Even if you’ve been living under a rock for the past few years, you’ve heard that your supply chain needs to become more resilient. Modern eCommerce businesses and their partners must respond quickly to a volatile market, needing plans already in place for when disruptions occur. And we’ve seen the most success from companies that prioritize finding a resilient distribution partner.
Today’s supply chain operates quickly, and COVID has shown us how rapidly everything can change. So, it’s time to take a few minutes and reevaluate current supply chain partners and success metrics. Here are some thoughts to help you frame what a resilient distribution partner looks like and what they bring to the table.
Response and recovery from adversity
For partnerships like those created between eCommerce companies and their supply chains, building resiliency improves your ability to react to and recover from adversity. A resilient distribution partner typically helps you make those improvements by ensuring flexibility and giving you more positions to tackle a problem after discovering it.
Proactivity is critical. Connections may break; efforts may fail. When that occurs, what do you do? How does your partner plan to make it easier to address that? During the pandemic, you likely saw significant issues on the inbound side of your operations. Did your supply chain partner help you find solutions? Did your operations team have backups in place to keep your product flowing into customers’ hands?
You should be getting support throughout your supply chain. That’s what a premier fulfillment partnership is. A resilient distribution partner will have the people and capabilities to help you find and execute potential solutions. That can mean connections with multiple parcel and LTL carriers, or even knowledge on how to look upstream. Expect them to help you adapt to issues in manufacturing or if a product is quarantined during inbound.
Look for a history of supporting clients through significant levels of adversity both on the negative side (supply chain issues, COVID, etc.) and on the positive side (growth, surprising scale, new product launches). Business moves in both directions, and you’ll need a resilient distribution partner that has the flexibility to accommodate your business’s changes — whether that means reacting to an inbound issue, increasing manufacturing output, or finding extra space when you 10x sales volume in six months.
Resilient distribution partners prioritize quality
Evaluating current partners can be problematic in the abstract. Instead, look at specific areas where you or your competitors have struggled in recent years. Find the concrete challenges and look at how you wish those had been handled or how they may have been prevented. Those can include supply chain breakdowns due to COVID, high return rates, or products damaged in transit or in warehouses. For example, did you experience loss or backlogs in a place where your partners were in control?
Highlight issues and how you were able to respond. Then, look at the response capabilities of partners and whether those reach a level that improves your chance for future success.
Start by questioning not only their capabilities but their willingness to improve and expand. It’s more than just, “Can they help?”— it’s “WILL they help?” You’ll want to ask specifics. Do they have a quality control (QC) process already in place? Do they have the floor space and workforce to assess products? What about the expertise to handle supplier issues and help you identify what to do next?
If the products aren’t in your possession and under your control, they’re in the possession of your fulfillment partners. If manufacturers inbound directly to your partner, you must trust them to protect your business and properly address any quality or data issues that arise. This understanding is an essential part of the relationship because you depend on them in many cases.
Think of past concerns so you can highlight issues and how you were able to respond. Then, look at the response capabilities of your partners and whether they reach a level that improves your chances of future success.
Partners must respond quickly when they control the flow of your goods. In eCommerce, many businesses never see the individual items before selling them to customers because of this chain of custody. If your distribution partner controls this instead, you must trust their QC efforts. A resilient supply chain is one where this partner meets and follows your inspection requirements. And their QC team works with you to proactively report issues and help you maintain the standards that your customers deserve.
Upstream and manufacturing focus
When evaluating whether you’ve got a resilient distribution partner, it can be a good time to think about manufacturing partners, too. Manufacturers want to perform well and avoid low-quality production runs or mistakes. These can harm their equipment and profitability. Poor performance here (just like anywhere else) ultimately leads to low client satisfaction and lost business.
Find a partner that wants to perform well for you because it protects their business, too.
You can build resilience from a distribution perspective by maintaining product quality to limit returns, refunds, and lost capital invested in inventory. Areas to target include the manufacturing process’s quality and shipment inspection criteria. To start, you can build quality into the process itself or enhance inspection capabilities. While inspecting can be more expensive, it is a critical way to ensure that you’re not shipping poor-quality products.
A resilient distribution partner plays a role in this by verifying inbound goods. Issues they detect should be sent upstream to see where process improvements or additional inspections can avoid future issues. This might be identifying a process change or shipment change to protect goods through efforts like temperature control or increased cushioning.
Resilient distribution partners manage expectations and exceptions
Owners and leaders often feel the pressure to address and avoid every disruption. Success rests on your shoulders, so all eyes turn to you when something goes wrong. Protecting your company and addressing uncertainty requires a direct approach. That’s why leaders like you need to work with partners to create plans to address potential issues. No one can predict everything, but you need to be able to address problems as they arise quickly and definitively and be able to communicate not only what happened but also what you’re doing to solve it.
Create a supply chain plan that mirrors the kinds of plans you create for internal leadership and processes. Work to define contingencies and workflows to avoid a barrier causing a complete breakdown. You set expectations and create pathways to manage these issues or exceptions. Much in the same way you communicate this to your executive team, share these details with partners throughout your supply chain.
Show your leads where they have control and their responsibilities. Operations leaders, for example, must track inventory, dock schedules, and shipment status. Ask them how this information is available to you and to relevant supply chain or distribution partners. How can they get this to be just a click away? How can you be set up for success if you need to step in to support in the event of a challenge? After the internal work, it’s time to turn to partners and start asking for the same level of support.
Focus on partnerships and mutual growth
Ultimately, proper resilience comes from a proactive view of the end-to-end supply chain. Your goal is to understand where there are potential failure nodes. What are the impacts of failures there? And then, what solutions can you put together in advance? That’s certainly a lot of work from an operational perspective and it requires good partnerships.
Red Stag Fulfillment aims to be a resilient distribution partner by helping our partners step back and look for points of failure. Together, we ask what could potentially break and how we would react to ensure that you always receive the same exceptional level of service despite difficult situations. That’s the plan we build out together, and it should be what you expect from any supply chain partner.