In this article, learn about:
The challenge of irregular ordering patterns
Root causes of delays and what's in your control
Proactive planning strategies that reduce problems
Planning and logistics managers know that a reliable and seamless ordering system is one of the key benchmarks of success. However, anyone involved in the supply chain industry knows that keeping track of atypical ordering patterns can be a complex and challenging logistical process. Irregular ordering can be inconvenient and a fundamental challenge in effectively running a supply chain.
Whether irregular ordering happens because of communication issues, extended holiday closures, or unexpected events like pandemics or natural disasters, staying ahead of the curve is essential. Read on to see what's in your control, what isn't, and how to prepare proactively.
Understanding the Root Causes of Irregular Ordering and Delays
Irregular orders occur for various reasons, from a shipping delay to an unexpected closure to human error in data entry. Irregular orders can lead to disruption in the supply chain, causing interruptions that affect business operations. These atypical ordering patterns can create a domino effect and ultimately impact critical components and materials, which in turn affects the bottom line. Regularly assessing supplier performance and risks is essential to minimize irregularities and ensure supply chain stability. Next, we’ll outline what areas are within your control as a supplier and what areas aren’t, and how understanding the process behind irregularities helps identify areas within your control.
Supplier Side Issues (Within Your Control)
While most issues that impact irregular ordering occur externally, there are a few places that planning and logistics managers can inspect to ensure optimal functionality. Allocating resources efficiently is crucial for addressing internal issues and maintaining smooth operations. Managers can leverage technology to streamline internal processes and reduce errors. Additionally, using the right tool can help track and resolve supplier-side issues more effectively.
Human Error
Manual ordering mistakes are among the most common issues that impact the bottom line. High-risk areas include data entry, price checks, and inventory management, where mistakes are common. Examples of human errors include entering incorrect quantities, using wrong item codes, or selecting the wrong product from a list. Data accuracy is key, as even small mistakes can lead to delayed and lost orders, wrong shipments, and customer dissatisfaction.
Production Challenges
Delays can happen internally that affect order consistency. Sometimes, machinery fails to keep up with production levels or breaks down, requiring repairs. Production delays can cause inventory levels to fluctuate, making it important to monitor and adjust inventory to maintain supply chain stability.
Sometimes there are workforce shortages. Lack of personnel is a common problem that can exacerbate delayed order windows. To mitigate risks associated with these production challenges, proactive planning and contingency strategies are essential.
Communication
When managers have multiple responsibilities, communicating clearly becomes even more important to avoid misunderstandings and errors. Strong supplier communications help prevent issues such as missed price updates or incorrect forecasting. Both you and your retailers should feel comfortable openly sharing concerns to avoid delays and disruptions. Addressing concerns early can prevent larger issues down the line. For example, if price changes aren’t updated in time, incorrect forecasting is likely. In that case, accounts payable have to correct the error, which results in delayed supplier payment.
External Factors (Outside of Your Control)
Most root causes for irregular ordering and delays are external factors. These events, expected or not, happen regularly.
Vendors can be affected by external factors beyond your control. For example, geopolitical tensions can disrupt supply chains and limit access to raw materials. Relying on a single supplier during such external disruptions increases the risk of significant delays or shortages.
Holidays
Major annual holidays can significantly impact the supply chain when materials are being sourced from across the globe. Holiday delays are familiar and common around Christmas and the New Year in the Western Hemisphere, and Lunar New Year has the largest impact on suppliers that source in China and East Asia.
The Lunar New Year is significant because workers are typically out of the factories for a minimum of a month. This results in labor shortages, port congestion, inventory, and backlogged orders. If your company often relies on last-minute replenishments, this could mean stockouts and delays before and after the holiday. Timelines often get compressed before and after the Lunar New Year, which can result in quality issues.
Store Closures
Another common cause of irregular orders is when a physical store permanently closes and has extra inventory. As a supplier, it's your responsibility to ensure that leftover inventory is taken care of to prevent financial loss. This loss can occur from bound-up capital from unsold goods, expensive storage costs, insurance, and maintenance.
