Are ‘just in time’ supply chains a thing of the past?

The COVID-19 pandemic has posed dramatic challenges for supply chains worldwide. Multiple national lockdowns continue to slow or even temporarily stop the flow of raw materials and finished goods, disrupting manufacturing as a result.

There are so many factors internationally and nationally affecting the supply of goods, that it is fair to say that ‘just in time’ supply chains are a thing of the past, for a while anyway.

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It is important to understand the following supply issues that we are facing here in New Zealand:

1. September to January is always a busy time of year as retailers stock up for Christmas and businesses importing out of China prepare to hold stock to cover them through the Chinese New Year which sees manufacturing grind to a halt for a month.
2. Add to this the complications caused by COVID which sees manufacturers struggling to staff factories, delays in production, increased costs of raw material and surges in demand for certain products.
3. Add to this an energy shortage in China which is leading to factory shutdowns and additional cost.
4. Add to this international shipping is “broken” with long lead times and costs up around 300%.
5. Add to this local port congestions in New Zealand.
6. Add to this local freight is congested in Auckland due to the lockdown and to the South Island due to two key ferries being out of service.
7. Add to this uncertainty about COVID-19 spread and extend of lockdowns.

In order to attempt to mitigate these issues we are encouraging our distributors to hold stock of critical items and to plan their supply needs ahead of time, to secure supply for their customers.

By working in partnership we hope to avoid the boom and bust cycles of stock arriving and then being cleared out immediately.

If you want to minimise stock issues please get in touch with us as soon as possible so we can help you plan contact – ph7 International on 0800 323 223, email enquiries@ph7.co.nz