How Successful DTC Brands Handle Sudden Supply Chain Shifts

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Welcome to Supply Chain Moves, the podcast by Move Supply Chain where we dive into the real stories, real strategies and real solutions powering DTC brands. I'm your host Lara Guevara, CEO of MOVE Executive Coach and your go to guide for mastering Supply chain. Today's episode is the one about navigating big shifts in supply chain. We've all seen it. The industry has changed dramatically. From COVID disruptions to geopolitical tensions to trade wars. Supply chains are more dynamic than ever and today I'm joined by a supply chain expert, Claude Ganta, our Operations Director in Movement. We are talking about what's changed, what we've learned and what DTC brands should be doing now to stay ahead. Before anything else, I would just like to share that Claude and I worked together for a very long time in a company here in the Philippines and now we're working again together. Claude, if you can share more about your experience so that people can learn more about you.

Yeah, thanks for having me in this podcast podcast Lara. Well, I've been in in the supply chain industry for over a decade. I started my career in a third party logistics in a multinational company as Supply Chain Solutions Analyst and then later on as I go along I handled managerial position, leadership position and then we worked together in Human Nature and then after that I handled executive position in the GPL industry here in the Philippines.

Thank you for sharing that.

I am a mom of 3 year old toddler and a happy wife.

So let's start from the top. When we say big shift, what do we actually mean? What are some of the most significant changes in the supply chain that you've witnessed in the past five to ten years?

Okay Lara, one of the biggest shifts I witnessed was during the COVID era. But even before that in 2019 I attended a conference in Singapore called Home Delivery Asia. I remember clearly how the discussion forecasted that E commerce and urbanization would dramatically reshape logistics in Asia within the next five years. I didn't expect it would accelerate just a year later in 2020, I was in Human Heart Nature Gandhan Kalikasan, where we worked together when Covid first broke the news. The initial wave hit our domestic operations and community based suppliers very hard and I saw firsthand how vulnerable our fulfillment model was under lockdown. That experience shaped how I would later lead major supply chain transformations. By the time I joined Airspeed as Chief Supply Chain Officer, the need for agility was undeniable. Officer lockdowns, manpower limitations, congestion at ports and volatility and transportation Lead times. Many of our B2B and B2C clients had to pivot fast. What stood out was the sharp rise in demand for E Commerce fulfillment. We responded by setting up a dedicated E fulfillment business unit that supported not just local but also international DTC brands entering the Philippine market. This meant implementing new warehouse processes, digital integration and last mile partnership. We also experienced the shift from just in time to just in case. Firsthand clients suddenly wanted buffer stock and we had to adjust tracking zone allocation and receiving calendars accordingly. In some cases, the increase in inventory volume and E Commerce demand led us to acquire new facilities to accommodate the surge. The volume, the freight volatility also pushed push us to reconsider packaging sizes and bundle configurations to protect margins while maximizing container capacity.

So as for me, when I was in my first work after graduation as a purchasing officer in KFC Tokitokyo and Mr. Donut, we had very simple supply chain disruptions at that time. Like the rising cost of oil. One one of the biggest disruption I've encountered during that time so that's 22,009 onwards. So was when cocoa powder was out of stock. Oh wow. So our cocoa powder from Malaysia and other countries are out of stock and then we have to go to Davao. So that was my first out of town trip as a supply chain purchasing because Davao has been producing locally cocoa powders and we didn't know. So we are getting from, we're importing and we have local source. So from there it's a huge shift from the disruption of COVID 2019 because at that time I was already in E Commerce. And the funny thing is everything is coming from China. We had Chinese New Year so January, February and then they had a long vacation for that CNY and they didn't come back. So that was like the second DTC brand that I supported and. And it was like a different challenge for all of us. Like how do we send out all our finished goods? How do we still continue to work with those vendors. We were really just unsure what's going to happen in the next next few weeks or months. We keep asking the vendors when are you coming back? When are you doing this? What are the shift. But in between those situations I also was, I also had experienced the first wave of section 301. The tariff increased which is we is a huge, huge which has a huge impact to our DTC brand. So from there it keeps on having like smaller shift. But definitely those were the biggest and I think now what happened in the tariff lately was again the the next one. It's just a good thing that our clients in Move Claude are not just us.

