Supply Chain Not Running on Empty, But Definitely Slowing Its Pace
If you run or jog, you are probably familiar with interval training. If you’re not, that’s when you alternate a slower pace with a more-intense, faster pace during your workout. Or, if you’re like me, you run to your destination, which happens to be a place that sells iced coffee, and then walk or jog home with your caffeinated reward.
As for the companies that manufacture the shoes we wear when we run or drink beverages while moving at a moderate pace, right now is like the lower-intensity part of the interval workout. In a recent survey, the Running Industry of America (RIA) found that nearly half of running shoe brands expect supply chain disruptions in coming months, and nearly three-quarters don’t expect a return to shipping “normalcy” until the third quarter.
Terry Schalow, RIA executive director, told SCBP that initial disruptions to the running shoe supply chain were “relatively temporary” even though most of the production takes place in southeast Asia. But now, more than half of brands are putting product launches on hold until later in 2020. Another popular strategy is to “intentionally slow the supply chain to move through inventory.” The goal is to prevent surpluses in anticipation of looming sales reductions that could reach 60 percent.
Worst case, 40 percent of brands reported they don’t expect to survive if the coronavirus crisis continues long term (into 2021). However, some respondents sounded confident about their outlook. “We are made in USA, don’t rely on huge pre-books and focus on being agile,” one brand reported. “We’ve dramatically lowered production forecasts, and will have to make some modifications to … product introductions, but overall we’ll be able to manage the supply side to avoid huge closeout consequences.”