Fantastic Furniture’s supply chain GM talks COVID-19
There has been much speculation and sensation surrounding global supply chains in the wake of jarring adjustments in consumer behaviour and demands.
But what’s really going on inside the supply chains that are attempting to pivot to meet the market?
According to Abdul Jaafar, General Manager Supply Chain & Quality Assurance at Fantastic Furniture, while we’re getting there, we aren’t quite over the “COVID 19 hump”. The supply chain is still reacting at a rapid pace. The pandemic has shone a light on both its importance and some shortcomings.
The following are excerpts from a conversation between Abdul and Rob O’Byrne, founder and CEO of Logistics Bureau in the second of the Supply Chain Pandemic Response Discussions from CeMAT Australia.
Here is Abdul’s take on …
The great switch to an online model
“What I really love about Australia is how you’ve seen so many businesses react and having to close their stores – Kmart is a classic example; they’re looking at turning a few stores into mini fulfilment centres. While they aren’t open for trade they are operating as a warehouse.”
“Surprisingly, while people haven’t been able to travel for holidays, it looks like they’re still looking for ways to spend their money. And why not? If you can’t go on holidays, do a bit of DIY at home. We definitely haven’t seen a lull in demand from customers and we have to be able to fulfill the increase in orders.”
“If you don’t reassess where you buy products from post-Coronavirus, you’ll definitely have a lot to answer for – there’s a need to open your lens a little more to see what’s going on. We’ve shifted somewhat towards Vietnam, Malaysia, Indonesia for example. You need to also bear in mind the shipping lines – they seem to be the forgotten parties in all of this and how much they’ve been hurt in the process with circa 35 percent drop in demand. That needs to play into your sourcing strategy too. It’s not just where do I buy my product from, it’s how does that product come to me. Then the next step is asking ‘what can I produce locally? How can I make it viable?’ We are big advocates of buying locally – we source our mattresses and lounges locally.”
“It’s compressed and is now a daily discussion between the buying and the inventory team. What’s important for customers today isn’t going to be important for customers tomorrow. It’s important to get close to the customer and try to understand what tomorrow is going to look like. Anyone that’s doing traditional monthly meetings will definitely be feeling it now.”
“I think if I had a big bag of money I would invest in inventory and systems alike – those that allow you to be as agile as some companies are fortunate to be. I think we’ve all underestimated the importance of the right planning tool and the right planning and inventory team.”
“Your priorities as a business should remain true – whether it’s a system or a process or a tool, it’s a matter of asking yourself if it’s a priority now and it wasn’t before, why?”
The supply chain as a profession
“I would be surprised if people didn’t now consider supply chain as the most important part of business. Look at how Scott Morrison is hiring Michael Byrne from Toll to take on this supply chain piece for Australia to get importing and exporting happening again. I would love to see more people wanting to join the industry.”
Australia’s transport industry
“If you look back several years ago there were a lot of people losing their jobs as people started to import goods. There was a whole lot of drivers selling their trucks, losing jobs because the demand for driving wasn’t there. Now all of a sudden, the requirement for trucks has gone through the roof. We took for granted our truck drivers. Australia was always great at transport, but we lost our way a little bit.”
You can view this conversation in its entirety as Abdul discusses these topics in greater detail as well as covering cost increases, skills, the 3 key lessons he has learned from the pandemic and more.