During 2021, the pandemic continued to pose problems in the supply chain – compounded by issues such as the Suez Canal obstruction – and companies worldwide suffered delays in fulfilling orders. COO Martijn Bonte, Region Commercial Director Reinier Slöetjes and Team Manager Operational Stock UK John Muir explain how increased cross-functional collaboration helped Kramp fare better than many.
“We have been living with COVID-19 disruptions for almost two years now. Where in 2020 the main challenges were in learning how to keep our operations running – keeping people safe, managing disruptions with distribution companies and so on – really the main challenge in 2021 was scarcity of materials,” says Martijn. “We had mitigated the risks associated with COVID-19 very well and had a very good year, selling a lot of stock. The problem is, you can only sell stock once! So as COVID-19 continued, I’m really happy that we had worked with our suppliers to restock to the maximum extent, which meant we were well stocked going into 2021. Through the year, though, we experienced high demand from our customers, due to our relatively high stock availability, among other reasons. We ordered a lot to replenish, but it was impossible to get hold of everything we needed. As a result, our stocks were not always at the level where our customers usually expect us to be. This is a challenge that will continue in 2022.”
John agrees: “Product availability was certainly the biggest challenge from my perspective. You can do all the preparation you like, but if the supplier doesn’t deliver, then it becomes a big issue.”
“It makes it difficult to keep our promise ‘It’s that easy’ for our customers or for our employees,” says Reinier. “It has not been an easy year. We had increasing amounts of customer demand but reduced product availability. We are lucky that farmers kept farming and, when they needed parts, that dealers did their best to keep them farming. Machine manufacturers were faced with increased orders, but their own supply chain had difficulty getting hold of materials. Our distribution partners struggled to keep up their excellent performance, too; shortages of staff, bigger volumes to cope with, and overall COVID-19 restrictions made it harder for our partners and for us internally.”
“We were confronted with more back orders than we like to have,” says Reinier, “and a lower reliability of our delivery promises. What we heard from dealers was that not knowing is the worst part – knowing and information is key. And we really had a challenge getting the information for our dealers.”
“They understand the problems, though,” says Martijn. “But if they can’t have something immediately, they want reliable information about when it will come. It is ok if it’s three weeks from now, if we can tell them now. However, this was the hard part throughout 2021 as we also didn’t have reliable information due to the unpredictability of our inbound shipments from our suppliers. There was also an impact on prices; scarcity drives up prices of the products we buy, and we have seen container shipments from Asia become multiple times more expensive than before COVID-19. Our customers also feel that in increased prices, unfortunately.”
“In stock management, we knew that we had items that we couldn’t source,” John adds. “But we didn’t know the root cause of why we couldn’t get them at particular times. Of course, in any year a few suppliers will have problems, but we were not used to seeing hundreds of suppliers with issues. To combat this, we had to step back and look at the data.”