The 10 cautionary supply chain tales of Christmas
With the festive season upon us, supply chains everywhere are feeling the pain of Santa’s elves in meeting demand at this busy time. As if the most active retail season of them all wasn’t stressful enough, eProcurement provider Wax Digital has shown that over years some companies have seen a variety of supply chain challenges that have threatened to grind aspects of Christmas to a halt.
Forget ‘A Christmas Carol’ and ‘The Nutcracker’; the 10 cautionary supply chain tales of Christmas each have a moral to the story that companies can learn from as the big day approaches.
- The tale of the dangerous product: Last year’s case of Swegways setting on fire, and a similar thing happening with the Samsung Galaxy Note 7 shows how rushing a product to market in time for Christmas could actually put customers in danger.
- The tale of the shrinking supply: For many, Christmas isn’t complete without a cheese platter, but this year it might lead to a hefty shopping bill. Dairy produce is in short supply due to hundreds of dairy farms going bust this year, leading to a price hike by supermarkets.
- The tale of the moth attack: Love or hate them, Brussels sprouts are a classic part of Christmas dinner. Sprout lovers will be disappointed that they’re under threat this Christmas after an invasion of sprout-eating moths.
- The tale of the celebrity endorsement: When it comes to Christmas dinner, those who live by ‘if Heston/Delia/Nigella is doing it, then so should I’ can cause a supply problem. Back in the 2010 when Heston Blumenthal released an intriguing ‘Hidden Orange Christmas Pudding’, demand outstripped supply and it was hard to come by in the supermarket aisles.
- The tale of the totally unexpected: Back in 1983, if you wanted a to buy your daughter or niece a Cabbage Patch Doll for Christmas, you had to risk getting a black eye and being trampled on. Cabbage Patch Dolls became the unexpected craze of the year, and the short supply led to violence in US department stores, resigned to history as the Cabbage Patch riots.
- The tale of the pandemic: A winter flu is almost inevitable for some of us, but when poultry is affected, some of us might have another reason to stay in bed on the big day. Another outbreak of bird flu in 2014 led to many fearing that the supply of Christmas turkeys was at risk.
- The tale of the worker’s revolt: Almost on a daily basis, we’re hearing stories of threatened strike action from the likes of Argos, Diageo and Royal Mail. As in the case of Argos, strikes do get cancelled, but any strike action that does go ahead at this time of year has the potential to cause delivery chaos.
- The tale of the adverse weather: If you dreamt of a white Christmas in 2010, you weren’t disappointed. But it caused an interruption with Royal Mail, as the bad weather forced it to increase the amount of delivery rounds to reduce the number of Christmas cards and presents being held up.
- The tale of the power cut: A power cut on Christmas Day means no turkey, no Vicar of Dibley Christmas special, and nowhere to power your new Xbox. This happened for many of us in 2013, and energy companies were faced with the prospect of paying over £4 million in compensation.
- The tale of the DDoS attack: Thanks to the growing phenomena of Black Friday and Cyber Monday, the rush for Christmas gifts begins before December, with many of us heading online to bag ourselves a bargain. But with this comes a prime opportunity for hackers to commit ‘denial of service’ attacks, putting yours and your customers’ data at risk.
Daniel Ball, director at Wax Digital says, “A significant chunk of many companies’ annual profits come from the festive period, but with this high demand comes the risk of losing considerable business and disappointing customers if a problem occurs in the supply chain. Provided companies have a risk management strategy in place, implement a sound supplier relationship management system, and roll out strategic sourcing, they can prevent Christmas from being a disaster and round off the year with some prosperous trading.”
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Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.