Given the massive supply chain disruptions of 2021, brands are looking to find new ways to effectively manage their supply chain and combat these difficult times in the new year. Below is what to look out for in 2022.
Nearshoring & Dual Sourcing
From a sourcing perspective, there are 3 main buckets of challenges that affected brands a great deal this past year:
- Logistics – container pricing, shipping timelines, and port delays
- Materials – pricing and availability
- Production – availability
Freight costs are fluctuating at a rapid rate, inflating prices, and damaging margins. Material prices are constantly rising and paired with increased shipping costs further ruing margins. Higher demand for production is limiting availability. Put this all together and it’s a mess. Brands are beginning to turn to other avenues for their sourcing needs.
Nearshoring has been an effective strategy in helping brands to lower freight costs and receive their raw materials faster. 66.4% of Chinese exports are subject to US duty and tariffs. Finding sourcing options close to home mitigate those additional costs and allow. In a time where flexibility is key, brands are also turning to dual sourcing strategies to ensure they have a variety of options and aren’t victims of circumstance. Options like Suuchi’s Global Sourcing Network help to drive a reliable, consistent, efficient, and cost-competitive supplier network in the western hemisphere.
COVID-19 has flipped the world on its head. Remote work has become the new norm in most cases. Working out of spreadsheets and emails is a thing of the past. The need for a digitized supply chain is paramount in maneuvering through the challenges of today
Cloud-based software tools can provide companies with more effective ways to optimize:
- Communication and Collaboration
These 2 components for a best-case digital transformation of a brand most deeply impact speed and decision making. Given today’s climate, time and educated business decisions are pivotal to ensure your brand isn’t a product of its environment, rather your environment is a product of your brand.
Collaboration between factories, vendors, shippers across continents must be real-time and efficient. Lack of visibility into task assignments and real-time project statuses prohibits brands from acting quickly when supply chain issues or delays arrive. Any form of delay will impact lead times and speed to market. In turn, this leads to fewer selling days over the course of the year and the need to hire / additional operational overhead due to the limited bandwidth of your team.
There were a variety of software tools adopted by leading brands in 2021. Look for this trend to increase drastically as the way of the world has changed drastically.
The pandemic came out of nowhere and there was no way for companies to have prepared for what has transpired over this period of time. Now there are no excuses. With last year in the rearview and the new year approaching you will start to see brands implementing optimized sourcing strategies and leveraging technology in order to innovate, adapt, and overcome in 2022.
Dillon is the Senior Director of Sales at Suuchi. He has a long professional history in emerging SaaS environments helping brands scale to their fullest potential through leveraging technology. Dillon enjoys working hand in hand with various departments of the organization to ensure client needs are met and supply chain goals are exceeded.