by Tim Kilpin | 24 Jun 2021
The Bloom Report
I live near a lake, and I love to watch how boats navigate its ever-changing waters. Placid mornings will be followed by windy afternoons, and the waves chop and churn in turn, causing harried boat captains to constantly shift their footing, trim their sales, or adjust their direction. (OK, calling these weekend water warriors ‘captains’ may be a stretch, but hey if you’ve got the hat, wear it.)
And so it was this morning that I was perusing LinkedIn while fielding updates from China on shipping delays, missives from Product Development on cost increases, and NPD reports on the rapidly changing retail sales outlook. Damned if it didn’t feel like I was trying to steer a boat in very choppy waters.
And it’s not an exaggeration to suggest this rough weather adds up to a once-in-a-generation storm. Coming on the heels of a global pandemic (which my global colleagues regularly remind me is anything but subsiding in other parts of the world), and followed by gobsmacking spikes in demand, severe shortages at every stage of the global supply chain, and a never-before-seen rush on industry talent, this is some storm. Our boat’s rockin’.
For those of you directly involved in Operations, or for those who have to periodically check your Operations leader’s blood pressure, you know that shipping container costs have skyrocketed, and just getting space on boats out of Asia has turned into a cutthroat game of Pirate’s Dice. If you’re lucky enough to get a berth out of Yantian, your container may be bobbing away offshore in Long Beach, waiting for a rail car, or a truck chassis, or a truck driver…
Meanwhile, your Finance team is reminding you that the cost of goods on that shipment floating lazily in the Pacific came in about +8-10% higher than your plan called for. And your Sales team is nervously eyeing the price list, wondering how to have that conversation with their favorite buyer.
Captains, at least know this: you are not alone. Not only is the whole industry in the same boat (rimshot!), the whole world is. Go ahead and complain about the fact that your factory can’t get integrated chips for another 180 days; tell it to the auto manufacturers – where one new car can need 3,000 (!) chips.
And while you’re sweating over your spreadsheet, trying to come up with an answer to the simple question, ‘how does this affect our plan for the year?’ – ponder this: there appear to be more job openings in the toy industry today than ever before. A thoroughly unscientific study (undertaken by me, scanning through LinkedIn) showed nearly 1,200 job openings today at the Top 10 toy companies in the U.S. This, by the way, is against the backdrop of U.S. toy industry growth that remains – at least so far this year – well into double digits.
So to all the would-be adventurers out there, wondering if this might be the time to set sail for a new career in the toy industry, I say this: come on in, the water’s (mostly) fine. This last awful, horrendous, never-ending year has certainly reinforced one thing: kids still want to play, and parents want to let them.
I’m thinking we’ll include a captain’s hat in the new hire packet from now on…