Coronavirus increases demand and supply chain challenges for WellPath’s DTC business
COVID-19 has inexorably shaken up the retail world, with every aspect of the industry having to deal with new challenges. While many retailers are struggling with closed storefronts, furloughed employees and decreased sales, my company has been lucky enough to be in the unique position of having more demand for our wellness products. With higher demand, however, come new challenges of keeping up with all areas of the supply chain — everything from sourcing ingredients to production to fulfillment.
For us, specifically, it has been difficult to procure the raw materials for products. One of our main products is made from elderberry, and the global supply chain for elderberry is under extreme duress. We have seen everything slow down as we deal with export challenges and customs being overloaded. Many factories are shutting down entirely or partially. This includes not only plants that make the product but other overlooked aspects, like labels and bottles. Lastly, some fulfillment centers have been shut down because they are not deemed essential. In the case of Amazon.com, deliveries of some products have been prioritized based on perceived need, which has led to unpredictability in delivery.
With all this in mind, here’s how we’ve been able to navigate and try to stay a step ahead of the supply chain challenges we’ve faced.
First, we’ve made sure our supply chain has contingencies in place. We are operating under the assumption that every part of the supply chain is at risk, so we are making sure we have backups for supply, manufacturing and fulfillment partners.
For raw materials, I recommend planning ahead and prioritizing future inventory. If your business has enough capital to commit to meet continued demand for manufacturing and production, you should consider shoring up enough materials to produce extra inventory.
With many fulfillment centers, including Amazon’s, focusing on essential products, now is also the time to research additional distribution channels that will open up once the pandemic ends. Brands that plan ahead will be better positioned for recovery and future growth when that time comes.
DISCUSSION QUESTIONS: What do you think are the keys for consumer-direct brands and retailers to navigate supply chain challenges that have arisen with the coronavirus pandemic? What types of supply chain investments being made now do you think will pay the biggest dividends once the pandemic has passed?