Concerns among U.S. housewares suppliers and retailers about supply chain disruption out of China after the initial coronavirus outbreak have been surpassed by more urgent concerns closer to home about public health and safety and economic wellbeing.
Housewares vendors, nonetheless, report Chinese factories continue to wind up production capacity, despite lagging orders and expected shipping delays. This, many expect, could mitigate the threat of widespread, long-lasting inventory shortages for a housewares business that could be a key contributor when U.S. retail business resumes full-scale operations and the marketplace begins its recovery.
“We are encouraged by the recovery in China on our supply chain,” said Robert O’Donnell, vp/supply chain for H2 Brands Group, which markets Comfort Zone home comfort appliances. “Most factories (were) expected to be at least at 90% capacity by the end of March. We are working with our factories to prioritize orders and expedite where possible. We are also working with customers for fill-in or replacement products on inventory we already have in the U.S.”
Lauren Greenwood, president of storage accessory developer YouCopia, said, “Our factories are almost back to full capacity and hitting ship dates without issue. Our brick-and-mortar supply has remained 100% in stock… We increased initial order quantities and safety stock level requirements for new items where historical data is lacking. We’ve been reviewing forecasts, extending ship windows, discussing back-up plans and maintaining constant communication with all of our supply chain partners.”
Companies that had increased domestic inventory levels in anticipation of an extended trade war between the U.S. and China might able to mitigate the worst of the coronavirus-related supply chain disruption.
“Fortunately, we brought in additional inventory in case the tariff was implemented in December, and it is helping us through the current virus problem,” stated Jim Haskins, vp/marketing and product development for kitchen electrics and table-to-ovenware supplier Aroma Housewares.
Heshy Biegeleisen, founder of kitchen electrics developer Gourmia, added, “When the tariffs began, we realized the only way to survive it was to explore options and alliances that would make us a leaner, smarter brand… As a result, we are better prepared to deal with the potential impact of the coronavirus.”
A stalled economy and thousands of temporary store closings with much of nation locked down to contain the coronavirus pandemic has thrown a wrench into the resumption of Chinese factory output suspended in the early stages of the outbreak there.
Strict social distancing guidelines and orders have shifted retail ordering priorities to food, medicine, health care supplies and household essentials and food. Some housewares production lines in China are slowing again and warehouses there are filling as retailers in the U.S. and around the world cancel or suspend new orders and replenishment.
Even as Chinese production ramps up, shipping delays are still expected as each link in the Chinese supply chain reboots. This includes raw materials flow, trucking, ports and ocean freight.
Lance Hood, president of kitchen tool supplier Progressive International, said the production pinch in China extended in-stock dates by 30 to 45 days even before the social distancing lockdowns and temporary store closings began to divert retail orders.
Suppliers stressed that honest communication and engaged collaboration between vendors and their retail customers will be vital in assessing supply chain status, regulating delivery expectations and maintaining solid inventory levels through 2020 and into 2021.
Companies that diversified their supply chains in recent years to guard against overdependence on China also face uncertainty about when factories in other locked down markets, such as Italy and India, will restart. Even U.S. and North American manufacturers that figured to help relieve shortages of Chinese imports, face potential, short-term production limitations if their employees are subjected to rigid social distancing restrictions.
Vendors are also taking measures to diversify stateside distribution points, even though such facilities generally are exempt from shelter-in-place restrictions.
“We see government restrictions as the biggest potential threat to disrupting operations,” said Marc Wade, vp/business development for cutlery and cutlery accessory supplier Messermeister. “Our focus has been to ensure best practices for health and wellness internally. Simultaneously, we are also shifting some inventory to alternate distribution centers to diversify the risk of a shutdown.”
For more on the supply chain, see the April 6, 2020, issue of HOMEWORLD BUSINESS®.