Global Logistical and Freight Challenges

Supply chain problems disrupting customer service? 

Let’s talk about domestic sourcing

All of us battled with multiple challenges during the pandemic – irreparable personal losses, businesses shutting down and disruptions in the education system for our children too. Businesses had to deal with unforeseen difficulties including vulnerable global supply chains. One of the many reasons why Texmo saw a growth in new customers in the recent past is because their regular suppliers could not solve supply chain problems, including risk mitigation and planning for contingencies.

One of the problems was also the lack of visibility into these supply chains. For instance, customers in the USA waiting for products to come in from far flung places like China or other countries in Asia, had to deal with huge uncertainties and lack of real-time knowledge on deliveries. For these American companies, one cascading effect was also a loss of credibility or relationship with their own customers, in turn. We at Texmo know that brand reputation is hard won and fulfilment logistics is one of the ways to protect and reinforce the same.

The impact of the pandemic

Most companies follow pretty efficient inventory management systems. For instance, they eliminate the need to hold materials in warehouses by choosing the just-in-time supply chain process. Ordering raw materials (or other inputs / resources) from global suppliers is honed to perfection here. Orders are placed, materials are moved and delivered in a smoothly synchronized system.

And ordinarily, this would happen pretty flawlessly and everybody would also have better control over the entire process. But the pandemic threw a huge spanner in the works. Almost all links in the supply chain were broken and even more worrisome was the absence of an immediate solution.

While everybody understood that the pandemic was unlike any other business challenge, the unfortunate truth is also that businesses had to bear the brunt of the cascading effect of supply-chain disruptions. One of the most important adverse effects was depleting customer bases.

Now, with the advent of the Omicron variant, businesses are once again being forced to deal with an already stressed supply chain. Rising costs in shipping, container prices and materials are going to continue making a company’s global supply chain chaotic for some more time to come.

Shifting the supply chains

According to the US Census Bureau, supply chain disruptions were felt the strongest in the following sectors:

  • Manufacturing
  • Construction
  • Retail & Wholesale trade and
  • Accommodation and Food services

All of this has forced companies to rejig the way they handle supply chains. There are some very interesting insights into these changes in a study conducted by Ernst & Young LLP (EY US). The respondents – 200 senior-level supply chain executives – had this to say:

  • 72% reported serious negative effects
  • Increased visibility and efficiency is a top priority in the future
  • Autonomous and digital supply chains are the future and
  • Reviewing supply chain footprint is critical to avoid geographic concentration

Companies are mapping their supply chains and identifying vulnerabilities. Reducing dependency on non-local vendors is one of the solutions being explored. Work is being done by the Biden-Harris administration in shoring up domestic sectors.

Source it where you make it

That is precisely why we are talking about moving inventory closer to demand. Think of it this way – ‘source where you make’. If you are in the USA, all you have to do is contact our US office and we will help reduce / eliminate the pain areas associated with freight challenges of bulky global supply chains. With our ability to ship products ‘Made in America’, through domestic freight and logistics channels, we are promising you:

  • Shorter shipping lead times
  • Stability and visibility of logistics process
  • Elimination of communication challenges
  • Omni channel distribution
  • Rapid action manufacturing support due to spare capacity availability and
  • Flexibility of inventory volumes

Depending on the complexity of your investment castings, you could be facing long – maybe even months- lead times when looking for suppliers outside of America. By sourcing back home, you could bring this waiting period down to 6 to 7 weeks of manufacturing and shipping lead time. Apart from shortening lead times, there is the added advantage of granular control over your total delivered costs because we eliminate most of the global cost forces that may otherwise be causing inefficiencies in your cost model.

Contact us to find out how reshoring to the USA can help you serve your customers in a significantly better way.