It’s all about the otif
Richard Gyde, managing director of Mila, explains why suppliers need to do more to help customers cope with demand.
I write a regular blog on the Mila website (www.mila.co.uk/blog/). Over the years, it’s become one of the most visited pages on the site, largely I think because I always try to give honest insight and straightforward updates on the business and the market.
Of the 20 or so posts I’ve written this year though, no less than 17 have been on the single topic of coronavirus; going as far back as February when it first started to become an issue for some of our suppliers in the far east. I’ve charted the spread of the disease, the lockdown, the reopening, and now of course the pressure on suppliers to keep up with demand.
My aim on the blog has always been to communicate openly and directly with customers, colleagues and suppliers, and I would definitely encourage others in the industry to do the same. It might help to create a better sense of mutual understanding.
Over recent weeks, the dominant theme of my posts has been the extraordinary efforts of suppliers like Mila to make sure that fabricators have the products they need to keep trade, retail and commercial customers happy.
I don’t think any of us could realistically have expected the industry to bounce back from the lockdown quite so strongly as it has and, while that is brilliant, it has tested capacity at many points right across the supply chain. There are widespread reports now of stock outages on profile, glass and hardware, made worse I think by the fact that some companies simply pushed back too many orders and then kept staff on furlough for too long and are now not communicating properly with customers.
By contrast, Mila is going above and beyond to make sure our customers can make the most of the available opportunities and the general improvement in the market. Everyone here – from front line sales to supply chain – is more focused than ever on keeping our line otif (which indicates how many items we have in stock) as high as possible.
I get our daily performance metrics delivered into my inbox at 6.30am every morning and they’re the first thing I look at when I pick up my phone. At the time of writing, our line otif is sitting at 92.2%, and it’s prominently displayed on our website for all to see. 92.2% is way down on where we would be in normal times when anything below 98% would trigger an investigation. However, judging by the number of enquiries we’re getting from fabricators who are being let down by their current supplier, it’s still much higher than many of our competitors.
Mila has the huge advantage, of course, that we still have the resources available to be able to invest. We are currently spending £tens-of-thousands on air freight to get more product onto our shelves as quickly as possible, and we have weekly meetings to make sure we target that option as effectively as possible for those customers with the most urgent demand.
We also maintained contract terms with all of our suppliers throughout, so they’ve pulled out all the stops to ensure that we’ve got lots of stock on the way to us by sea, which will be with us within weeks to ensure that normal service can be resumed.
As you’d expect, we’re doing all we can to help everyone who contacts us, but we still assess every single order against stock levels and forecasted demand so that loyal Mila customers are never disadvantaged for the sake of a new enquiry.
It’s clear that suppliers are already being judged by their customers on how they performed before, during and after the lockdown. I am determined that Mila will come out on the right side of that judgement.