I started CRAVEBOX in 2014. CRAVEBOX assembles and sells gift snack boxes and baskets. It’s June 2022 and since the start of the pandemic the supply chain has become very unreliable. CRAVEBOX needs to source a lot of snack products to include in our snack boxes. At the start of the pandemic, employees were taking off work and manufacturers were not able to keep up with demand, especially since consumers were buying snacks online more than usual. Even as the COVID fears settled, labor shortages remained because many people decided to retire so the labor participation rate decreased, and as part of a COVID relief package, unemployment checks were keeping people from quickly searching for work. The result of this has been labor shortages at manufacturing and shipping companies, and most business across the US. For CRAVEBOX to source all the snacks needed to make our care packages, it’s been difficult, but I’ve given it a lot of effort and found a few strategies that have been helpful.
Find Redundant Suppliers
The first thing I did was start to order the same products from multiple suppliers. Before COVID, if I ordered a particular snack product from one supplier, I would only order it from that supplier because they would usually be reliable and I could expect fulfillment of my entire purchase order. Since the pandemic started, my purchase orders are only fulfilled about 20% on-time, so it becomes necessary to order the same products from multiple suppliers. I started ordering the same products from about 4 different suppliers. If all the product came in, I would have way too much product, but only about 20-25% of each supplier’s order was fulfilled so I ended up receiving just about the right amount of product. It has been confusing and difficult but I’ve found a good balance of this redundant ordering that seems to work. It’s more of an art than a science and in this summer 2022, I can feel the supply chain is starting to improve, so hopefully I can start ordering a larger percentage of my products from just 1 reliable supplier because it’s much easier to project what inventory you will receive when doing that.
Lease more Storage Space
Soon after the pandemic started, CRAVEBOX moved into a 60,000 sqft warehouse space which was much larger than our previous space. This proved to be essential in managing the unreliable supply chain. I was able to use the redundant supplier method above and if I did receive too much product, I had the space to store it. I was also able to start ordering from suppliers with a longer lead time and place larger POs. This way I would receive more product than I needed and store it longer in my facility. When the supply chain is very unreliable, you need to order more and store more so that if there comes a period where you can’t get a certain product for a long period of time, you have extra in your facility. For example, Fun Dip is a candy product that we include in our CRAVEBOXES. Fun Dip was constrained and not available anywhere for about 6months recently. Luckily, I knew that Fun Dip was sometimes unreliable and it has a long shelf-life, so I had about 6months stored in my warehouse. I slightly decreased the amount we included in our snack boxes so the amount in our warehouse lasted even longer than 6 months and we were able to keep operating normally until the manufacturer could supply it again.
Vertically Integrate
This is a longer-term solution but it’s something I’ve started to implement at CRAVEBOX. Instead of buying snack products from other brands, I’ve started to manufacture our own snack products by hiring co-manufacturers. This is more reliable and less expensive but it’s a lot of work and you need to place large minimum orders. We’ve recently started manufacturing 4 snack products that we’re now including in CRAVEBOX. It’s great because I know these 4 snack products can be produced and delivered very reliably, in large quantities, so it makes the overall supply chain a little bit easier.
About John Accardi
John Accardi is the founder and CEO of cravebox.com and starcourse
