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Supply chain has met many challenges over the last two years. From new challenges like a global pandemic and drastic consumer demand changes to familiar challenges like capacity and retailer accountability, suppliers adapt quickly or find themselves behind.
On this episode of the Retail Supplier Podcast, we visit with Greg Forbis, Executive Vice President of Strategy and Business Development for RJW Logistics Group. Click the “play” button above to hear our entire interview with Greg. In our conversation, Greg explains what his team has observed working with Walmart suppliers over the last two years and what they’ve learned to help suppliers prepare for 2022.
RJW Quickly adapted to Retail Changes
We started our conversation by asking Greg about the last couple of years at RJW. He explained what his team experienced, learned, and then adapted to support suppliers during this critical time.
“The last year has brought lots of learning to us across many facets of the business,” he began. “What we continued to see over 2021 was volume continued to exceed the forecasted demand. Our suppliers did a phenomenal job of sharing with us what they expected demand to be, but volume continues to jump ahead of that. For our team, it meant we had to add staffing and equipment to really offset the volume. We were very fortunate to be able to do that, even at a time when we continue to see labor constraints. Carrier capacity is also a challenge for everybody, but we’ve been very fortunate to be able to increase our driver pool. In increasing our driver pool, we’ve also been able to add equipment we needed. This allowed us to take our own equipment and put it into our retail business and continue to deliver loads and really offset some of the market cost increases.”
Trends Continuing through 2022
Greg and the team at RJW stay on top of retail and supply chain trends to adapt their business and grow. They’ve been monitoring the challenges faced by retailers and consumers over the last two years. We asked Greg what trends from recent shifts in the retail landscape suppliers can expect to continue through 2022.
“The first trend not going away is what we’ve seen with consumer behaviors,” Greg begins. “They continue to change. More people are looking at e-commerce, home delivery, and online grocery. They’re changing because consumers continue to want their purchases when they want it, where they want it, and how they want it. A great example is Walmart’s home delivery. It’s just so easy to sit at your iPad or laptop, put in your order, pick your time, and it’s there!
“The second trend that’s going to stay with us is demand fluctuation,” he continues. “It will continue. Inventory management is such a key right now for our suppliers. Whether you’re a branded product or private label on the shelf, when the customer comes in to buy, you’ve got the sale. If you’re out-of-stock, the customer will look to maybe a private label or a different brand. When I want peanut butter, I want peanut butter! I may change brands to get what I want when I want it. So inventory management is really going to be key.
“Trend number three is all about retailer compliance,” Greg explains. “Retailer compliance is not going to change. Walmart launched SQEP, Sam’s Club made changes to OTIF, and we see it at other retailers where we deliver. At Kroger, Meijer, and HEB, retailer compliance continues to be at the forefront.
“Finally, you have capacity,” he says. “Capacity is going to continue to remain tight. We’re always going to be talking about driver and truck shortages. You will see pockets in markets where labor is challenging. We also continue to hear about raw materials from suppliers. Whether it’s resin for the bottle cap or corrugate for the cardboard, these continue to be challenges we’ll need to work through. All of this will be at the forefront of what we’re looking at coming into this year.”
Preparing for 2022 and Beyond
No one could have predicted the last two years for retail. The upside is it brought some key learnings for retailers and suppliers on being as prepared as possible for continuations or new challenges in the back-half of 2022. Greg wrapped up our conversation with some tips for suppliers on getting set now for a successful Back-to-School and 2022 Holiday season.
“One thing is to get ahead of your inventory production problem,” Greg advises. “If you’re thinking about Back-to-School and you have components and raw materials available, build it up now. That has led to some of the capacity crunch on the warehousing side because suppliers are trying to get so far ahead of it. But the suppliers who have done it and done it well have been very successful. Think about getting ahead of this inventory production run.
“Also, understand your actual demand,” he says. “Forecast and demand, and know how to make adjustments on the fly taking into account the seasonality coming up. Many retailers are going through modular resets, which usually brings a lift in sales. Shoppers now see new things they like. Thinking more about demand as your items go into modular resets, look at your unproductive SKUS. You’ll continue to see some SKU rationalization. Buyers and replenishment will be thinking about those slow-movers taking up space. Suppliers need to be thinking about them, too.
“The piece that I feel is absolutely critical is the supply plan,” Greg concludes. “Take inventory production, fluctuations, impacts, SKU reductions, and build out that supply plan. Think about what it looks like for raw material to manufacturing to 3PL to transportation providers to the retailer. Include the retailer! Ask your retailer, “Hey, here’s what I see. What do you see?” Then, over-communicate the plan to all those parties that are involved. What you don’t want is the raw material supplier to get a surprise because of a retailer demand, or you don’t want manufacturing to get surprised because you didn’t have enough raw material. Over-communication right now is important. The further you get ahead of it and the more frequently you talk about it, the better a fall season you’ll have and the more productivity you’re going to have.”
To learn more about RJW Logistics Group services for suppliers, visit them online.