Transparency in the supply chain
By Oliver Burgess, supply chain director at Mila.
We know that fabricators don’t want to concern themselves with the journey their hardware goes on to reach them – they just want to know that it is delivered to them on time and in full.
That’s why transparency and cooperation are vital between fabricator and supplier so that we are in the best possible position to respond to any changes, new product introductions or peaks and troughs in sales volumes. Mila takes the risks on behalf of customers and manages all of the complexity for them; customers simply have to tell us what they are planning so that we can make sure they are always able to meet their market demand, even if they have no storage capacity of their own.
On production critical and bespoke products in particular, it’s obvious that fabricators cannot afford to run out of stock under any circumstances, so choosing the right supply partner on those products and sharing as much forecasting information with them as possible is critical. Increasingly, we’re seeing customers looking to work with Mila via formal supply agreements because they recognise that, in these circumstances in particular, there are major benefits for both sides.
When we first start talking to a new customer, we work with them to get the timing of their changeover just right. We will ensure that they run down any inventory they hold from their incumbent supply chain efficiently and cost effectively, while putting the necessary safety stock into place so that they are never vulnerable to any circumstances which are beyond all of our control.
There is the obvious issue of Brexit looming of course, but logistics delays can result from anything ranging from typhoons in the Pacific to random customs checks in China, and even IT upgrades in Felixstowe. Being able to anticipate and cope with these and still achieve a 98.5% otif is where the Mila magic comes in.
As I have said many times before, Mila’s supply chain is incredibly robust. Our otif for 2018 will be a very impressive 98.5%, 1% higher even than in 2017. Customers know that they can always rely on Mila to have the hardware they want in stock and ready for next day delivery, and that’s simply because we are experts at what we do.
We’ve spent years perfecting our global supply chain and managing all the complexity which comes from sourcing and shipping products from China. We have become particularly adept at managing extended ranges with lots of size, style and colour variants, because we know that these are the products that many of our customers use as key differentiators.
We work on very long lead times of course – it can take a product up to 16 weeks to reach us from the point of order, through QC, testing, customs, shipping and delivery. That’s why demand planning is such an incredibly important part of what we do and part of the reason why we invested in a major IT upgrade last year to give us access to even more sophisticated forecasting algorithms.
Less experienced suppliers can find themselves caught out by the time scales and the lead times involved, and by the increasingly congested nature of the world’s oceans and ports. It used to take 30 days for containers to reach us from China. Now, in our planning, we always take into account that it takes more like 40 days, because of slower ships and a more realistic view of transit times to and from the ports.
Much of our success I attribute to the fact that we choose suppliers and logistics partners who are of a similar scale to ourselves and who are as agile and responsive as we are. We reap the benefits internally from that, but more importantly, we are able to pass on those benefits to our customers in the form of our outstanding otif scores.