answer from the logistics/supply chain side of thing, what can be changed, improved, etc. A lot of people mentioned that no problem with supply/production itself.
And also from logistical point of view, why is home delivery being suspended?
Supermarkets run extremely lean. I've worked briefly in retail and we used to replenish shops up to 4 times a day from a distribution centre. There is only so much room in a store and only so much stock they can hold. The storage for stock in a Woolworths is a fraction the size of their floor space.
You need trucks to replenish the stock at the stores, forklifts to load the trucks, people to drive the forklifts and drive the trucks. There's only so much man power and vehicles available.
Christmas is a very interesting time of the year. The store I worked for did 85% of their yearly trade during December. During that month we were able to utilise transport that wasn't used in other industries as it's the holiday time of the year.
This surge in activity has occurred unexpectedly at a time of the year where additional vehicles aren't available to cope with the additional load.
Personally I'd love nothing more than to be part of a Woolies or Coles War Room working through this situation. This is a once in a lifetime opportunity and would be an amazing experience.
Regarding the home deliver … I don't know. I'm guessing it has to do with available resources and also to limit the risk of infection for it's staff. The staff are required in the store to serve the masses. If they're out doing deliveries the shelves could be left empty with stock sitting in the back. If the staff get infected the store could shut down.
@Mr Krinkle: How do they do Christmas then, if storage space is limited? Increased deliveries, or temporary storage somewhere?
During that month we were able to utilise transport that wasn't used in other industries as it's the holiday time of the year.
So I'm guessing more deliveries.
@Melencir: The deliveries are significantly increased and there are additional storage areas in shopping centres that stores can use during times of increased demand like Christmas, Mothers Day, Fathers Day etc.
@Melencir: The deliveries are significantly increased and there are additional storage areas in shopping centres that stores can use during times of increased demand like Christmas, Mothers Day, Fathers Day etc.
@Mr Krinkle: This is the best analysis I've read of this anywhere. Thanks. And it makes sense. I live next to a Woolworths Metro and their receiving area is smaller than my garage and they get about six to eight smaller trucks a day. There isn't room for the big Woolworths trucks you see going to the regular supermarket.
Xbox, PS or PC?
PS - Purely for it's ability to run as a Linux cluster
Dark, milk or white chocolate?
In what application?
Body paint
Dark … due it's longer shelf left
Blonde or brunette?
Is your company laying off employees within SCS in the near future and any luck with insurance claims especially with stock in transit?
Employment numbers are continually fluctuating in line with demand.
Can you please expand on what you mean regarding insurance claims for stock in transit?
What is the time?
Time to get a clock
What significant changes did you see in the global supply chain over the last 2 months?
There was the initial delay in factories resuming after Chinese New Year. Depending on what province your suppliers were in this delay was a couple of weeks up to current. Retailers and those dependent on China suppliers carry a buffer to cover the Chinese New Year shut down. The large snow storms in 2008 that prevented a number of migrant workers returning to work has resulted in a number of suppliers planning for the possibility of additional disruption after such a significant holiday.
Then there was the decrease in shipping traffic. Sailings are just like airline flights. They have a regular schedule which we all plan on and it was the most disrupted I've seen to date.
The rapid expansion of COVID-19 into Europe then started to disrupt the dock workers in the affected countries. This has caused significant delays in loading and unloading with shipments put onto alternative vessels requiring transshipment in somewhat volatile areas. These disruptions are now being felt out of Longbeach in the states.
To date it's all been manageable.
Now the most significant disruption is to air freight. With the recent passenger flight cancellations the cost of air freight has increased over 400% for some routes with some destinations not even available. We're needing to deliver to the nearest available airport and coordinate land transport from there further increasing our costs. The delays in delivery are increasing daily. Currently priority freight is delayed by 2 business days and economy freight is delayed by up to a week due to the decrease in air traffic.
Your answers are awfully generic.
What question do you believe I answered generically and could have been more detailed in answering?
While I am participating in this AMA voluntarily; I would like to keep myself and my employer anonymous which could result in some answers not being as detailed as I could given the environment.
Edited as I didn't reply to the original comment
Do many customers ask about the carbon footprint or recyclablity of products or are they still predominantly price driven?
Great Question
From my experience environmental responsibility is still not a top priority for customers. Environmental considerations are always taken into account when selecting new products and suppliers. We do what we can. When possible we use recycled materials for packaging or recyclable materials. Unfortunately we can't always be carbon neutral. Sometimes need strong plastics to package our goods. Sometimes we need new cardboard instead of recycled due to its rigidity. We also need to take into account our customers behaviour and how we believe our customers will dispose of our packaging. A number of considerations are made when we finalise our packing specifications and if our customers specify any unique requirements we will adhere to those.
That being said we do look after people more so than the environment. Safety is currently priority number one. Quality and availability are almost tied with safety.
On top of safety we all have ethical sourcing of materials which covers forced and slave labour as a requirement of our suppliers all the way up our supply chain.
Pricing is often dependent on the customers that you're doing business. If you're offering a consumable product then pricing is a necessary point of difference. If your product allows a customer to keep operating a 10 Million dollar piece of machinery then price is secondary.
f-ed up again
What steps do you recommend people take to protect themselves from computer viruses?
Does having a title make you feel 'important'
In terms of forecasting, what methodology do you use e.g. forecasting demand and what the exchange would be?
This question could have me talking for hours so I'll try do my best to keep it as short as possible
If you have a highly functioning sales team you will work closely together. They have a sales budget that they're working to achieve and will be able to relay the information they have about their customers and expected product purchases for the next 6 months. It doesn't need to be exact; just above or below current spending patterns.
If you have a sales team that isn't as switched on you're heavily reliant on historical data & seasonal trends where possible.
Where there isn't a sales team such as a retail environment it's up to the product/category managers to provide a forecast which could use competitor numbers or the sales history of a previously sold product.
With all of the above information you can create data models. You incorporate your lead times and come up with the optimal quantity of a product you purchase along with the frequency that you want it to arrive. 1 container a week/month, 1 pallet a week/month etc.
If everything works well you'll have the stock available for the customer with a bit of a buffer. You can delay future orders if demand slows or bring forward existing orders if demand increases. I usually have open purchase orders going out 6-12 months depending on the location of the manufacturer/supplier to ensure that they can handle our demand.
Currency is regularly reviewed and the finance team will essentially lock in a rate to ensure margins are maintained despite fluctuations in currency. This can be a benefit if the dollar drops like it has recently or work against you if the dollar increases. It does allow for accurate modeling of profit & loss which is extremely beneficial if you're heavily reliant on imports.
Hope that answered your question.
What is your favourite pizza topping?