This week on the Syndic8 Series, Chris talks to Ken Kellaway, CEO and President of RoadOne. They discuss long-term planning with your supply chain partnerships, changes in shipping and consumer expectations in the last five years, how RoadOne had to react to the Baltimore bridge collapse, and more.
Here's one key takeaway from the conversation:
Balance Sheet Risk Shifting Back to Brands
We're seeing a reversal of trends for supply chains and who's at risk for inventory…
Before, there was more risk to the retailers on their inventory. Their balance sheets were much stronger, and they were making large purchases.
Now, we're seeing this risk move back to the manufacturers and brands.
Previously, people were mostly buying FOB shipping point, which is much riskier for the buyer.
If anything were to happen from the time it ships to the time the buyer receives it, it all falls on the buyer.
Now, more people are buying FOB destination, which is the opposite, putting the manufacturer at risk until the product arrives to the buyer.
And if you're relying only on one port for shipment, you're putting your product at a lot of risk.
A great example of this is Michael Dell, who started Dell Technologies. He had all of his vendors keep inventory within a certain mile radius of his assembly plants.
This meant he didn't have the carrying cost, and he had immediate access to it.
His supply chain was fast and efficient, and it made a big difference in the way he handled and sold product.
Watch this great conversation with Ken Kellaway about some new trends we're seeing in distribution. He offered a great perspective and advice on making your supply chain more efficient and accessible.
– Chris