Mercado | Insights - The problem with imports

Insight: The problem with imports

Article | What I learned in Supply Chain

The problem with imports

August 25th, 2021
5 minute read

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Every week, Mercado CEO Rob Garrison pens his latest learnings from the supply chain industry as part of an on-going series. Each article aims to share a little insight into what's going on that week, and to help foster discussion amongst industry professionals across levels, geographies, and companies.
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This is the most difficult time I’ve ever seen for importers—if you combined ALL the challenges I’ve seen in my career, they would equal to what importers are currently experiencing. Last week I wrote about the 5 ways to adapt, but today I’m discussing the solution.
From every crisis, there’s opportunity, and this crisis is no different. The #1 challenge for importers is the purchasing process is entirely manual. I learned this the hard way early in my career when I got chastised by a buyer. She claimed I single handedly “ruined Halloween,” and she was going to see that I got fired. It was a scene I’ll never forget, but it turned out to be one of the greatest gifts I could’ve received.

As background, the retailer I worked for “celebrated” every holiday from Valentine’s Day to New Years. These events needed to be precisely orchestrated. Missing by even one day meant you were shipping straight to markdowns—it’s tough to sell Valentine’s products on Feb. 15.

Purchasing represents 75% of the import process (#FirstMile) & has the greatest impact on margin & sales. Manual purchasing also has a negative impact on logistics: handoffs often can’t be completed seamlessly, critical information (a change in production) is often missing, automation isn’t possible, demand systems aren’t updated, & forecasting is very difficult.

“Purchasing represents 75% of the import process (#FirstMile) & has the greatest impact on margin & sales."
– Rob Garrison, Mercado CEO

The buyer's criticism set off a chain of events that changed the trajectory of my career. Determined to figure out what went wrong, I brought in an industrial engineer to objectively document the entire import supply chain (thank you @Don Williams). We started in my logistics area & worked our way all the way back to how we planned our orders. As my whole career to that point had been in logistics, it was an eye opener to understand how we bought the products I shipped.

The work we did to solve this (seasonal calendar) helped me discover the problem with imports. While purchasing represents 75% of the process (~3 months) it was being managed entirely by PDF, Excel, & email. I was shocked. Surely there must be some automation supporting 100s of millions of dollars worth of inventory? Nope.

This glaring problem meant the entire supply chain had continuous & unpredictable “risks.” You never knew what surprise was going to come next. Not to make excuses...but once the product is on the boat, there is nothing that you can do about it. Boats sail at 23 knots no matter how hot the product is. It’s like dominos—if the first one falls, it sets off a chain of events.

Turns out the buyer needed 90 days to get her Halloween products ready, & she was 30 days late writing her orders! Her solution? Blame the new guy!

The good news is this problem is easily addressed. Online importing is finally here & can be adopted easily and affordably thanks to modern technology. Importers wouldn’t dream of not selling their products online, however they still purchase these products entirely offline. The secret’s out.

About the author(s)
Mercado Labs | Rob Garrison, CEO & Founder
Rob Garrison
CEO, Mercado Labs
LinkedIn

About the Series

Each week, Mercado CEO Rob Garrison pens his latest learnings from the supply chain industry as part of a series run for his LinkedIn followers. Each article aims to share a little insight into what's going on that week and to help foster discussion amongst industry professionals across levels, geographies, and companies.

You can connect with Rob on LinkedIn by following this link.
Mercado | Bring Order to your Imports
                                               
© Mercado Labs Inc.
From us to you...

Thank you for using Mercado. Our goal is to empower businesses to better navigate the complex world of importing. We know data security is of paramount importance, so we place high standards on ensuring it is safely and respectfully secured. We are committed to following and continuously evolving best practices to support this principle. Your data is yours, and we guard it closely. We do not sell any of your information, and we will always be fully transparent on how we collect and use your data. That's a promise.
Mercado | Bring Order to your Imports
                                               
© Mercado Labs Inc.
From us to you...

Thank you for using Mercado. Our goal is to empower businesses to better navigate the complex world of importing. We know data security is of paramount importance, so we place high standards on ensuring it is safely and respectfully secured. We are committed to following and continuously evolving best practices to support this principle. Your data is yours, and we guard it closely. We do not sell any of your information, and we will always be fully transparent on how we collect and use your data. That's a promise.