It’s no secret that the supply chain is disrupting industries across the board, supplement brands included. Many supplement brands are interested to find creative solutions around inefficient inventory management, long lead times, and material shortages. This constant struggle to keep their products available on the market has not only impacted business owners but also consumers. As a matter of fact, 6 out of 10 Americans have been unable to buy a specific product due to the supply chain complications that started with the pandemic.
The assurance of your brand’s future goes beyond quality. Smart brands are currently trying to find ways to forecast and predict supply chain disruptions while improving their inventory management processes. To help you navigate this complex landscape better, here are the key strategies that can help you stay ahead of your competitors.
The Current Supply Chain Landscape
A supply chain disruption is a breakdown in the usual flow in which companies obtain materials to create their goods. It goes hand in hand with the availability of a company’s products to consumers. Most brands and customers have experienced the current supply disruption in one form or another, but what exactly is causing it?
The main drivers of the supply chain disruption:
- The COVID-19 pandemic has led overall costs to increase due to backlogging, labor shortages, and high gas prices.
- The labor shortage is leaving many companies unable to meet the demand.
- The current war in Ukraine is also aggravating the supply chain.
Supplement brands need a plan that outlines their supply chain and how to navigate them. Product forecasting is essential to achieving this plan. It allows companies to optimize their product launch despite the supply chain disruption by referencing data from similar products, minimizing risks, and preserving profit margins. Here are 4 ways to do so.
1. Forecast Sales Volumes
One of the most important aspects to stay ahead of the curve is forecasting demand through market research on the category of products you sell or plan to sell. In other words, your brand should look into your current and upcoming product selection to determine which products are doing well and which products aren’t.
Collect historical sales data, current sales data from competitors, marketing data, forecasts on risks, and forecasts on launch dates. Doing so will enable your brand to optimize its product launch by understanding the patterns of each product, the current state of the market, which platforms to sell on, and the creation of action plans to stay ahead of any uncertainty. Make sure to reference a variety of data sources to estimate your initial sales volume for increased accuracy. By doing thorough research, your brand will be able to predict product demand and meet your goals at a better rate.
2. Reevaluate Your Raw Material Suppliers
Your raw material suppliers will play an essential role to ensure you can meet your quality standards and planned dates. If you are not having clear and transparent communication with them, it may be time to find a new partner. It is important for you to regularly assess and evaluate your current suppliers to make sure that the services provided are up to par with your expectations and vision. This will not only ensure that your partner will be able to meet your demands but also that your business can continue to operate at maximum efficiency.
During this process of reevaluation, it is critical to realign your supply chains to optimize the procurement and product launch. Ask yourself: Is your current supplier doing all of the below?
- Reporting all supply chain design changes for final review and compliance
- Documenting all new materials in your bill of materials (BOM)
- Outlining all changes in the production line before distributing resources
- Carefully calculating, checking, and finalizing raw material supply capacity and lead times
If not, it may be best to find a raw material supplier that does. Make sure to ask your potential raw suppliers about all these things to see whether they can fully support you during these times.
3. Partner with a Contract Manufacturer
Being able to accurately gauge your manufacturing capacity is a vital step for any business that intends to stay in the market. Otherwise, you run the risk of starting operations and realizing too late that your brand isn’t equipped to handle your production output in-house. Being able to bring your products to life is essential to establishing a brand, but it’s also important to have a realistic approach to doing so.
Partnering with a contract manufacturer allows you to bring your products to life without requiring you to eat costs, hire new workers, purchase new equipment, or set up a new production process on your own. The right partner will provide you access to their existing infrastructure designed to offer practical and efficient solutions to product development. When looking for a contract manufacturer that best suits your business, make sure to check whether they can create short and long-term plans to determine capacity utilization, understand the requirements of any current and new product, carry out test runs, comply with packaging, storage, and transportation requirements, and have the proper certifications to bring your product to market.
4. Determine How to Distribute Products
Proper distribution planning is needed to minimize both your inventory cost and time consumption throughout the supply chain. This helps ensure you are constantly preserving your profit margin. In other words, you need to make sure your products are distributed in a fast and efficient way that saves you money, which makes your products more profitable in the long run. Currently, many brands keep inventory in their main warehouses until demand calls for distribution. This is a slow and inefficient process that keeps you from utilizing your resources at their maximum capacity.
To increase efficiency and reduce unnecessary expenses, it is a good idea to look into dropshipping and 3PL options. With dropshipping, businesses can circumvent the need to keep inventory within their factory. Instead, they can take advantage of a dropshipping warehouse that delivers orders directly and on time, simplifying the overall process. 3PL partners are fulfillment partners that can help businesses with the complicated logistics of distribution on both brick-and-mortar and online platforms. Partnering with a 3PL will ensure that your brand can offer excellent service with every sale.
Proper forecasting and inventory management processes are essential to your success. Supplement brands that can properly research, predict, and prepare for supply chain disruptions will be able to stay productive during times of uncertainty and gain more market share. Paragon Laboratories has all the abilities to bring your products to life cost-effectively and efficiently. We can help you throughout the supply chain disruptions through our state-of-the-art laboratory, equipment, and processes. Contact us for more information today.