The Impact of a 25-Day Delay in the Supply Chain
Global business advising company Accenture estimates that 94% of large companies are experiencing supply chain interruption. Large companies. That number likely moves to 100% when it comes to small and medium sized manufacturers who rely heavily on being both receivers and providers.
According to the PMI Survey, in August 2021, business costs and their accompanying prices increased at “some of the fastest rates in the past 20 years” while the manufacturing growth rate is hitting a 6-month low. Companies are being forced to pass these impacts along to you, the consumer. The below graphic lays out these differences from 2019 to 2020.
Consumers often believe that third-party seller is pocketing the entire $50 they just spent on a desktop Himalayan salt lamp. As demonstrated in the August 2021 Time article “Why Is Everything More Expensive Right Now? Let This Stuffed Giraffe Explain,” importing products from overseas proves much more challenging logistically than ever before. And at a much higher cost.
Warehouses have continued to raise hourly rates in an attempt to attract new talent.
Independent truckers have taken a hit on hours wasted waiting around pickup spots and ever-increasing gas prices.
The cost of packaging and packing materials has risen.
And then there’s the Amazons of the world who take their cut if you sell on their website.
The delays demonstrated in the giraffe article further support the argument that companies must plan their year even further in advance to meet peaks and valley in their sales stream. That 25-day difference can obliterate holiday selling plans for the company and can force consumers to shop elsewhere for a shorter shipping time or broader inventory.
As business owners, taking a hard look at your supply chain options is critical right now. Constant communication and new project management processes are key to keeping things moving. While you may have your tried & true suppliers, it may be time to look at who else is available. The individual part may be priced slightly higher but once you factor in the shipping and time drag from your current supplier, it could all balance out.
Whether you’re looking at the “Just in Time” method of keeping an abundance of stock on hand or evaluating what you can effectively produce in the here & now, SEWN is available to help. Our experts can help evaluate your situation and connect you with the solutions to drop that 25-day delay.