by Becky Alstott, Vice President of Customer Success and Matt Lockman, Demand Planning Manager
The first few years of this decade have seen unprecedented supply chain issues. PHOENIX worked through extraordinary circumstances to remain a valued packaging supplier to our customers. The last few years provided many lessons to be gleaned from unique challenges created by a global pandemic, a blocked canal, a 100-year winter storm, and other once-in-a-lifetime events that created a whirlwind of challenges from 2020 until now.
At the heart of PHOENIX’s supply chain management is clear communication. Forecasting what our customers will need stems from a sincere interest in their business. We pride ourselves on being a valued partner that goes beyond the basic transaction of taking orders and shipping products. By understanding our customers’ business needs, we strive to stay a step ahead and anticipate what is coming down the pipeline. Understanding unique circumstances such as seasonality, promotions, or shutdowns is vital for managing the supply of our customers’ plastic closures.
Accuracy and current information are key to proper forecasting. Having historical data allows us to predict the future when a customer forecast is not available. Conversely, we provide feedback and analysis of our customers' activities to ensure that perception and reality align. Occasionally, customers are surprised to discover discrepancies between their forecasts and the amount of product that was purchased. Supplying plastic caps for a brand-new product entering the market can be especially challenging when no historical data exists.
PHOENIX offers a variety of stocking programs to meet the diverse needs of our customers’ businesses and the products they manufacture. Forecasting how customers use our closures versus how they pull the product requires a combination of historical data and analysis to find the best program fit. Prioritizing items essential to the global market and our distributor stock ensures that high-demand items are on the warehouse floor and ready to ship at a moment’s notice. Communication with our customers helps maintain the correct amounts of product in the warehouse through programs such as the Re-Order Point stocking program, where we set a floor minimum and reorder when items fall below the threshold. In specific circumstances, we can devise programs that allow us to make and hold a specific quantity of closures when the customer agrees to pull from the held quantity as specified in an agreement.
The last four years have seen wild swings in supply chain demands. At PHOENIX, we have witnessed new trends alongside a return to pre-pandemic patterns. The mass overbuying during the pandemic took quite a while to level out. Volumes have stabilized and we are now seeing more typical growth patterns. However, customer inventory levels remained high through 2022 and into early 2023. These inventory levels continue to be fluid as we observe a “bullwhip” effect, shifting from just-in-time demands, to just-in-case levels and now returning to just-in-time demands. These fluctuations are putting a strain on global supply chains that may not be prepared to respond to new increased demand.
At PHOENIX, we have mitigated these demands by adding additional raw material suppliers and analyzing the differences between the various markets our customers serve, such as food service, consumer packaged goods, and the vitamins, minerals, and supplements markets. We also expanded our capacity to support both pandemic and future post-pandemic demands, which continues to allow us to support our customers today. The future of PHOENIX’s trend and forecasting strategy is to move to a more dynamic demand planning approach over the next three to five years. We have enhanced our technology to leverage AI and improvements in data analytics to assist in identifying trends, patterns, and making predictions.
We continue to innovate our supply chain management and forecasting abilities to meet our customer needs. The PHOENIX procurement and scheduling teams are a best-in-class group of professionals that work in tandem with the sales and customer success teams to make our customers’ supply management as seamless as possible.
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