Friday afternoon saw a large number of suppliers and retailers from the UK, European and global toy community attend the webinar.
Entitled Supply Chains, Transportation and Toys: thoughts into the future, the session was a collaboration between Toy World, the British Toy & Hobby Association and The Toy Industries of Europe.
For those who missed Friday’s webinar, you can now download a recording of the event via this link.
Attendees heard from panellists Dr John D Mangan, who holds the chair in Logistics at the School of Engineering, Newcastle University and Iain Prince, who heads up KPMG’s Supply Chain team. Both panellists pulled no punches about the challenges that still lie ahead, while also suggesting that the worst of the volatility, poor service and huge price rises may at least be behind us.
However, anyone hoping that shipping costs will return to pre-pandemic levels any time soon were soon disavowed of that notion: it was generally felt that container prices will fall slightly in 2022, but would settle quite a way above the low rates that suppliers enjoyed back in 2019. John Mangan pointed out that the shipping sector is notoriously slow to change, and that global pressure for the logistics sector to go green would ultimately have to be funded by the companies using the shipping services, rather than the shippers themselves.
Reinforcing that the problems of increasing costs and unreliable service have affected all consumer goods importers, not just toy companies, Iain explained that new shipping capacity would not be coming on stream until 2023, making any significant rebalancing in the ‘supply and demand’ equation unlikely next year. He also gave examples of strategies that toy companies can use to make their supply chains more resilient, including taking a far more proactive role in assessing daily developments, suggesting: “By all means outsource , but don’t abdicate responsibility.”
Both men agreed that labour shortages across the entire supply chain – not just in the UK, but in Europe and the US too – would continue to be an exacerbating factor, hinting that it could take three or four years for the global labour market to rebalance. There was also a consensus amongst the panellists that companies should take this opportunity to review their business and operating models, looking at where their suppliers are located, possibly spreading the risk by extending the manufacturing base, or even by importing components and assembling them here in the UK. Reshoring was discussed, with an acceptance that exploring factories in countries closer to home could prove beneficial in certain cases, with extra labour, shipping and distribution costs from China potentially offsetting traditional savings made by sourcing in the region.
One thing is for sure: the supply chain challenges we have seen this year are not going to disappear overnight, and suppliers and retailers will need to continue to look at managing their supply chains and planning carefully – especially with regard to how much is bought and when orders are placed.
With the situation likely to remain in flux for some while, Toy World, the BTHA and the TIE have all agreed that further webinars next year may be helpful to keep the toy community abreast of future developments, and we will keep you posted on future activity on this subject.