For brand owners, delivery timelines and quick accessibility to goods are essential for sustaining normal business operations. Storing finished goods in a warehouse closer to the customer facilitates shorter lead times. Not least, it increases the chance of maintaining regular lead times in the event of potential supply chain disruptions.
Several factors can cause delays in lead times for products and goods, from the time they are ordered until they are produced and delivered. In case of an adverse event, production and delivery times can increase significantly. Typical interferences that affect lead time include:
- Frictions in the supply chain at home and abroad
- Shortages of machines and components
- Miscommunication
Acquiring facilities close to where the customer is located is a measure that can help counter the factors contributing to prolonged lead times.
Shorter lead times in Sub-Saharan Africa
To reduce lead time, Skanem Africa is establishing new warehouse facilities for finished labels in Namanve, Kampala, Uganda. Because Uganda has been and will remain an important market sector, investing in a location here will help reduce friction throughout the supply chain in Sub-Saharan Africa. The warehouse will be a part of Skanem Interlabels Uganda and will help enhance customer’s experience in three ways:
1. Convenience
Producing goods in one country and transporting them to their destination in another means that the customer must take additional steps to receive the goods. In the case of Uganda, the labels are produced in Kenya for the Ugandan market. When the goods are transported to Uganda, customers pay VAT and need to clear the goods through customs.
Having a warehouse in closer proximity to key customers eliminates these frictions in the supply chain, as VAT and clearing are already processed when the labels arrive. They can be transported directly to the customer.
Read more: How much should your labels be able to endure?
2. Reducing working capital and cost
Most customers typically order in bulk from Skanem to cover, for instance, two to three months of the required goods. That ties up customers’ working capital in the form of stock of labels they hold.
With a new warehouse in Uganda, customers can send an order and call off the labels they require, for instance, every two weeks instead. Consequently, this reduces the cost of stock holding and, thus, lead time as well.
3. Using local currency
Having the goods available locally means that any purchase can be made using local currency. Therefore, having a separate facility in Uganda, Skanem can operate using Ugandan shillings. This is particularly beneficial when there is an acute shortage of dollars in Sub-Saharan Africa.
Read more: A guide for choosing cost-efficient and sustainable label materials
A new warehouse will be up and running shortly
Skanem Interlabels Uganda Limited has already been incorporated, with office spaces and warehouse capacity for finished goods. Although Skanem has been present in Uganda for the last four years with a sales presence, this is a next step towards enabling faster and better lead times and services to all our customers in the area.
If you need further information about lead times, feel free to contact us.