Yeah, right.

We have uk, Australia and other countries. How did those changes affect DTC brands in particular?

Well, DTC brands were hit hard because many relied on lean inventories and had minimal room for error. The delays exposed gaps in forecasting, fulfillment coordination and customer service. The shift toward localized fulfillment became real and those who adopted quickly saw improvements in conversion and repeat purchases. For international DTCs expanding into Southeast Asia. We had to become their ground support, offering everything from customs coordination to last mile dispatch under one umbrella. That's why we have move. You establish MOVE supply chain. And most importantly, we recognize the critical role of frontliners from warehouse pickers to truck drivers whose quick thinking and dedication allowed operations to continue despite restrictions. Their resilience and commitment were the backbone of many clients success stories during this period. It was during the time that I also deeply realized how supply chain functions, often working quietly behind the scenes, are actually part of of the country's essential services. From fulfilling hygiene essentials to keeping food and medicine moving, our industry became a silent but critical pillar in national and even global resilience.

We actually experienced so many mistakes and challenges, but learned so much lessons during that time right when we were pushed to really be creative on how to solve situations. I'm quite thankful that my area of expertise at that time is not as complicated as yours Claude. Because for me it's sourcing and new product development and what happened at that time. So let's focus on Covid. What happened at the time is globally we can find source because everyone is struggling. So it's not like it's a per country situation. I mean in the beginning it's just China, but eventually it became a global situation. And it's like we were challenged to find solutions in sourcing, but we can only do so much. But with the actual stocks that we have, the limited production logistics will have to manage all of those. And given the lockdown, I cannot imagine how. Being a frontliner at the time is very challenging. Definitely.

I'm literally having a goosebump right now. Looking back those period, more than the logistics, the supply chain, of course the health, that's the number one priority for, for our frontliners at time. Making sure that, that our people, the frontliners has the, you know, protect the personal protective equipment, the PBEs as they, you know, as they deliver our goods. Because during that time I was with human nature and we're part of FMCJ where that Company has the essential goods that need to be delivered to the consumers.

As a very basic example, in my experience, I became very. I had a huge fear during the pandemic. I didn't go out and everything was ordered online and everything is delivered even grocery for me, meat, all different kinds of products were delivered at home. And so without that.

Right.

It's like they were the frontliners who. Who's trying to of course make a living and continue. But definitely logistics is one of.

It's part of the essential. Yeah, yeah.

For me they lifted the heaviest part during the pandemic. And like we have a limited stocks but we have to distribute. I remember having unlimited stocks in masks, PPEs, other medicines and logistics has to. They don't have a choice, but they have to deliver it. Remember the first round of vaccines we were also delivering each country. It's logistics.

Yeah. And we have to figure out, you know, the temperature controlled, how we are going to deliver vaccine without, you know, geoparadizing the quality of the vaccines and all. The logistics company has to figure out how are we going to deliver the vaccine with temperature sensitivity. Those are a lot.

And yet in E commerce and dtc logistics was the last priority of everyone. And just to just to prove that before Claude joined us February, we don't have logistics offering move. We have sourcing, we have inventory planning but we didn't do anything in logistics and warehousing side. Mainly because that's not my expertise and Gleise's expertise. Gleise's expertise is also in sourcing and new product development and Venus expertise is in inventory planning. Like non no projects has started before you join us. All right, so looking back, what were the hardest lessons you had to learn when it comes to supply chain or that you saw your clients facing right now?