One of the most common practices when a brick-and-mortar store closes is to rely on e-commerce to absorb the excess inventory. However, processing higher order volumes and ensuring fast shipping can be challenging when inventory is no longer managed within a physical location. Additionally, canceling or redirecting POs or automatic POs can cause issues within the supply chain.
Walmart Sales Event Codes
Walmart hosts multiple invite-only sales events every year. The goal is for suppliers to reduce stock by selling out quickly and at a low margin. Suppliers need to be able to schedule and load trucks at a much quicker pace than normal, which can be a primary driver of revenue loss.
These sales event codes have a long list of packaging and display requirements, and it's up to you, as the supplier, to fully understand them. Data accuracy is of utmost importance because if your shipments are late, your item setup is incorrect, or your lead time is off, you risk being canceled or removed from the program.
Unpredictable Events
Pandemics, natural disasters, political unrest, extreme weather, and war are all large-scale events (both global and national) that commonly affect the supply chain. These events can impact employee operations, factory production, shipping holdups, and more.
Production challenges like product availability or material availability can significantly impact orders. During the COVID-19 pandemic, for example, aluminum was in high demand, which severely affected the food and beverage industry. Many suppliers had to pivot, compensate, or purchase safety stock they didn’t necessarily plan for.
Prevent Headaches with Proactive Planning
Developing a clear strategy for managing irregular ordering is essential to minimize disruptions and maintain supply chain efficiency. It is important to involve internal stakeholders, such as procurement, sales, and operations teams, in the planning process to ensure alignment and effective execution. Many professionals recommend using structured planning tools to address irregular ordering and improve decision-making.
Irregular ordering patterns are inevitable. However, there are many ways to combat the negative impacts mentioned above. As with all business decisions, there are nuances regarding the complexity and impact of each option.
The matrix below outlines the effort and impact of each option. We’ve grouped each solution according to effort and effect so that you can make the best choice for your team.
Low Lift / Low Impact
| Low Lift / High Impact
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Heavy Lift / Low Impact
| Heavy Lift/ High Impact
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One of the best proactive strategies for sales and logistics managers is an updated calendar that anticipates upcoming disruptions, such as holiday closures. Building effective disruption plans does not happen overnight; it requires ongoing effort and continuous improvement. Below are a few ways to prepare for supply chain disruptions.
Place orders and schedule shipments far in advance of major holidays.
Pause routine deliveries during closures
Research potential shortages in raw materials
Look into alternative transportation options if needed
Explore diversifying suppliers in other regions to reduce dependency
Related Reading: How to Plan Production Around Chinese New Year
Demand and Supply Planning
Demand and supply planning is key to increasing confidence and protecting revenue during uncertain times. Planning accurately allows you to be nimble and data-driven and helps you establish the amount of inventory you need to keep on hand (demand planning) and how to keep it in stock for the future (supply planning). Having access to accurate data is essential for effective demand and supply planning, enabling timely and informed decisions.
Demand Planning Recommendations
Analyze historical sales data in a comparable recent year
Consider upcoming sales forecasts
Educate yourself on industry trends
Observe marketing initiatives and retailer reviews
Supply Planning Recommendations
Review all automated ordering systems
Plan for pauses in deliveries
Maintain safety stock (we recommend a minimum of six weeks' supply)
Build buffer inventory by stockpiling critical items
Order early (for example, at least three months ahead of Lunar New Year)
Ease Communication Channels
Effective supplier communication is one of the most critical factors in maintaining a healthy bottom line and preventing irregular ordering. Poor communication creates a domino effect of negative consequences, from initial misunderstandings or missed orders to significant financial damage.
Communication should not be limited to just internal teams but should include all relevant parties, such as retailers, and customers, to ensure everyone is aligned. Effective communication helps ensure customers receive timely and accurate orders, which is essential for customer satisfaction and loyalty.
Anticipate and report all supplier closures (including holidays or maintenance) to all retailers. Failure to do so may result in automatically generated orders, which disrupt operations. Make sure to report them using the identified software or methodology of the individual retailer.
An open flow of communication between all stakeholders, both internal and external, will protect all parties from surprises. Transparency builds trust, allows for a paper trail of written communication, and helps identify the root cause of delays. Keeping your retailer contact updated and informed is one of the most reliable ways to prepare for irregular orders.
Education is Empowerment
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