One of the key areas...if not THE key area that companies neglect to understand is the need for a US Supply Chain partner. However, even before this comes up, many companies poo poo going overseas for the following reasons (even though they've never tried it)
- It takes too long
- The quality isn't as good as I can get in the US
- I get unexpected orders, so overseas just doesn't work for me.
However, now that we are in the midst of the Coronavirus, companies are going to have to look to alternative suppliers to fulfill their flexible and retail packaging needs for the summer months. If not, they are going to be out of luck. Overseas suppliers are fully operational right now despite the rest of the world.
To be brutally honest, these are excuses from uneducated, misinformed people about overseas sourcing. They want to find a reason (or reasons) to make themselves feel better about avoiding overseas suppliers. These have been thrown around and used so often that, when we hear them, they are a clear-cut sign they have their heads in the sand. This is either out of fear and worry or plain ineptitude (often both).
I'm not trying to be mean or crude, but it's the truth. As we discussed, one of the key ways to overcome these issues is to have a U.S. Supply Chain partner. It could be as simple as having your own warehouse and a place to stage products for immediate use. But we've found it is so much more. Let me explain.
A US Supply Chain Partner Provides
- Improved Lead Times
- Lower Cost
- Quality and Production Checks
- Safety Stock
- Emergency Order Buffer
- Peace of Mind
Now let me dive into the benefits:
Improved Lead Times
All too often, companies will order a particular product five or 10 times per year, each time paying for smaller quantity than they could get overseas with just one order.
Now, truth be told, most Asian companies are not willing to hold inventory or even billing when it comes time to order in larger quantity. But with a U.S. Supply Chain Partner, they will. Remember: Their U.S. partner has worked with the factory for years, there is a trust that has been built, and the factory is willing to run and hold inventory - or even ship and hold billing - until the client releases it.
We are talking about running an order once or twice a year, at larger volume with a lower per-piece price, and the client only pays for what they receive. This is a huge cost advantage very few companies understand is even possible.
Quality + Production Checks
With a U.S. Supply Chain partner, stateside warehouses and inspection (once material arrives) is another opportunity to review the imported product and have it staged even further. For example, a customer may receive their shipment in bulk from the factory overseas.
Here in the states, the warehouse can break down the items further and repack, so when a shipment is released the customer enjoys the increased speed and efficiency on their end.
Another advantage is quality checks - even more than was done overseas. Not that there was anything wrong, but it is peace of mind for the end user.
Safety and Emergency Safety Stock
Even the most efficient companies in the world receive unexpected orders, or they encounter a problem further down their production line that requires more product. A
U.S. Supply Chain partner can negotiate for raw materials, or even finished product, on hand at the factory at no additional charge. They can also have safety stock on hand here in the U.S. so the company is always covered 24/7.
Companies tend to ignore this simple step, and when something happens, they are stuck. Further, there is an assumption that U.S. manufacturers are in some way faster than overseas. This is hardly the case. They assume that if a problem arises, a U.S. manufacturer can "squeeze" in their item, and nine times out of 10, they are mistaken. The response time and willingness to help a customer from overseas far outweighs U.S. manufacturers.
Peace of Mind
The word "partner" is thrown around a lot these days. But when dealing with overseas suppliers, you better have a "partner" you can count on here in the U.S. They are negotiating on your behalf, they are looking out for your best interests, and they are watching your orders to make sure you have what you need, when and where you need it.
If there ever was a glaring "missing link" to sourcing successfully from overseas, it is absolutely, 100 percent, having a U.S.-based Supply Chain partner.
These are the people you call, meet with and discuss new projects and issues you may have, eliminating the need to communicate with a contact that is 12 hours ahead of you and doesn't speak and understand English as you do.
You want and need the innovation and cost savings from overseas suppliers, however, the key piece is a U.S.-based organization that is your partner and brings you and your company peace of mind. Even better, there is no charge for this. It is part of the entire process you hired them for in the first place.
This post is part of a much larger Pillar page on Global Sourcing. Click Here for More
