How do I... ensure my supply chain is flexible enough to cope with changes in demand?

Wine merchant Edward Parker says margins in his sector are not generous and so "cashflow management is absolutely key". So, too, is a seamless operations strategy. Parker sources wine for private individuals from producers globally and delivers across the UK. "It's vital we stick to delivery promises and get our product to customers," he says.

Parker says he's "begging" for a rise in demand, but is his £1.5m-turnover business, Edward Parker Wines, ready? Demand patterns have become unpredictable and supply chain disruptions more likely. Delivery costs have gone up while volume has fallen. And there's another key challenge: "Because we're a fragile product, it's always a difficult relationship to manage. By and large, carriers don't want to carry glass [bottles]. It's a pain and it's expensive."

When he set up the firm in 2003, having left a City job to live in Norfolk, his aim was to work with smaller estates. Most of his suppliers are in France. He keeps strong relationships with them and a regular dialogue, because it makes a "difficult phone call" easier. "We try to talk to our suppliers as much as we can, so they understand the difficulties our business is encountering, and we understand theirs."

There are other issues. If there's been a shortage of glass, his growers haven't always got the wine in the bottle in time for his order. And at Christmas, his courier company's system "comes under a lot of pressure". Still, the business is "growing nicely", and five investors bought 20 per cent earlier this year. But what more could Parker do to manage unforeseeable occurrences that could wreak havoc on his supply chain? We ask three experts...

What the experts say

Stuart Richardson, managing director, UPS Freight, UK
and Ireland
Every business suffers from the ebbs and flows of the marketplace, so to avoid production delays, inadequate inventories and dissatisfied customers you need to ensure your supply chain is flexible enough to cope with the specific logistical demands of your business.

Work with a partner that can balance premium express services when time is of the essence with more economical options, which can be used ahead of peak demand to help keep your supply chain moving while being kind to your bottom line.

As a wine merchant, ensure your logistics provider offers a specialised alcohol service with certified bottle packaging, designed to protect your glass bottles during transit. Also, keep your transportation under one roof by using a single partner that can provide all shipping solutions and sophisticated technology to help track packages and manage information.

Robert Craven, founder, the Directors' Centre
You are right to be sensitive to the situation. Your long-term financial performance will be related to your ability to get the right product to the right person at the right time. To manage the unforeseeable is a contradiction. You must keep involved and engaged in every stage of the supply chain. To manage customer expectations, you need to know what is happening.

One option would be to offer gold, silver and bronze guaranteed delivery dates to accommodate different customer expectations, with prices to match. Clients will tolerate late delivery if they are kept in the loop or offered alternatives.

Ironically, the ambiguous delivery time could be used to your advantage and built into the story. You say "most of your suppliers are in France". You could state: "Our wines are sourced from small family businesses so our delivery schedules may appear a little erratic." This adds to the mystique, builds in some slippage and early delivery will be
an extra surprise.

Professor David Menachof, Hull University Business School 
You have made a great start by cultivating personal relationships with your suppliers. Make sure that those links continue along the supply chain, and include customers and logistics service providers. Flexibility is easier when you work together.

A bit of innovative inventory management could also be useful. Could you convince some of your suppliers to "pre-stage" their wines at your warehouse and, in return, offer to store them for free? You will have access to the inventory but will effectively delay the outgoing cash and the related investment in inventory. Why should your suppliers choose this option? They get to clear out their caves, and when the product is sold, it is already that much closer to the customer. Everyone wins, including the customer.

Business clinic is published in association with UPS www.ups.com