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

Dec 24, 2021

We love candy! We buy loads of them during the Christmas season whether it is to consume it ourselves or to gift them to others. Candies just taste better during the Christmas season, isn’t it? But how does the candy supply chain work? How can we make it better? There are many issues in the candy supply chain management that we probably unsee because of the sugar rush.

Different sweet candy, jelly and candied in a bowl.

For retailers, managing the customer order cycle of candy 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’s junk list. A company named John Lewis knows this fully well as 80 percent of its yearly profits comes from the 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 candy 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 speciality 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. Lead time means the time from the moment the customer places an order to the moment it is ready for delivery. Supply Chain logistics for candy companies provide end-to-end traceability solutions for candies and confectionary companies.

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. Supply Chain logistics for candy companies are expanding their business to new horizons rather than remaining stagnant in the already existing markets.

Indeed, when 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. Supply chain logistics for confectionary companies are extremely important as they are perishable and delicate food items. 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 the 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. On 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 and candies so there are naturally pre-orders that are filled in advance and help increase candy factory traceability and end to end visibility in the supply chain where retailers can plan their production. Sometimes customers might place extra orders closer to or during the season. Supply chain logistics for confectionary companies are needed to deliver the right products in the right quantity, in the right place, at the right time.

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 the 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 an 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 blockchain comes in. A blockchain platform would serve as a potentially open-source platform where users can share data and competitors can then work together to share data, information, resources and other information. For example, if there is a possibility of a storm incoming that could disrupt the supply chain process, the blockchain platform can be used to share information.

MSRvantage Blockchain Solutions can greatly improve supply chains by enabling faster and more cost-efficient delivery of products, enhancing products’ traceability, improving coordination between partners, and aiding access to financing. Blockchain can help avoid frustrating inventory errors and execution errors, missing shipments and duplicate payments which become impossible to detect in real-time. Finding the source of the problem after-the-fact also becomes quite difficult.

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.

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 imagine a new future with blockchain to help make predictions and keep track of inventory. Businesses must remember lessons from Christmas past so that their Christmas present and Christmas future can be good. Hence, Ho Ho Ho! blockchain is the way to go!

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