Businesses fear reputational hit from Christmas stockouts




‘Embalmed demand’, ‘bottlenecks’, metaphors multiply to explain supply problems in some raw materials and semiconductors. A global phenomenon that coincides with one of the times of the year with the highest consumption: the Christmas season. A situation that, at the moment, is a headache for supply chains and that, from the Black friday, will become a demanding test for the credibility of companies.

The industry still does not perceive any reputational damage, despite being the link in the supply chain that has suffered the most from the raw materials crisis. Because in industrial sectors, as in so many others, the blow has been worldwide.

Something that does not evade that they have had to take measures to satisfy their customers. Explain it the general director of the employers’ association of Spanish internationalized industrial companies, AMEC, Joan Tristany, who assures that now more than ever communication with the buyer has been constant and the information is being monitored almost daily. “The key is to adequately justify the possible lengthening of terms and the price increases. Companies are already asking for objective analysis of the evolution of prices of raw materials to understand the increases, “he assures.

Tristany does admit that there is some discomfort in some cases. “We find ourselves with internationalized medium-sized companies that, in order to develop their products and machines, need components from other companies, often large ones. The uncertainty of when the supply will be produced does make them a little desperate, but it does not go any further, “says the head of AMEC. In any case, “customers are aware.”

More communication, key

“The pandemic warned us of the importance of preparing unpredictable scenarios,” says the partner of the Risk and Crisis area of LLYC (Llorente and Cuenca) Ivan Pino. In his opinion, reputation “can be affected in very different settings and stakeholders at the same time.” In this regard, Pino warns that in some sectors such as industrial, there are companies that “do not have communication channels with many of their interest groups.” This expert foresees that the current situation may continue until well into 2022. For this reason, he urges to equip oneself with the necessary resources and structures: “Silence is no longer profitable, it does not work, much less in a crisis situation” , concludes.

Similar advice gives Carlos Costa, Professor of ESIC. “We must mitigate and warn consumers of what is happening: I would not recommend silence,” warns this expert. In his view, what is essential in this type of crisis is the “management of expectations” and the “evaluation of possible scenarios.” Costa believes that the lack of information increases uncertainty and spreads risk: “Communication helps to anticipate the proliferation of rumors,” says the ESIC professor. From the ‘TrustMakers’ consultancy, specialized in business strategy, its executive director Sandra Sotillo believes that “the great risk is not being able to handle customer expectations well” and is committed to “improving communication and information” without delegating to third parties. In any case, Sotillo emphasizes that everything will depend on the reaction capacity of each company and is in favor of “listening” to the context to anticipate risks. “Several months ago they were already talking about the crisis of the carriers and the lack of semiconductors, for example,” he recalls.

The retail example

It will be more complicated, however, for the retail sector, which at the Christmas of the recovery will face ‘stock’ tensions with its star products. Models of video game consoles, computers and even brands of gin will be missing. “Companies are aware that they will not be able to satisfy consumer demand. Saying something else is not telling reality. There are a series of products that if they exceed demand, customers will have to accept that they will not be able to access them “, tells ABC the president of the Spanish Retail Association, Laureano Turienzor. “What worries me is that some have been surprised by this stock-out when we are in the strangest and most catastrophic moment in the history of retail. We have had a virus that has exploded the supply chain and what is truly striking is that there were absolutely normal Christmases », adds Turienzo.

For the employer’s leader, a good job of communication, of many social networks and contact with the client will also be essential to justify the lack of products. It is concerned, above all, with the small business that has less purchasing power. «They will have to explain very well to the consumers because some stores have a product and others do not. But they will have to be honest. Explain it well. You cannot create expectations for the customer and then disarm him. Much better to say ‘we have this or we have little’. People appreciate it, “he says.

Logistics: replan

From the employer ONE, your president Francisco Aranda, recognizes that he has detected “nervousness” and “uncertainty” due to the proximity of the Christmas and its weight in billing. “Since March there has been a situation of maximum tension in the supply chain, which has not been broken or there has been a shortage thanks to the work of the logistics departments and logistics companies,” he claims.

Logistics has accelerated its digitization with the pandemic and gone from commodity to competitive advantage. “We have become technology companies, now we do predictive logistics,” says Aranda, who points out that in the current crisis the sector is providing permanent information “and re-planning supply chains.”

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