Supply chain solutions: How Storm in a D Cup is balancing stock, staff and service
At a glance
Here’s a snapshot of the advice from our interviewees:
- Supply chain uncertainty means businesses need to think very differently about how they operate.
- With increased interruption on the horizon, Storm in a D Cup founder Esther Labi is changing the way she stocks her lingerie and swimwear business – albeit with significant caution.
- Businesses can look to a more medium-long term plan for ‘working with Covid’ as opposed to reacting to global changes.
- Increased staff shortages are going to be another challenge retailers need to plan for during 2022.
When lockdowns wiped out face-to-face selling channels overnight, retail and consumer goods businesses responded with agility and called on their resilience, finding alternate routes to market, fast. Consumers responded by taking up ecommerce. Delivery networks multiplied. Australian businesses kept on keeping on.
As long as they could still get hold of stock – easier said than done.
Global supply chains have been significantly impacted by the pandemic, with worker shortages due to isolation requirements throughout the whole supply chain creating a significant backlog, even before Australia’s post-Christmas / January 2021 surge in COVID cases. To say it’s a challenge is an understatement.
“Manufacturers couldn’t complete the manufacturing, they couldn’t get the containers to transport the goods, there weren’t enough ships – there weren’t even enough pallets as pallet production had been impacted too,” says Jam Pathirana, CEO of B dynamic Group, which works with a number of companies across Australia, including Dymocks, Aldi and Costco, on supply chain, logistics and distribution.
“Pre-pandemic, we were receiving 15 to 20 containers per day for some businesses, and then suddenly we were receiving two or three,” Jam says.
“In terms of what has been affected it’s quite general – everyone across the board is impacted. All of our customers have struggled to receive stock. Eighty per cent of the goods we receive and manage comes from China, while a lot of Aldi’s products come from Germany, but all products, all regions were affected.”
No more ‘just-in-time’ supply chain
Retailers relying on the timely arrival of stock have faced significant problems.
“Our manufacturers are facing delays in producing the lingerie and swimwear that we sell,” says Esther Labi, Founder and Owner of lingerie and swimwear retailer Storm in a D Cup, which has a store in Woollahra in Sydney’s eastern suburbs, and a significant online presence in Australia, New Zealand, Singapore, Canada and the US. “Then we’re getting delays in shipments, and of course the delays in actually getting orders out to customers – things are delayed from end to end.”
To mitigate some of the impact, Esther needed bigger deliveries to try to have enough stock – a challenge when you offer more than 7,000 products.
“Some of our manufacturers have been more affected than others,” she says. “For example, products coming from the US have been reliable, but anything from France has been really tricky.”
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During the earlier lockdowns, Storm in a D Cup enjoyed increased sales as people bought online – but that wasn’t necessarily a sign of things to come.
“Sales increased by something like 300%, but then at the end of the second lockdown suddenly sales dropped by 50%, and we weren’t prepared for it. So we did encounter cash flow problems. I’ve had to buy in more stock because of all of these shipping delays, and pay for extra storage locally, but we’ve got to be very, very cautious,” says Esther.
“While I am buying more stock, we’re not just buying everything – we’ve got to make sure we’re only buying SKUs that our customers are buying on a regular basis.”
Making supply chain plans for ‘working with COVID’
Retaining a long-term strategic view and adding the flexibility of short-term plans have, over the past two years, helped businesses react to the impact of the pandemic and manage uncertainty.
Now, however, medium-to-long term plans need to recognise that supply chain disruption is likely to continue for some time, as are staff shortages, with increasing case numbers and changing isolation requirements. Supply chain insider Jam sees an opportunity for small businesses.
“We’re a SME business, and the beauty of being a small business is having the ability to innovate and think outside the box – it’s a lot easier to do than it is for a large organisation,” says Jam. “It’s an opportunity to think about different product lines, look at where you’re getting those products from, how you’re getting them to customers, and how you diversify that.”
For Storm in a D Cup, the long-term view is all about having the right levels of stock – recognising that the ‘right’ level is higher than it would have been three years ago, while being mindful of the ever-changing fashion trends and customer demands. It’s a fine balance.
“You can scrutinise sales and spend thousands of dollars on extra stock trying to minimise delays, but invariably when you think ‘oh, this has been selling well, I’m going to order more of that in black’, all of a sudden everyone wants red or nude,” Esther says. “So that’s a real challenge.
“Also, the majority of our manufacturers have put their prices up from January, as all of their costs are presumably increasing, and they have staff challenges they need to cover, and that has a knock-on effect, too.”
Esther’s tips for supply chain, stock, staff and delivery
As retailers across the country make plans to deal with a volatile and unpredictable supply chain, Esther offers her advice from 16 years of Storm In a D Cup experience.
- “Improve your stock levels, but do it with caution.”
- “Make sure you have enough staff available to fulfil orders – we’re taking on more casual staff to cover every eventuality, but that comes with additional recruitment and training costs.”
- “Always look for quicker and more efficient ways of delivering goods.”
The coming 12 months are going to be a challenge for retailers – and securing your supply chain, getting your stock levels right and building flexibility into your team are the first hurdles to overcome.
Need flexible access to funds to help balance stock and cash flow? Speak with one of our small business lending specialists.
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