Tis' the Season of Candies: What We Didn't Know About the Christmas Candy Supply Chain

In the United States, there is such a thing as Black Friday, known for the day of the year when the US retailers
hit lots of profits for the year. It is perhaps the busiest shopping day in the year. However, perhaps the most
important holiday of the year is Christmas.

For retailers, managing the customer order cycle supply chain management is a never-ending task. If it isn’t the
end of one season, then it is the beginning of another or a public holiday, for which there needs to be supply
chain readiness. During Christmas however, the stocks need to be full, and everything needs to be ready for the
season’s shopping, or companies end up in the public naughty list. A company named John Lewis knows this
fully well as 80 percent of its yearly profits comes from Christmas season. In many retail sectors, Christmas
supply chain readiness is the thing that determines if the company is in good health or not.

Nestle, for example, has recently said ahead of Christmas that it is experiencing supply chain problems. Its chief
executive, Mark Schneider promised the UK public that Nestle is working hard to stock the shelves this season,
however several sectors have had problems with their supply chains due to a shortage of Heavy Goods Vehicle
(HGV) drivers.

Another staple of Christmas is the candy cane which is in crisis as of 2021. There has been a shortage of
peppermint crops harvested due to COVID 19. Raw material and ingredient shortages have weakened the supply
chain and ensured that supply chain readiness for the big candy industry is out the window. Most stores only
received half their candy cane supply this year and sold out almost immediately.

During customer order cycle supply chain management, the biggest challenge retailers face is varied from sector
to sector and company to company. Some specialty retailers have to contend with long lead times, where for
others the challenge is estimating the season’s demand correctly and ahead of time. But for grocers, the problem
is different. They have to do capacity planning so that the volume of goods is correct and executed properly.
Some retailers view Christmas as a non-important holiday and their sales either stay stagnant or drop.

Customer order cycle supply chain management is in fact a huge challenge and very little is written about it.
However, there are many hurdles to cross. Candy supply chain management becomes extremely important here
while crossing these hurdles. The process needs to be continuously improved, and each area of the problem
must be explored one by one rather than trying to solve all problems at once.

Indeed, when the New Year’s is over, it is time to start planning for the next Christmas where retailers must
begin planning what to sell, how they should source what they sell and where they source it, when they should
buy it and how much they should buy. Lead times answer how long before Christmas should a retailer plan, but
it is a long time before. Proper candy supply chain management means retailers will ensure that products arrive
on shelves on time and in the right quantity. Depending on the product, the actual length of the season varies for
it. For example, fresh food products will move off the shelves just a few days before Christmas, while other
things such as toys, books, clothes, electronics, might be packed well before December, early December or
during the entire year even. The highest demand for the latter products will register a week before Christmas.
Where candy supply chain management can go wrong is when it comes to ramping down.

There needs to be end to end visibility in supply chain. Long lead times are expected for clothing and electronics
in the west as they ship products and goods from the Far East. Before any Christmas sales data is even planned
to be released, the orders are placed. In other holidays, like Thanksgiving Day, long lead times are expected for
turkeys which is a grocery item. Other products have a shorter lead time like for example chocolate. So, what
happens to candy factory traceability?

Christmas causes an insane peak in demand for chocolates so there are naturally preorders that are filled in
advance and help increase candy factory traceability and end to end visibility in supply chain where retailers can
plan their production. Sometimes customers might place extra orders closer to or during the season.

Wherever there are products that have a sales history and there are figures from the previous Christmas season,
candy factory traceability and end to end visibility in supply chain increases as it becomes easier to come up
with accurate forecasts and predictions for the upcoming season. Specialists can then forecast and adjust based
on their expertise and factors that are not present in sales history, if adjustment is needed.
Let’s say that the seasonal product selection was the same each year. Do you think Christmas would be as big a
challenge as it is now? No. however retail cannot survive without change and innovation and so product
lifecycles can be short, and suppliers will keep introducing new and shiny products each year. When there is no
sales history, how do we create a forecast for new products? Maybe the new product’s forecast would be like
another older product? This approach might take a lot of time and cannot be applied to many products.

This is where automation comes in. Based on defined rules, references could be selected, and forecasting could
be based on attributes of the product like genre, size, and colour. It helps if there is sales history prior to the
season. It won’t take much time and it can be used as a baseline and the seasonal pattern can be adapted from
items in the same product group.

Let’s say at the end of the season, there is still stock remaining. The good way to go about it, and the expected
way, is to sell out all the remaining seasonal stock and put the festival of Christmas behind you. This gives time
to focus on the season ahead and plan out the new year, etc.

But when it comes time to plan out next Christmas, it is important to remember that there was stock the previous
year that was still to be sold. Usually, retailers skip thinking about the next Christmas as soon as one is over. But
if they want to keep making profits and not fall into the trap of repeating the same mistakes again and again,
they must remember lessons from Christmas past so that their Christmas present and Christmas future can be
good.

Keywords:

1. supply chain
2. candy factory traceability
3. candy supply chain management
4. customer order cycle supply chain management
5. supply chain readiness
6. end to end visibility in supply chain