SUPPLY chain disruption is rearing its ugly head again, at least according to local company Lasco Distributors Limited (LASD). Yet, chairman James Rawle says the company is prepared to make any “tactical adjustments” necessary to maintain adequate inventory and ensure the smooth delivery of products.

LASD, like many other local companies, had only this year started to recover from supply chain disruptions that started back in 2020 as COVID-related shutdowns impacted production from farms and factories and squeezed prices higher. The Ukraine/Russia war further complicated global supply chain challenges and increased inflationary pressures.

To keep inventory intact, LASD has been adopting and instituting measures, protocols and processes to ensure business continuity and the minimisation of potential disruptions.

However, new challenges are on the horizon.

“We enter the new financial year focused on executing our strategic initiatives, while being very aware of the dynamic environment we operate in. Supply chain disruptions have resurfaced and, with them, the associated shortages and cost increases. We will continue to navigate to make the necessary tactical adjustments in the short-term, while staying focused on delivering sustainable results in the long term,” Rawle said in the company’s just-released annual report.

LASD’s cautionary message regarding supply disruptions comes as a major global player in the cargo industry, Maersk, revised its full-year financial guidance to accommodate ongoing supply chain disruptions in the Red Sea due to Houthi rebel attacks on shipping vessels using the passage. Maersk expects the situation in the Red Sea to continue at least until the end of 2024.

LASD, which is the largest revenue earner of the three affiliated companies, earns cash from being the exclusive distributor of products made by Lasco Manufacturing Limited. The company is also the exclusive distributor in Jamaica for foreign brands such as Curves, FreeJoy, and SlimFast, but its business has reached into various Caribbean, North American and Latin America markets.

It is made up of the divisions: nutrition, food, and beverage; hygiene; and health care, which is managed by the pharmaceutical division.

Rawle says LASD has already developed methods to effectively manage supply for all business segments.

“Any disruptions in the supply chain could affect our ability to deliver products effectively…Mitigation measures include developing multiple supply options, to prevent stockouts, managing prices actively, and enhancing operational efficiency to achieve savings,” the company said in the preamble to annual financial statements.

It added that efficiency and productivity are closely monitored through a set of performance indicators that guide improvement efforts.

Reshaping of some divisions

Amid efforts to adapt to external logistic changes, LASD is reshaping internal business.

So far, the company has managed to maintain both revenue and earnings growth, amid heavy investments in the expansion of its warehouse at Whitemarl, St Catherine along with the recent purchase of a property neighbouring its pharmaceutical warehouse on Red Hills Road.

However, the company wants greater focus on portfolio transformation while improving margins, particularly in the hygiene category, which encompasses home care and personal care.

“This is being achieved through innovation, mix management, and new sourcing relationships,” the company, which is headed by John DeSilva, said.

The company added that the pharmaceutical division’s portfolio is being reshaped to adapt to evolving market conditions. LASD said it will focus on developing growth opportunities in specific therapeutic areas as well as expanding the over-the-counter, consumer health business.

LASD which celebrates its 36th anniversary this year, has expanded and improved route-to-market operations over the years in addition to increased investment in marketing activities and in-trade activation, the company said.