For the newsletter and blogs, our topic for this month is “The Supply Chain Crisis.” Within the last few years, instability resulting from the pandemic and elsewhere has caused a severe upset in supply chains. This instability has resulted in various states of scarcity and excesses with different products in the supply chain, affecting markets worldwide.
In the earlier blogs this month, we discussed ways of navigating through this crisis for yourself and your prospects and customers. Now let’s turn around and look at it from a whole other angle—that the crisis will provide opportunities for you and your business.
The radical changes that have come about from the supply chain crisis will produce a radical shift in a positive direction. We know that, for example, the material can get stuck at a port or in customs. If this sort of thing continues for too long, you can bet that businesses will do something about it. They’ll come up with alternative solutions, or even ways to fabricate the material themselves. People, especially businesspeople, are incredibly resilient, and will only “sit there and take it” for so long before they take action to ease the situation. There is no “plan B” so they’ll invent it.
Multiple Sources
One solution to the problem will be to hunt down alternative sources for materials that are being problematic. The marketplace will continue to shift globally, and businesses will be strategically obtaining supplies from multiple sources instead of relying on a single source and experiencing delays and problems. For example, if you’re having issues receiving goods within the US (or Canada or Mexico), look elsewhere.
We spoke earlier of a fashion client of ours that was having a great deal of trouble obtaining fabric. Two of their vendors took unfair advantage of the supply chain crisis by spiking prices 28 percent per square foot. With our help, our client was able to obtain a vendor that really wanted their business. This vendor is having trouble securing fabric along with everyone else, but he is honest and willing to provide our client with the best possible pricing. And you can bet our client will be remaining with that vendor once the crisis has died down.
Resurgence of Manufacturing
Before the pandemic, US manufacturing had been moving overseas for many years. There is no doubt that if problems persist in obtaining materials, manufacturing will have a resurgence in the United States.
Mexico, close by, will be all over this resurgence. There are places in Mexico that are already engaged in manufacturing goods for the US—for example, Volkswagen has a manufacturing facility in the city of Puebla, which is actually one of the largest facilities in the global Volkswagen group. Other automakers are manufacturing there as well, including GM Chevrolet, BMW, Fiat, and Ford. Problematic sourcing from overseas is only going to result in a boom for Mexico.
We believe this will occur in the US itself and Canada as well.
From crisis can come opportunity—and this is no exception.
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