We talked about some ways that businesses can be more child-friendly. However, we wanted to talk about the challenges businesses that make equipment for children need to currently navigate.
One of the issues that playground equipment businesses in particular need to deal with is supply chain problems. These issues have affected 60% of all businesses and playground equipment makers are no exception.
Since the pandemic, supply chain setbacks have plagued virtually every industry that relies on natural resources or manufactured goods. First, there were the toilet paper shortages that plagued grocery stores in the spring of 2020. Then, there was the 2021 Suez Canal obstruction, during which a grounded container ship blocked transport for six days. Ever since, many industries have fluctuated between overstocks and understocks, never sure if they’ll have enough or too much.
The playground equipment industry is no exception to the problems that continue to plague the supply chain. J.P. Morgan talks about the issues affecting businesses as a whole in this article. Shortages in natural resources like lumber, steel, and plastic — as well as any part that arrives from overseas — can cause delay or stop manufacturing. Shipping route blockages, geopolitical conflicts, and natural disasters can also cause bottlenecks and major disruptions. Still, many enterprising manufacturers are finding ways around these setbacks. Here’s how:
Expanding Product Portfolios and Using Alternative Materials
Many playground equipment materials are diversifying their product portfolios and constructing equipment with a variety of materials. For example, they’re creating multiple different types of swings, so that they can sell whatever is available. These companies make themselves more resilient to change by offering a variety of options, in case one can’t be stocked. A buyer might be disappointed to find their first choice isn’t available, but they’ll still always find alternatives.
For example, say there’s a shortage of the galvanized steel that would typically be used to construct a metal swing set. If this equipment maker has a limited inventory, or uses this steel in every product, they’ll run into serious problems. Instead, they can sell a variety of swing sets made of alternative metals, wood, or plastics. That way, even if one popular item is missing from their catalog, they still have plenty of other products to offer their shoppers.
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Diversifying Suppliers
One smart strategy is to contract with multiple suppliers, ideally in different countries on shipping routes. Many companies that have traditionally gotten all their resources, parts, or products from Chinese suppliers. However, more companies are now sourcing for alternative countries from which to get their raw materials or even finished inventory. Some popular alternatives include India, Vietnam, Turkey, Mexico, Malaysia, and Indonesia.
While some countries may charge more, the value is in the consistency they can provide. Sourcing products from different regions and on different trade routes means one supply chain hiccup isn’t necessarily a crisis. Since the playground company already has relationships with each supplier, they can increase volume with one when there’s a problem with the other. Even if they can’t quite stock up fully, at least there’s always something coming down the pipeline.
Domestic Production
With the supply chain in constant flux and the threat of tariffs on the horizon, many companies are moving toward domestic production. They’re building factories on U.S. land, switching to homegrown suppliers, and reducing their reliance on foreign goods. Some companies that have their own factories abroad are even moving their machinery home to the U.S. To all their products, they’re adding “Made in USA” stickers that can increase popularity with consumers.
There are some inherent challenges, however, to producing playground equipment stateside. First and foremost, some materials, like rubber and certain pigments may not be available or as affordable when procured locally. Labor laws and talent shortages can also make it challenging and quite expensive to find and employ skilled workers in the U.S. However, the costs may be worth it in cases where they are likely to mitigate the risk of production disruptions.
Supply Chain Management Platforms
One of the most important ways that playground equipment makers are navigating supply chain issues by using advanced supply chain software. These new platforms — many powered by AI — can analyze historical data and anomalies to accurately predict future demand for any particular product. Then, they can make recommendations about how much of each item to order, and when, to prevent stockouts without overstocking or overspending on inventory.
The costs of stockouts and overstocks can be dramatic: order too much, and you tie up capital and spend unnecessarily on extra storage space. Order too little, and you risk disappointing your customers during peak periods, losing sales and revenue and damaging trust in your brand. These platforms help playground companies reduce these risks by recommending a “just right” amount of stock. They can even calculate inventory across channels, for example in-store and online.
Advanced Predictive Analytics
More sophisticated supply chain software systems go a few steps further, predicting now just inventory but events. Some of the more advanced systems in development can accurately gauge when a supply chain disruption will occur, and how to prepare. For example, they might be able to predict a hurricane before it happens, or spot a war before it breaks out. They can then recommend an alternate shipping route or supplier to order from prior to the event occurring.
Some forecasting models, for example, can analyze news stories to predict the possibility of a geopolitical conflict or other crisis event. They do this by studying particular words used and the frequency with which they appear across a variety of news outlets and other sources. Such algorithms can spot patterns that develop over time, to identify shifts in popular sentiment. These shifts can indicate increased potential for events like political conflicts and economic crises.
Diversifying for Resilience
To meet demand from cities and schools despite supply chain disruptions, playground equipment makers need a multi-pronged approach. They need to diversify their suppliers, shipping routes, product offerings, and digital strategies to attack the problem from all sides. Consider the arteries of the body: when there’s a blockage, they often rebuild themselves to go around it. The idea is to add more routes, more options, and more alternatives, in order to keep things moving.