How inventory control and stock forecasting software could’ve helped your business stay stoic in the Suez snafu
“We need to envisage every possibility to deal with the things which may conceivably come about,” Stoicism founder Seneca wrote in AD64. He added that we need to envisage good fortune “if we do not want to be overwhelmed and struck numb by rare events as if they were unprecedented ones.”
If Seneca could have foreseen the week-long interruption to 12% of the world’s shipping in the Suez Canal in late March, causing losses of $10bn a day, he might have recommended inventory control software like StockTrim.
Global supply chains were crippled from March 23 to 29 when the 400 meter, 18,000 containers, 200,000-tonne ship Ever Given ran aground and blocked the Suez Canal in both directions.
The result was 300 vessels treading water at either end of the canal – and businesses worldwide experiencing firsthand how vulnerable we are to supply chain interruption.
The costs reported from the blockage included:
- Crude oil markets added 3% to the price per barrel
- The hold-up of goods was estimated by insurer Lloyd’s to cost USD9.66bn per day
Leading up to the supply planning snafu, commentators have said a surge in shipping demand over the past year has been caused not only by few cargo planes being available but also by people stuck at home during lockdown making higher-than-usual orders of shippable goods with their disposable income, stretching global supply chains to the limit. Meanwhile, many governments have nationalized and restricted supply routes, plus less oil shipping increased prices of crude oil and refined jet fuel, and petrol.
Ships have also been taking longer to unload due to COVID safety protocols.
What’s clear here is that inventory control is a must. That requires us to switch off our human override and pay attention to realistic inventory forecasting numbers produced by smart inventory planning software like StockTrim.
With Stocktrim, it’s easy to take a bit of news such as a delayed lead time and automatically adjust all purchasing and production plans.
It’s about prediction combined with action and reaction.
Load data about your current stock levels, suppliers status and lead times into StockTrim and factor global events into your trend analysis. You’ll be able to easily forecast stock quantities you need to order right now, so that you don’t get cut short or accidentally order too much – for example, when you’re a retailer of health supplements, some of which may be sourced from countries more burdened with lockdown than others.
You’ll also be able to drill down into underlying demand patterns and handle stock planning and demand planning so your customers don’t blame you for supply interruptions, and so your multi-level bills of materials aren’t all over the place – for example when putting together a beverage which requires 20 different ingredients.
You can set up intuitive order plans and factor variable lead times into these orders – plus factor in which of your locations is most at the mercy of supply chain interruption.
At the end of the day, the company that has products to sell when the customer wants them wins, and while we can’t always control customer demand, we can get on top of demand forecasting and turn inventory planning into a competitive advantage – all starting with some easy-to-use inventory optimization software.