We are well and truly heading into the Christmas trading period, which means supply chains will be stretched thin. In this email, we explore ways to manage supply and demand through the holiday months while ensuring your business has the cash flow required to survive the summer break.
You would think advances in technology and a globalised, connected world would mean enhanced supply chains. However, due to the surge in Delta variants of COVID in Asia and disruptions to global shipping, we face a delivery crunch that is now expected to last until at least 2022, posing further shocks to global supply and the world economy.
Many manufacturers are being forced into bidding wars to secure vessel space due to shortages of critical components and rising raw material and energy costs are pushing freight rates to record levels. Some exporters have therefore raised their prices or cancelled shipments altogether.
With delays expected to extend well into the holiday period, mass shipments have been mobilised globally in an attempt to meet demand. Here are some tips to minimise your reliance on supply chains and get ahead of demand:
Forecast your holiday season sales
With supply chains stretched thin, it is important to try and only order the stock that you will need. Your business doesn’t want to be caught short either, so using historical sales data is a great way to project how much you’ll require.
Chart the trajectory of your sales with the help of your historical sales data. Taking data points from various points in the past will allow you to understand your most recent seasonal variations; applying those historical insights to your most recent data may help you forecast your inventory and chart sales.
What if there is no historical data?
There are several ways you can forecast your requirements without historical sales data. Firstly, analyse your competition and their results. Then, access what historical sales data you can from your current operational period and contrast with the behaviour and actions of your competitors.
Secondly, there are forecasting software tools available that will enable you to input variables and develop a reliable forecast for Pipeline or Opportunity sales, Historical sales, and even survey forecasting software.
Finally, survey your market to understand near term demand from your existing customer base. Surveys and polls can give you solid predictions to understand what your customers are thinking about your products and their likely behaviours.
By getting your data together now, you can stay on-track, purchase stock, and take sales orders confident that you will be less impacted by supply chain issues this holiday season.
Get in touch to ask us about our Tradeline Finance and Selective Invoice Finance options for further assistance. We’d be more than happy to help you navigate this tricky time with you and see your business set up for success in 2022.