Supply Demands

Unicorn Ingredients manages the complicated logistical demands of its business by keeping focused on three key supply chain priorities.

As a business that operates in 34 countries globally and sources a complex range of seasonal products, Unicorn Ingredients must maintain a highly-sophisticated supply chain. And it is a supply chain that must be robust enough to be tested by harvest failures and natural disasters such as the recent devastating volcano in Guatemala.

Unicorn’s supply of sesame seed was hit by the disaster, says Alasdair Brookman, Unicorn’s supply chain coordinator. He comments:

“The first priority in the aftermath of any such event is to make sure that all our contacts in the affected area are safe and well. We then work with our suppliers and shippers to make sure that supply continues as much as possible. While your suppliers may be able to carry on as normal, the transport network between them and the port may be severely disrupted.”

Unicorn also mitigates the risk of supply chain crises by maintaining a set level of safety stocks in its various warehouses worldwide. It has warehouses in the UK, Ireland, Germany, the Netherlands and Belgium, all run by third parties. However, maintaining the balance of buffer stocks while minimising warehousing costs is one of the many challenges it faces.

Unicorn Ingredients has three focus areas for maintaining its supply chain excellence, says Brookman: Planning and risk management, Cost control and product and service quality.

Product and service quality are paramount. Unicorn has preferred supply chain partners in each country it operates in, who are rigorously approved before it starts doing business with them.

“A large number of these partners have worked with us in one form or the other since the early days of the company. We take pride in the fact that only product that meets our high standards is allowed into our supply chain – we hold our suppliers to the same standards that our customers expect of us.”

This does mean that any product that does not meet standards will be removed from the supply chain, which can increase the lead-time for getting product from origin. However, Unicorn has satellite offices in China and India, where many of its key products are sourced from, which helps it to manage sourcing challenges and monitor quality direct with local suppliers. Costs and over-expenditure are also monitored closely, and this data is used to pinpoint any inefficiency in the supply chain and used as a starting point for any improvement, Brookman says:

“Unicorn needs to supply the right quantity of the right product, of the right quality, to the right place at the right time at the right price. We plan to achieve this while incurring the smallest possible cost; however, an inefficient supply chain will allow those costs to skyrocket to maintain customer satisfaction.”

As the market is dynamic, and the supply chain fluid, Unicorn must periodically review its risk management strategy to ensure that new threats are taken into consideration. Every opportunity to further control costs must be taken, he says, as well as every opportunity to streamline the supply chain. At the moment, about a quarter of supply goes direct to the end customer, cutting out warehousing costs. Brookman comments: “The main benefit of delivering direct to the end customer is that it tends to be cheaper. However, we appreciate that for a lot of customers, it isn’t convenient, or even possible, to receive direct containers, so we do whatever the customer asks. We have had customers switching from direct supply to the added security of the stock being in a warehouse, and customers switching from store supply to the cheaper direct option.”

For the future, Unicorn is pushing for all warehouses that it uses to have real-time online inventory management, to allow it to check stock and compare levels with its records at any time of the day or night. One path for the future might be picking the stock for a delivery from its own office, while issuing delivery instructions to the warehouse.

Brookman also expects to see better traceability in warehousing, as pallets of goods will be tracked by barcode to the exact space in the warehouse that they were stored in the future. Globally, the rise of automation such as self-driving lorries, automated warehouses and drones will undoubtedly improve the efficiency of the logistical process. For now, however, Brexit is casting a long shadow over the UK. Brookman comments: “With Brexit, and the lack of clarity currently, it makes it extremely difficult for any company with links to the UK to plan for the future.”