Forecasting in times of uncertainty: a supply chain update from Jim Segredos

Supply chains are an integral part of any business, ensuring the smooth flow of goods from manufacturers to consumers. However, forecasting and managing supply chains effectively can be especially tricky in times of uncertainty.

In this article, Seima’s Managing Director, Jim Segredos, explores the challenges faced by businesses in forecasting supply chain needs, and what Seima is doing to ensure a smoother and more efficient delivery of stock to its customers.

The challenge of forecasting

One of the primary challenges in managing supply chains is accurate forecasting.

“Uncertainty in the market often leads to reduced stock levels among suppliers due to the risk of oversupply, which we acknowledge can have a significant impact on the overall supply chain,” Jim says.

To mitigate this challenge, Jim says it’s important to keep in close contact with suppliers to ensure that they’re able to support you.

“What’s been happening globally is that a lot of the manufacturers are slowing down, in light of the demand profile changing. It’s a two edged-sword, because they either have capacity, or they need advanced warning or time to ramp it up,” he says.

“So the best way to overcome this is to be clear about your timelines and communicate this with your suppliers so they can help.”

Meeting the market

The housing market plays a significant role in the overall economic landscape, particularly when it comes to Seima’s products.

“While fiscal responsibility measures, such as increasing interest rates in order to drive down inflation, aim to stabilise the economy, the government is also bringing in a record number of skilled immigrants, leading to a major shortage of housing,” Jim says.

“The resulting demand exceeds the available stock, driving rental prices to record highs and making it near impossible for Australians to buy or build their own homes.

Jim says that this is not only impacting supply chains due to risk mitigation, but it’s also impacting product lines.

“With state governments now incentivising first home buyers by providing more stamp duty options, I’m confident that there will be light at the end of the tunnel, it’s just a rocky path to get there.”

The key to getting through it is understanding what your customers’ needs are, and meeting them.

Unsurprisingly, the luxury market appears to be less affected by changes in interest rates. While the broader market experiences fluctuations, the luxury segment continues to thrive.

“There’s been almost zero impact on the luxury market, it’s not bound by changes in interest rates, so our product line at the higher end hasn’t been impacted,” Jim says.

“We have, however, been working on a new range for the luxury market and also a more cost effective range that will better suit first home buyers.

“It’s all about meeting your market.”

Saved by freight

The cost of international freight has become a topic of concern for businesses. Although prices have reduced to pre-pandemic levels, Jim says this has simply balanced the books.

“While freight costs have decreased, the cost of materials and domestic freight within Australia has increased,” he says.

“So while our prices haven’t gone down, we feel they’ve remained stable, as the reduction in international freight has offset all of the other costs that have gone up over the past two years.”

Ultimately, Jim says that managing supply chains effectively in an uncertain market requires a proactive approach from both supplier and customer. 

By staying agile and proactive, businesses can overcome challenges and ensure the smooth flow of products in spite of supply chain fluctuations.

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