Challenges faced by brands if they don’t have a tightly knit supply chain system

Bhisham describes The Man Company as a fast growing brand – but as an FMCG product and a new age brand, the growth can be unpredictable. Although they have data points about various sale events, the results from a sale event from 2023 will not be the same as the same sale in 2022. One of the biggest challenges that The Man Company faced is that sometimes they’re sitting on 45-60 days of inventory while at other times they are sitting on 5 days of inventory – if the sales of a product has suddenly picked up, they’re in firefighting mode, meeting the demand with supply.

Another example is that if they run an ad and it performs really well, it becomes a firefight again because you can predict what makes a customer tick – and that’s a major challenge for Bhisham.

Rahul adds that customers are emotion driven and with fast growing brands, this can be a major challenge. Additionally, planning can be a major factor in ensuring smooth flow of the supply chain. You can never work on a fixed quantity model – instead set up a safety stock number for when you need to reorder, sort of like the reserve in a fuel tank. This makes things more predictable financially or from a working capital perspective.

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Aligning with the values of your customer

With sustainability slowly becoming the core theme of shopping for the modern customer – are deliveries something that needs to move towards a more sustainable model such as running EVs for deliveries?
Rahul believes that one way to ensure that deliveries are sustainable is to decentralise larger warehouses into smaller city-based warehouses which can basically help not only move goods in bulk but also reduce the carbon footprint and reduce costs associated with deliveries as well. In addition to that, this also increases the serviceability and cut down delivery times significantly as well.

However, Bhisham adds that although brands can save on the cost of logistics, warehousing can be an expensive affair. Also, maintaining inventory in a lot of warehouses can put a dent in the pocket as well. Although expensive, this can be an efficient practice if planned and implemented properly.

Packaging on the other hand can lead to a lot of wastes due to plastics and to reduce their carbon footprint, The Man Company has stopped using security bags made out of plastic and started using paper instead – they also recycle all the plastic they generate at the end of the year. Due to the nature of their business, they cannot cut out plastic completely but they’re employing various methods to be as sustainable as possible. Bhisham also adds that consumers must play their part and take ownership of sustainability by

Customer delight can be earned

As a D2C brand, you’re selling on your own website to your customers, and they’re used to a certain experience when they’re shopping online due to large marketplaces such as Flipkart and Amazon, especially with delivery. Brands like Amazon and Flipkart have set the benchmark for the certainty and speed of delivery – after which comes the returns phase where they offer frictionless returns and today’s customer is used to that and expect it from everywhere they shop from.

A smaller D2C brand might find it challenging to keep up with these expectations, how do they overcome this challenge?

Bhisham says that it might be difficult for brands to match the delivery speeds of say Amazon or Flipkart or other quickcommerce players – it is also very expensive to implement this in all practicality. The best thing that brands can do is to promise right and keep their promise, whether it is one-day, two-day or three-day delivery, ensure that these promises are met.

Don’t overpromise and under deliver, this will ensure customer delight.
He also goes on to add that he brands that have a lot of RTOs due to improper targeting. If their product is shown to relevant people there will be lesser orders that are refused at delivery. This has worked to The Man Company’s favour because they show their ads to a very targeted audience.

Key takeaways on scaling the supply chain

• Optimizing warehousing can be a game changer for the supply chain of D2C brands.
• It is key to align with customer values, for instance, sustainability.
• D2C brands are held to a very high standard due to experiences offered by brands like Amazon, Myntra and Flipkart – promise right and keep that promise, never over promise when it comes to delivery.
• Targeting the right customer can greatly help reduce RTOs.
• Focussing and trying to offer one-day delivery in a particular city can help boost rankings on marketplaces.

Wrapping up

Management tools and other insight on scaling the supply chain which Bhisham and Rahul took Q&As from the audience as well.
For more insights into the Scaling the D2C Supply Chain webinar, watch the recording now!