Warehouse and delays: Some reflections
In this blog post we would like to try to shine a light on how we operate as a small company that gets most of their goods from Vietnam and East Asia.
We will therefore like to talk about our warehouse strategy.
Now the emphasis on small is what makes it difficult. We have a warehouse but not a whole lot of space. This lack of space to store our products means we have to get creative 😊
So we operate after the “JIT” or “Just In Time” – Priciple.
So, what is JIT? Well, it is a principle of estimating through data when and how much you will need of certain elements so that you do not need to have “actives” lying in wait, pertaining capital from much needed operating processes.
Now what does this all mean? Well, some supply chain managers might throw more sophisticated words at you talking about “LEAN” processes. But who cares? The truth is: JIT is basically estimated guesses. How much will we need? When do we need it? How long will it take? Well, we make a qualified guess and hope to be right 😊
Usually this has worked out really well.
Since the pandemic and the growing popularity of the bicycle, our Bikezacs have also become more popular. Which, of course, we are extremely grateful for!
But it also threw our guess way off in terms of how much we needed for 2021.
Again THANK YOU ALL FOR BEING SUCH AWESOME BICYCLIST!
Of course, since we learn from our mistakes, we thought we were now better prepared. We placed a new order earlier, ordered shipping in good time and paid a lot more due to the tight situation in the market.
Then came the blockade of the Suez Canal. And even though our container is not on this ship, thank God, we are significantly affected: Since the canal was closed for full 6 days, there is now the so-called bottleneck syndrome. Like in a traffic jam of massive boats, it takes a long time until all ships can continue their journey, even if the accident site has been cleared long ago. However, the effect does not only occur at the canal, but at every subsequent port, as they only have a certain capacity and cannot unload and load all "ready" container ships at the same time.
This effect also has a downstream impact. At this point, our Bikezacs were ready produced and on the first container ship, but not yet on the final ship that would take them to Europe. We briefly considered shift to plane at the port of transshipment. But we can't justify that in terms of the carbon footprint. Moreover, there was also an increased demand for freight transport by plane and an express delivery would not have been guaranteed.
So, we decided to wait and accept the unfamiliar situation in the global shipping market.
Initially, only our Bikezac Simply Black and a few weeks later Simply Blue were sold out. But since no one could predict how long it would actually take to untangle the situation and thus more and more delays occur, our JIT strategy has meanwhile become totally obsolete.
We therefore hope for the understanding of our customers and look forward to packing 1000s of pre-orders and to customers all over Europe finally holding their Bikezacs in their hands.