Yeah, I believe one of the toughest lesson is that agility beats perfection. We had plans, but disruptions required replanning often daily. I also learned that system adoption is only as strong as your people. No matter how good your tools are, if your team is not trained or empowered, execution will fail. Also I saw how DTC brands who treated their suppliers like true partners that were able to bounce back faster. Transactional relationships fall apart in times of disruption. In many cases we found that applying one size fits all solution didn't work. So instead we focus on customizing our approach based on each client's unique supply chain set up. For instance, when one client face a major supplier fallout, we didn't just offer a replacement vendor, we did a full assessment of their sourcing, dependencies, fulfillment model and lead time risk. Then we tailored a short term, that's why we have trial services and then after having a child services we will shift to a long term solution and that long term solution will be customized again based on what we learned from the trial period which included diversifying suppliers, rerouting inbound shipments and redesigning their receiving.

Schedules and what tactics or frameworks helped us weather the storm.

Well for me as a logistics expert is it's logistics flexibility. As you mentioned during the pandemic, it's the logistics who really the backbone who delivers the goods to our consumers. I made sure our clients never relied on a single courier or route or warehouse configuration. We assess their unique logistics bottlenecks whether it was port congestion, limited DAC availability or slow last mile delivery and customize our solutions accordingly. For some this meant creating multi node fulfillment setups while for others it was about negotiating TPL service line agreement or designing inbound scheduling workflows. Demand Planning back in 2020 during my time at Human Heart Nature and we were hit by the first wave of COVID As mentioned earlier, our top selling products at that time were sanitizer and SOAP which saw a sudden surge in demand. We had to adjust our demand planning almost daily and quickly including our sourcing strategy to secure raw material amidst of the tightening global supply. We started using short rolling forecasts, layering in local mobility trends and supplier capacity checks. Later on I carried this experience into MOVE supply chain where we help DTC clients with planning retiums that respond to their specific SKU behavior and supply reliability in real time. And another thing is strategic onboarding that's very important to me the success Client Onboarding to Move At MOVE we implemented client onboarding SOPs that ensured we understood from inbound process lead time even the sourcing, new product development and escalation points before day one. And another thing is transparent communication during delays. I prioritize proactive clients updates. We always say to over report to a client which actually strengthen long term relationship. Again we cannot make a real time decision making without real time data.

And that I think is our biggest advantage in MOVE is that unlike other agencies or other businesses wherein you offer a certain product or service and it's like you have to do it until the end of the service. For us it keeps on changing even if it has to change talent, change our package. It's very quick. Do you also notice all in all supply chain is very fast paced but in dtc, in E commerce it's faster than Our corporate experience. Right. We were like in corporate we have more budget. The company has money to buy a longer store stocks for us. Like I'm for oils before I'm maintaining 90 days minimum. Yeah. But for E commerce we also have to, even if we do forecasting, we have to inform the client if there's like a budget for that. Because even if we are really good in forecasting, if they don't have cash to buy or pay deposit, then there's no good forecast to that. So it's always also connected to making sure that we are communicating consistently with our clients knowing what are their limitations. Of course we're happy if they can buy whatever PO request that we end. But in reality they don't have that very flexible cash flow. And how has your thinking evolved around forecasting or warehouse or supplier management?

Okay. We now see warehousing not just a storage layer but as a value driver for conversion. Forecasting is more scenario based using live data feeds and supplier management. It's all about partnership maturity. We don't just evaluate cost anymore. We look at their resilience, capacity to scale and willingness to collaborate. It's more about business relationship.

Did you notice a difference in relationship building from your experience before and now in E commerce?

Yeah, yeah, definitely. Like for example. Well, as you mentioned I started building the logistics service here. So it's the relationship that I do have with the partners, freight forwarder partner, I was able to bring that here in move supply chain and they know and I told them that we're catering startup business. But would you believe that in one of the brands that we're handling, which is Baboon to the moon, they were even granted as a 30 days NEP 30 for freight forwarding and even to customs duty. Would you? That's a big thing for a startup company that they were granted a 30 days credit term for freight and even paying for their customs duty because they could allot their money to what's important to the business at that time.

