Even if you’re not in the manufacturing business, it’s likely you’ve experienced the economic effects of the COVID-19 pandemic: stores are out of stock on many basic items, delivery estimates for online orders are longer than expected, and there’s absolutely nothing you can do about it except to wait patiently.

Manufacturing industries around the world have become keenly aware of the fragility of supply chains. Usually, larger companies can pivot relatively easily to accommodate a disruption in supply: they might open a new factory, relocate a production line to a more accessible location or change freight carriers to ensure delivery and to keep costs down. If these options are not available, or if there are no creative solutions or if your company simply can’t do any of those things then the whole chain breaks down.

One critical link in many supply chains is freight. Ocean freight, typically the most economical means of moving goods from overseas, has almost tripled in cost since March of 2020 due to massive increases in demand. Air freight costs and shipping rates are experiencing even larger increases. These spikes could be the result of overseas factories “catching up” after plant closures this summer or they could be the result of increased demand for new products. Either way, the end result is the same: serious delays for manufacturers all over North America (And likely the rest of the world, but for this article we’re going to be a little selfish and focus on North America).

While almost all of our suppliers’ shipments seem to be delayed or affected in some way by overseas freight, we have also noted a slowdown in North American production as COVID outbreaks affect manufacturing facilities in North America. Supply chains everywhere are being disrupted, and there’s no easy way to mitigate the effects of these disruptions.

Buffering Inventory

One of the keys to managing severe delays is to try to create a buffer of inventory so that you can keep your production lines moving. This is much easier said than done, however, unless your company has enough capital to invest in large amounts of inventory up front. It’s also important to consider your suppliers’ ability to produce any extra material/products in the middle of a pandemic. It may, in fact, be too late to order extra inventory because it, too, will be delayed.

Another obvious question is how much inventory will you need? How far into the future do you anticipate these delays will continue? That depends on how long you anticipate the pandemic to last, and no one really knows.

Purchase Pattern Adjustments

One way that we’ve been able to help our customers through these tough times is by understanding what their purchasing patterns are and trying to anticipate future orders as much as possible. Another method of ensuring a more even flow of inventory is to place a “blanket order” with multiple scheduled deliveries for up to 12 months in the future. In these cases, we typically ensure at least 2-3 months’ of inventory in stock, so it’s ready when you are for timely delivery. We try to smooth out the delays so that you and your customers aren’t waiting too long.

If you know what your annual (or semi-annual, even quarterly) usage is for a particular item, and if you’re comfortable with making a commitment to buy that much, then blanket orders might be the thing for you. This reduces the risk of late shipments, but also might qualify for some higher volume discounts! It also smooths out cash flow, because you don’t have to pay for the whole order up front, only as you take the scheduled releases of your order.

If you’re interested in learning more about how we can help make your purchasing easier, use our contact form or call us today at 1-800-318-1119. We’re here to help!