Many people in the United States are having trouble making sense of the global supply chain, its current challenges, and how they affect things happening in our country. However, it’s important to stay up to date on the latest in global supply chain management – because what happens on the other side of the world can greatly affect your business!
Luckily, in this episode, we’re discussing the current global supply issues at hand, what they mean for your business this holiday season, and how you can prepare for it.
How the global supply affects local business
It’s an understatement to say that the COVID-19 pandemic has led to issues around the world – and many of which shape the current state of the global marketplace, including shortages in the international supply chain.
International supply chain distribution works with a ripple effect. That means a shortage in one country will affect many others. What happens in China, one of the world leaders in factories, for example, makes a huge difference in the United States.
Currently, China is experiencing a shortage of coal, leading to a power shortage and the shutdown of factories. We’ll feel the results of that in the US – especially this upcoming holiday season, when production activities will face serious effects. All of this can impact your bottom line.
In other words – don’t expect this to be a holiday of abundance, and prepare for some turbulence.
How to prepare your business for the holiday season
Consumers are being encouraged to buy Christmas gifts early this season, as the supply chain issues may mean there are fewer options left – or much higher prices – later down the line. This means that business owners should note that buying season may come earlier this year.
The pandemic’s effects on global supply chain distribution caused many companies with operations across the globe to revisit their strategies. Some are moving production activities back to China – but how sustainable is it to continue with a back-and-forth like this? Local production is a serious option to consider.
Right now is a good time to think about your supply chain and value chain. The best thing you can do to prepare is set up safeguards for your own production process. When reviewing your strategy, consider the risk of having products manufactured in a foreign country, and carve out a portion of your value chain to prepare for the possibility of plans going awry.
Start by reviewing your current process and evaluating which component carries the most value. If possible, identify two production sites. You may find, for example, that marketing can be done anywhere, but production can not. So find a comparable production site that will give you comparable quality to keep in mind as a backup plan. No matter what, though, don’t completely do away with one strategy. Think of this as hedging against further disruptions down the road.
How we can help
If you want help strategizing as you prepare to navigate this holiday season, book a consulting session today! We’ll help you take a holistic look of the market, provide insight on what’s down the road, and lend guidance to make sure you’re on the right track.