With people hungry for handwash, Scrubbingtons looked at the dwindling stocks in its supply chain and took a financial gamble. Here’s the company’s story.
Co-founder Emma Cranstoun first noticed things changing through Tesco’s buying reports – sales reached ten-fold their usual level.
“It was during that week of panic-buying in March. Tesco provides reports the day after sales and we could see crazy numbers and products going out of stock and then it started to follow suit on our website,” she said.
Working with their supply chain and understanding when to take financial risks was crucial to capitalising on the demand.
Talk to everyone in your supply chain
The team was glad of the sales but struggled to meet demand. The biggest issue was having enough stock, so they started by talking to their manufacturer and the supplier of components like bottle pumps.
With lead times getting longer and longer and changing daily, being responsive and prioritising the stock they had was vital. Emma was in daily conversations with both the manufacturer and her chairman to discuss what was available and where to send it.
“Everybody was under such pressure, so we had to take a real partnership approach. Tesco was really understanding and took everything we could supply. We sent them as much as we could, but it was important to us to keep our website in stock because that’s where we get to interact with our customers and build our community,” she said.
Know when it’s time to take a financial risk
As a business that always has an eye on cash flow, Emma needed to review forecasts on a daily basis. But, with such a rapidly-unfolding situation, she also had to make some quick and bold decisions.
The team took a financial risk and decided to over order componentry. It paid off – with the subsequent lack of availability and sustained customer demand, it allowed them to keep responding to orders.
“It was a crazy time. Everybody was readjusting and businesses had to take a brave mindset. We decided that we would just have to fund it somehow – whether that was through an overdraft or going to our funder – because it was such a great opportunity for our business. Making brave decisions like this at the beginning have helped to see us through,” she said.
Soon afterwards, the government announced its Bounce Back Loan Scheme and the business applied for the maximum amount it could. The money was in the company account within 48 hours, giving Emma and her team a much-needed financial buffer.
Solving supply chain problems
While the “frantic mode” has now passed, Scrubbingtons is still facing supply chain problems. Because it’s so difficult to get hold of componentry – wait times have increased from eight to 12 weeks pre-lockdown to six months – they have switched to long-term forecasts. As a result, Emma is now looking for new suppliers.
“As a small business, you find a supplier you’re happy with and build a relationship with them. You don’t really think about having a back-up, but now we really have to. We can’t work on six-month lead times, and we’ve realised that our supply chain can’t be reliant on just one supplier.”
Exploring new avenues for the business
With the increase in sales doubling the size of the business, there’s no doubt that Emma and her team can see a silver lining to the pandemic.
“We’ve been working crazy hours and it’s been difficult, but it has also given us a real boost, both financially through the orders from Tesco and through the increase in dialogue with our customers,” said Emma. “We’ve got a new-found purpose and it has re-energised us to explore new products and reach out to new customers.”
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