Yeah, I think also discussing the recent. We've been discussing COVID 19 because that was the toughest experience for everyone. But recently, especially for US brands, US clients, the recent tariff imagining, imagine having 100 plus reciprocal tariff plus plus plus plus then a lot of our clients just hold. They just hold everything in China because transferring them to the US will not only not break even but they will lose money for that. So I think logistics still play a very huge role there because they started holding out, they started pausing and so what as you've mentioned your freight forwarder offered net 30 or net 60, which is not normal in a, in a situation, an EDC situation. But I think that's where the relationship also forms. When there's one challenge or there's a disruption, other parts, other partners can also provide support. Yeah, and same thing. I mean vendors also. That's why I keep sharing. Try to negotiate your unit cost, your FOB cost to your vendors because they might be able to support you. It's just a matter of asking. Correct. Now let's look ahead. What trends or shift should we be paying attention right now?

Yeah, it's very important that you know that you're up to date, you know what's happening. And right now number one for me is the sustainability is growing. In both consumer and investor conversations, more brands are asking about carbon offsets, reusable packaging and sustainable sourcing. AI is number one. And automation are also big. At move, we're now integrating low cost automation and AI tools for forecasting. This not only increase accuracy but also boost confidence in expansion planning. And another thing is nurturing and localized warehousing are also accelerating. We're helping clients in the US analyze whether it's more cost effective to place their fulfillment center on the east coast or west coast based on factors like customer density, shipping lead times and carrier rate zones. This kind of tailored analysis helps reduce last mile cost and improve delivery lead time reliability, especially for brands scaling into new regions. And another thing is speed and transparency remain critical. We're doubling down on real time visibility. I always kept on telling this since I started our podcast that you cannot do a real time decision making without a real time visibility from advance shipment notice updates, live inventory tracking to meet those expectations?

Lara and what would be your number one piece of advice for DTC founders trying to future proof their supply chains?

Okay for me, treat your supply chain as your brand differentiator. Don't view it as a back end cost center. Whether it's your unboxing experience, your delivery promise or your return process, those are, those are all extensions of your brand story. Partner with people who treat it that way too.

When you say treat your supply chain as your brand differentiator, that's very powerful. How else can you support or like if you can further explain that to our listeners, how can they make it like a brand differentiator?

Yeah, for example, in freight cost optimization you could even actually sell your product. I mean you can even more profitability if you have a strong logistics team analyzing the cost efficiency, cost effectivity of your cost of goods. So it's very important that you have well experienced logistics team. You invest with those people rather than seeing them as a cost drivers to your to your business treat them as part of your same with your marketing team, same with your sales team. They are they. They can definitely you know make your your brand profitable if you would just really check them. You know if you just really treat your supply chain as you know part of your growing business.

As we always say supply chain should pay for itself.

Where is that always an ROI Lara? I mean like for example for baboon I'm one of their talents but we know that you know that I have a premium rates but they still opt to the owner still opted me to keep because we were able to I am able to provide value to their organization. More cost savings more more net credit term for the suppliers. And if all the owners think that way and hiring a high caliber supply chain talents that would be you know beneficial for the company.

And there were so many projects that when the unit cost is the problem or the tariff is the problem, we have to find savings in the our end to end supply chain. Now we started to find savings in logistics that we don't usually look into even the warehouse at this point. I remember one of our clients tweeted us because we because he was able to really lower down the cost warehousing with the packaging et cetera. Because again it's when you don't ask for it, you wouldn't or your partner or your partner partner in warehouse and triple will not will not proactively share those information. And so keep asking because you might be able to uncover a lot of savings from those projects. And I think the major lesson here is whatever disruption we are going to face in the future, whether hopefully not another major disruption or just tariff or just or just power interruption simple problems like out of stock raw materials. We should be looking at our supply chain as a big one department where one category supports the other. Logistics is connected with warehousing sourcing and new product development is connected with inventory planning and all those are should be working together properly.

Right.

The supply chain will always be moving. Definitely. And that's why conversations like this matter. If you're listening and thinking how do I apply this to my business? You don't have to figure out yourself that's exactly what we're doing here. So don't forget to subscribe, rate and share supply chain moves. And if you have a question or want to work with our team, head over to movesupplychain.com and until next time. Keep making moves that matter. Thank you, Claude.

Thank you so much, Lara, for having me today. It's a pleasure.