Every month, OVRSEA meets with its shipper customers to discuss the latest freight and logistics news and current and future challenges. This week, we meet Diego Mombelli, Global Supply Chain Director of Asmodee, a publisher and distributor of board games with a worldwide presence. How has a company that makes most of its revenue at the end of the year and produces nearly 50% of its games in China adapted to the new chaotic reality of transportation? We asked him.
Hello Diego! Before getting into the heart of the matter, a little word about you and Asmodee?
Since 2019, I am the Global Supply Chain Director of Asmodee, after a career that has seen me work with large groups (Nestlé) as well as small multinationals. My team and I are responsible for managing the entire inbound supply chain, from production to delivery to our subsidiaries. We have about 20 distribution units around the world, which distribute our games but also those of local partners.
What are your logistics flow characteristics?
Even if our main source country is China, we are working to increase our share of local production to limit our ecological impact. China remains a must due to the expertise of our local partners, the nature of the necessary components and the Chinese production capacity, which cannot be found in Europe or the United States for the moment. Our logistics volumes represent about 5,000 TEU (Twenty-Foot Equivalent Units) containers per year, which are relatively low volumes for a large industry. We therefore focus on hyper-scheduling, quality of service and agility to ensure the supply of the various factories.
Breaking news: the energy crisis is pushing the Chinese authorities to close or limit certain factories. Are you concerned?
We are seeing a very slight impact in a few factories, but for the moment it is limited. Our production is not energy intensive, so the factories we work with are not the most affected. But we are monitoring the situation closely.
What are your main difficulties at the moment?
Our external difficulties are those that every international shipper knows! The concrete consequence for us, as for so many others, are lead times from China that have been extended from 8 weeks to 14 weeks... In addition to this, there are internal challenges. The biggest of these is to guarantee good visibility of flows, and this involves working closely with our transport service providers, from whom we ask for more "generosity" in terms of visibility. The crisis has made it possible to accelerate transparency with them, a quality at the heart of our relationship with OVRSEA. In the end, everyone wins and trust is strengthened. Transparency is the remedy to avoid panic in such a context.
How did the crisis affect the way you envision transportation?
This unstable situation has made us more curious, looking elsewhere in case one of our service providers should unfortunately fail us. At the same time, we are strengthening our teams dedicated to transportation, whose activity and complexity have increased this year. Managers have to be as close as possible to the teams and support them through change, because the pressure is sometimes very high.
Has this unprecedented crisis also forced you to review your logistics strategy?
We managed the crisis by stocking up. If we had not anticipated it, the damage would surely be heavier today. This is never a solution that we like, but it is inevitable when most of the volumes take place between September and Christmas. As early as 2020, we felt that it would be necessary to reserve capacity very early on the production side, so we relied on higher annual contracts with our partner plants.
How is the gaming market evolving?
The health crisis had a boost effect on our market, with an acceleration of digital, but also with more discovery of our games, as people spent more time at home. Managing growth became a challenge, as production needs had to integrate the growth in sales and the building of larger inventories, due to the increase in supply times.
We're not going to get the crystal ball out, but how do you see the coming months?
We have chosen pessimistic projections. All of our assumptions and our budget for 2022 are based on the idea that the freight situation will not change from this fall. The good news is that we are better prepared mentally. If 2020 was the year of the great health crisis that affected production plants, 2021 was the discovery of shipping chaos. In 2022, we will be mobilized like soldiers for war, the war of transportation.
After these 18 crazy months, what advice would you give to other loaders?
That anticipation, communication over time and adaptability are more essential than ever. I also advise working as much as possible on real figures and no longer on approximate forecasts, an element which has enabled us to help our subsidiaries and customers to better anticipate their needs. We try to trace the containers delivered to obtain a precise range of the different delays (booking, transit, ports, land transport). This allows us to base our purchasing plans on these actual figures.
A few words about The Merchant before leaving us?
Market thermometer! This is exactly the kind of media that helps support our teams, our "soldiers" on a daily basis, while making us feel that we are not alone in the storm.
