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Myles Bowman Sep 27, 2022 9:20:54 AM 11 min read

How Toy Manufacturers Can Solve Their Supply Chain Disruptions

toysSupply chains have a history of volatility, but in recent years, even time-hardened veterans of the toy industry have been thrown for a loop. A global pandemic, an enormous ship stuck in the Suez Canal and wild, unprecedented weather events are probably anomalies (we hope), but fuel and shipping prices, economic uncertainty, material shortages and global political upheaval are unfortunately relatively common.

That means, of course, that supply chain disruptions are not likely to disappear completely, ever. In fact, the short-term outlook is somewhat nerve-wracking, considering the United States is experiencing the highest inflation in more than four decades, according to the U.S. Department of Labor Statistics, and the Russian invasion of Ukraine is further exacerbating the global supply chain crisis.

What it all boils down to is this: supply chains are unpredictable.

Toy manufacturers have felt the effects of longer lead times, increased costs across the board, lack of container availability and labor shortages. The major shipping ports are Los Angeles and Long Beach, and many toy manufacturers struggle with warehousing costs and distribution.

Though the toy industry is experiencing stellar sales numbers now, a closer look reveals that it’s likely due to fewer toys being sold for more money, which isn’t necessarily sustainable. Therefore, it’s important for toy manufacturers to protect their business by getting out in front of potential issues. One of the best ways to do this is to have a strong supply chain strategy.

Here are some ways you can ease your supply chain woes through proactive planning.

Know When Demand Increases Are Likely

You probably have a strong grasp on your sales cycle, with a huge spike hitting every year in the U.S. right around November and December. Depending on what types of toy(s) you manufacture, however, you likely see peaks and valleys throughout the year. For example, water toys usually see an uptick ahead of the summer, while sleds and snow toys ramp up just before winter. 

A little less predictable, you may see some market indications that your toy is becoming more popular and demand is rising. It’s important to keep a close eye on this so that you can be fully prepared and notify your supply chain, order parts and materials early and perhaps even stock additional inventory if an increase in demand is likely. That way, you (and your customers) won’t be stuck playing the waiting game.

Track Your Inventory

Speaking of inventory, it’s vital to keep track of it at all times. Having full visibility into your inventory’s whereabouts, status and timing expectations will help you understand what you have available for customers and when. You’ll also have a much better idea of when you should be placing orders and increasing or decreasing your manufacturing.

Thankfully, technology has improved considerably over the past several years to allow for real-time inventory management and insights. Finding the right fit for your business will keep you moving smoothly, even if—when—supply chain hiccups occur.

Create a Backup Plan (and Document It)

Nothing ever goes exactly right 100% of the time. Even the best laid-out plan to get all parts and materials where they need to be on time will occasionally get derailed (so to speak). Contingency planning will help you know the next right step when something comes up.

When developing your backup plan, here are a few things to consider:

  • Start with open conversations with your existing suppliers. This helps you determine who your go-to sources will be—those who can pivot with you, allowing for flexibility in contracts and payment terms.
  • Identify backup suppliers in the case of an emergency. Know your B-team and understand their requirements so that you can turn to them at a moment’s notice if you need to. Have honest conversations with them so they are aware of your plans.
  • Know your insurance policy. Contingent Interruption Business Insurance can often help protect you from lost income if key suppliers are unable to get you the materials, services, parts or products you need. Talk to your agent to make sure you have the appropriate coverage.
  • Set aside time for a regular supply chain plan audit. Whether it’s quarterly, semiannually or annually, it’s important to schedule and adhere to regular audits to determine whether the current strategy is still relevant, comprehensive and effective.

Have a Customer Communication Plan in Place

Your customers are your lifeblood, and it’s important for them to know if they will not be getting the toys they’ve purchased in the time they expect. Create a strategy that details exactly how you will communicate with your customer base if an issue arises, focusing on as much transparency as possible to manage expectations and protect your reputation and brand loyalty.

Partner With a Trusted 3PL Provider

Third-party logistics (3PL) service providers are invaluable when it comes to navigating supply chain disruptions. With their large networks of qualified freight carriers and deep industry expertise, 3PL providers can help with:

  • Warehouse staffing
  • Real-time alerts and full supply chain visibility
  • Transportation management
  • Ecommerce order fulfillment
  • Multichannel and retail distribution
  • Streamlining processes and identifying inefficiencies
  • Stable costs
  • Affordable storage prices
  • Strategic warehouse locations

Recently, G&B Fulfillment (GBF) helped Fashion Angels, a toy manufacturer based in Milwaukee, Wisconsin, overcome major supply chain challenges, including cost increases and skyrocketing lead times. During the pandemic, Fashion Angels saw a huge increase in demand as more families were staying home and online shopping increased. At the same time, the supply chain crisis ramped up, and Fashion Angels struggled to meet demand.

The toy company partnered with GBF, whose decades of experience in retail support and 360,000 square feet of warehouse space in Southern California were a great fit for Fashion Angels’ needs. With GBF’s support, Fashion Angels no longer had to navigate the complexities of warehousing logistics and could instead focus on their rapid business growth. Shipping time went from two months to two weeks, and the toy company was able to save about one million dollars per year thanks to the coastal warehouse location.

If you’re a toy manufacturer looking to protect yourself from supply chain disruptions, we can help. GBF is a 3PL provider with a stellar track record of helping businesses like yours manage the ups and downs of their supply chains and streamline their operations.

For more information, contact us today.

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