Shawn D Gallagher: Retailers holding stock despite pandemic struggles (voice)

Shawn D. Gallagher

Two years into the pandemic, the global supply chain continues to affect retailers as news of consolidated ports, record freight rates and other disruptions dominate the headlines. As retailers struggled to receive inventory to sell to their customers at the start of the pandemic, they continued to buy more and more merchandise.

The situation was particularly difficult for companies with complex supply chains, as their production and transportation of goods were vulnerable to disruptions due to shortages of inputs from other companies. In many ways, the COVID-19 pandemic has revealed just how fragile our global supply chains are in responding to unexpected changes in demand.

Now, as life gets back to normal and consumer behavior fluctuates with market conditions, some businesses have the opposite problem – too much inventory and not enough turns – leaving businesses wondering how to store inventory that they need. did not expect to hold.

Ultimately, retailers with a balanced and well-planned inventory when the pandemic hit had a significant advantage over those who relied on a steady stream of deliveries. This inventory provided the opportunity not only to continue supplying goods to customers, but also to have a chance to acquire new customers if competitors were unable to supply those goods.

The scale of the COVID-19 disruption was both unexpected and catastrophic for some industries. While this type of disruption hasn’t happened regularly in the past, the reality is that problems are inevitable and retailers may need to rethink their approach to inventory.
So what about retailers who may be holding stock in light of these issues? Some may prefer to overstock goods to avoid negatively affecting revenue due to insufficient inventory.

Holding inventory also means retailers can ship to their customers with a better on-time delivery rate by eliminating some unknowns. While the lockdowns have hopefully passed us by, the disruptions continue to ripple through our supply chains, whether products are made domestically or overseas.

In today’s environment, retailers with large inventory can adequately handle any unexpected consumer demand. Businesses can also resolve any incidents with suppliers not delivering inventory on time. With delayed port inventory, retailers carrying large quantities can still operate under normal conditions.

In addition, the risk of production shortage and the cost of the order are reduced. When a company runs out of a particular type of stock, it may not be able to manufacture its products until the stock is replenished. Inventory management facilitates the follow-up of manufacturing requests.

For retailers in essential industries, what is stocked can be as important, if not more, than the quantity on hand. We are seeing an increased need for parts and maintenance. Demand for whole goods in the transportation and manufacturing sectors has exceeded supply and will continue to do so in the near term. Taking care of what’s in place has never been more critical.

Although the pandemic has changed the course of inventory management practices, strong retailers remain. And until the supply chain can return to a more typical pace of operation and address the weaknesses that are now very apparent, retailers who can keep the right inventory will see a significant benefit.

Shawn D Gallagher is Director of Operations for Silver State International and Peterbilt Truck Parts & Equipment. The two full-service dealerships offer sales, parts, service, collision, computer, rental and rental services. Parts departments provide multi-million dollar inventories that offer a wide variety of exclusive, all-brand parts, including the Peterbilt, International, Cummins and Caterpillar lines. The company is committed to being a valuable inventory resource for its customers.