The simple human act of shopping has turned into something more like a journey into the unknown. The desolate shelves of our grocery stores, prolonged waits just to replace our home appliances, and staring longingly into the empty car lot have become our new normal amid the global pandemic. We continue to experience a massive disruption in supply chain that challenge consumers and businesses alike. DuraTech has spent the last two unpredictable years brainstorming and working out solutions to these challenges, including Supplier Managed Inventory, that have allowed the company to give customers the products they need when they need them.
In the beginning
COVID-19 was first identified in December of 2019. In the beginning of the pandemic, demand for goods slowed because people were avoiding venturing out to window shop or purchase non-essential items. Due to COVID’s contagious nature and a drop in demand for products, many factories and manufacturing plants around the globe reduced product output or closed temporarily to minimize the spread. This resulted in a supply shortage that heavily impacted the manufacturing, construction, and automotive industries.
With reduced expenses in the first half of the pandemic, many people have accumulated savings that they naturally want to spend now. With this, the demand for goods and services has increased. The challenge is, manufacturing plants and factories cannot keep up. Inventories were reduced in the beginning, so businesses are now scrambling to get product. Now each “link” in the supply chain is experiencing delays, whether big or small, causing a ripple effect extending all the way down to the consumer.
DuraTech reimagines serving their customers
As a leading custom printing company, DuraTech Industries has not been able to fully escape the grip the supply chain disruption has on manufacturers. They have, however, learned to adapt to the ever-changing environment and it has helped the company strategize and grow. These strategies are unique and tailored to the customer in order to best fit their needs.
Several supplies are proving to be challenging to obtain, nearly every business is dealing with shortages so some suppliers are limiting order quantities. DuraTech combats this by getting creative – using an identical material in a different size, for example. DuraTech’s Customer Service Representatives work diligently with customers to find solutions just like this; they discuss which of DuraTech’s in-stock materials will work in an identical fashion as the out-of-stock material so they can get the product out to the customer. The company is also continuously looking for additional suppliers so they can build up a more reliable supply chain. Nearly all commodities in DuraTech’s basket of necessities can run the risk of scarcity. Inks, adhesives, and metallic powders are among the top priority products the company is seeing a shortage in, however the company is working with its suppliers by placing blanket orders so the supplier can better understand DuraTech’s demand and forecast. This helps both DuraTech and their suppliers with product planning.
In addition to product shortages around the globe, there’s a labor shortage in the transportation industry. Delayed inbound deliveries sets the potential for DuraTech’s production times being delayed, which sets their customers back, in turn setting their customers back, and you get the idea. It’s a snowball effect, and it has caused true challenges around the world.
As aforementioned, DuraTech Industries offers a service that aids in offsetting the burden of shortages for their customers. Supplier Managed Inventory (SMI) is an added service in which DuraTech will manage production for their customers based on their demand information. Participating in SMI as a customer will reduce lead times since DuraTech prebuilds parts based on customer supplied forecasts. Periodically, the physical inventory of the product is monitored to prevent shortages. The cost per part is typically lower in an SMI agreement because DuraTech will print in economical quantities, which with rising prices is an added benefit to the customer.
SMI is a great option to better secure your supply, and so is sourcing your products domestically. Delivery times to the United States is approximately 50 percent longer due to the labor shortage the world is facing in the transportation industry. Imported goods are often cheaper upfront, but figuring in tariffs, surging freight rates, and the inconsistent and extended delivery times you end up paying more in the long run. By reshoring, sourcing from North America, you won’t be dealing with backed up ports and the accumulating expenses.
Is there an end in sight?
Our government is working to level out the disparity between supply and demand as well. The Biden-Harris administration established a Supply Chain Disruptions Task Force to be led by the Secretaries of Commerce, Transportation, and Agriculture. Homebuilding and construction, semiconductors, transportation, and agriculture and food are the primary sectors of focus of the Task Force, and the objective is to address mismatched supply and demand.
The White House states that in past circumstances of rapid changes in supply or demand, the market was able to regain its footing quickly and current predictions foresee a similar outcome for the pandemic era disruption.
Supply and demand is known to ebb and flow, and eventually the market will reach equilibrium again. In the meantime, DuraTech continues to create solutions for their customers. Learn how you can stabilize your label supply by contacting us through our website or by email.