Page 12 - BOSS Today Issue 51

BOSS Today #51
“We’ve lost huge amounts
of productivity in our
supply chain because of
social distancing and shift
separation.”
Steve Haworth, Group
CEO of EVO Group
“The main challenge was
linked to documents
and customs clearance
requirements, especially
on shipments from Great
Britain to the EU.”
Jo Partridge: Regional Consumer
Business Group Leader at 3M
#4 The icing on the storm when this hit. We also delayed ordering
Finally, a number of other factors added more containers, because you don’t want
the icing on this ‘perfect storm’, including to be spending $6,000 more bringing
poor winter weather hampering shipping, stuff over unless you absolutely have to.
price inflation on Chinese-made products But, of course, you do have to supply your
because of raw material cost increases, customers, so you reach a point where you
courier companies operating beyond full have to bring it in and take the hit.”
capacity and – as Haworth explains – Where manufacturer prices have gone
declining productivity in all parts of the up significantly, distributors have generally
distribution chain because of COVID-19 had to pass these on to their customers,
restrictions: “We’ve lost huge amounts of at least temporarily, as Nick Wilson, CFO
productivity in our supply chain because of Euroffice, explains: “Price increases have
social distancing and shift separation. For been impacting less than 5% of our range,
example, we lose between 20-30 minutes and the size of the increase depends on the
every day between shifts because we have percentage of the landed cost price that
to physically separate them. That’s a lot of is accounted for by freight costs, which in
downtime.” turn depends on the size and value of the
product. So, high volume, relatively cheap
Counting the cost products have been hit with 40% price
All of these elements have meant that increases, as have products with a lot of
importing UK vendors, such as Stewart air in them, like furniture. Where we can,
Superior, were severely impacted by very
we’ve passed these on to our customers
significant cost increases: “We direct and explained that, where the market is
import most of our products from the moving, we have to move, too. Fortunately,
Far East: everything that we have on a because the majority of products affected
container is costing us more money!” by this increase are wholesaler own label
While distributors such as EVO have seen items, they are being pushed through to
millions of pounds of increase in their cost everybody. The problem has also been
base, albeit mainly on high volume, low incredibly well publicised, so it’s been very
value, white box and own label products, easy to explain the increases to end-user
as Haworth points out: “It would be fair customers.”
to say that we haven’t yet seen price
increases come through aggressively from Silver linings?
branded manufacturers. Some people have Distributors have had to think creatively
about how to deal with the product
been trying, but we have been pushing
back really hard!” shortages caused by the crisis, as Haworth
Indeed, some such manufacturers, such
as Stewart Superior, have resisted putting explains: “We’ve looked at sourcing
locally - and having a much shorter supply
prices up so far but, as Betts reveals, this chain - as an option, but for a lot of
is partly down to good planning and partly these products, that comes with a huge
due to a desire to maintain price stability: increase in price. We’re not thinking of
locally sourcing everything, but if it makes
“We generally place significant orders at
the back end of October to get through sense, then actually we would prefer to
Chinese New Year anyway, so thankfully be supporting our local economy, which
we already had extra stock on the water resonates with the ‘buy local’ message
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