Global sourcing with supply chain have been under attack lately, but their need is unmistakable. Over the past 25 years manufacturing in many industries (including packaging) has moved overseas. Not all of course, but a lot, enough to make a huge difference in how growing companies need to look at sourcing their packaging and the different options they have at their disposal.
Tariffs
In 2019 President Trump decided to expose China and other Asian countries (but mainly China) for producing low cost packaging products while limiting and even preventing US products to be sold in China at fair market pricing. Needless to say, this resulted in a serious trade imbalance and the US was determined to change that. In doing so, and at the time tariffs were announced, many companies that needed printed flexible retail packaging that normally would have gone overseas due to lower cost, found domestic suppliers who promised high quality, on time delivery, and impeccable service.
Boy were they wrong! This is not to condemn US manufacturers; they did what anyone else would do when given new business…they took it. At the time these companies were headed into the slow Spring and Summer months and the new business was .png?width=150&name=download%20(3).png)
welcome until their supply chain of resin was impacted and their pricing started to climb. Soon, promised lead times were stretched and quality started to go down.
Don’t get me wrong, not everyone had these problems. If you were Nabisco or Proctor & Gamble you were assured that your packaging would ship on time, but what about all the other guys? The medium size companies started to see lead times impacted and minimum runs that were promised were suddenly bumped higher. But what were these companies to do, Trump was pounding on doing anything overseas as “bad” while many factories were being forced to plead and beg for faster delivery (at higher cost than they ever paid from overseas)?
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Many companies realized that domestic companies in the US and Canada for that matter just weren’t able to deliver on their promises so sourcing from China and other Asian countries started to pick back up. And then…
Coronavirus
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Some strange virus that started in China has made many people sick and China tried desperately to control the spread. Just as China was in the middle of its New Year celebration the government tried to control the spread of a runaway disease. Their economy, already on shutdown from Chinese New Year and still reeling from the tariffs that Trump has unleashed on their economy was struggling. By the way, this information is part of a much broader topic and eBook. Click here for more.
Now factories were forced to stay off longer…forcing orders that were already being impacted from CNY (Chinese New Year) to be pushed back longer and longer. Ouch! Workers wanted to go back to work but the government said no. With each day more and more cases of this virus were spreading. Companies throughout the world made demands that nothing, no orders, could be sourced from China. While that sounded great, soon this virus went to South Korea and Vietnam and Taiwan then Europe and now to the United States and Canada.
To be clear, no one wants anyone sick or dying but the impression that not sourcing from China would somehow prevent the spread of this disease was very wrong.
So Now What?
Unless you are one of the largest brands in the world, you must have options and global sourcing with supply chain should be one.jpg?width=150&name=download%20(4).jpg)
of them. Don’t get me wrong, sourcing globally isn’t for everyone but if you need:
Global sourcing with supply chain isn’t going away, despite what Trump of the coronavirus or anything else that is happening in the world. Do you think Walmart or Menards or even Amazon can source all their products from North America? Do you think that US factories can handle the volume and demands of taking on production that has been done overseas for the past 20 years? There is no way. While it would be great to say that your local or regional supplier from the US is able to handle your orders without delays or quality issues, you’d be lying to yourself, and you know it.
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