What are small exporters doing to manage supply chain issues?
While many international traders are coping with supply chain delays, there are numerous ways that small to medium-sized enterprises (SMEs) have been able to adapt and efficiently cope with their supply chains to keep the export and import channels open and moving.
Here is what some SMEs are doing to better manage supply chain backlogs:
Fully stocked international warehousing to get closer to customers
Roy Paulson, President of Paulson Manufacturing in Temecula, California manufactures a line of hazardous-work safety gear including IDC (infectious disease control) face shields and goggles that he exports to 76 countries. You can see more at www.paulsonmfg.com.
Mr. Paulson exports much of his gear to European companies, and in the past did not rely on price alone. “First of all, we are ordering our raw materials well in advance of when we need to use them,” Mr. Paulson said.
Much of his success can be attributed to very timely deliveries. When the supply chain bogged down, he set up an international warehouse in Frankfurt from where he ships container loads, maintaining a healthy inventory. As a result, his gear arrives in other European countries more quickly.
Paulson Manufacturing is a plastic fabrication company that makes Arc Flash PPE and other protective gear.
Broadening the supply chain
Gina Radke, CEO of Gally Support in Sherwood, Arkansas told IBNewsmag: “We have increased our order quantity to avoid disruptions in the future and have broadened our supply chain.” You can learn more about Galley Support by visiting their website at www.galleysupport.com.
Greenpoint Aerospace is a maintenance, repair and overhaul (MRO) company using Galley Support latches.
Increasing inventory to meet demand
Maxivolt, in Amarillo Texas, is a niche manufacturer of surge protector devices and does not follow normal business models. According to President Mark Wingate, “a philosophy we have had for well over a decade is ‘just in time manufacturing’ which just isn't for us now. When money became so cheap, we opened up our inventory for reserve investing. We currently maintain 18 to 24 months of inventory. This has been paramount to us during the supply chain issues. We literally have not missed a beat because of supply chain issues. “
Mr. Wingate pointed out that he is bypassing the middleman on supplies he receives out of Europe. “We have gone directly to the factories in the UK, Italy, and Germany to buy in bulk. By the time we pay the freight, the cost is roughly the same,” he stated. For more on Maxivolt, see their website at www.maxivolt.com.
Maxivolt manufactures specialized surge protective devices.
Managing delivery timeline expectations and shipping product
Mark Luecke, CEO of Prairie AquaTech and Medgene Labs, in Brookings, South Dakota, explained to us that, “we have focused our efforts on working with experienced freight forwarders, in addition to managing our customers' expectations on delivery timelines, which includes increased communication.”
“In some cases,” Mr. Luecke added, “we have had to get creative in terms of mode of transportation to reach the final port of destination., e.g., trucking to major transload facilities for container loading and shipment by rail to ocean vessel.”
You can see more about its powerful plant-based nutritional products at www.prairieaquatech.com.
Prairie AquaTech produces nutritional feed ingredients
Manufacturing your own components
The Grasshopper Mower company (Moridge Manufactuing) in Moundridge, Kansas, ships its patented Zero-Turn riding mowers and implements around the globe. “Fortunately, we adopted the philosophy a half century ago that we would manufacture every component possible in-house and build close relationships with other regional suppliers to avoid the delays and quality issues that sometimes arise from overseas suppliers,” explained Ray Garvey, Export Manager.
“However, the overall supply chain is so globally interconnected that even the most reliable suppliers are challenged, causing some delays and the need for more flexible production scheduling,” he pointed out.
Learn more about the Grasshopper Company at www.grasshoppermower.com.
Grasshopper Mower makes the patented zero-turn riding mower
Practical tips for managing supply chain delays
More reshoring or nearshoring of needed components. Even better - manufacture them yourself – to shorten supply chain timing. Made in USA may help your sales. But make sure all of your components, or nearly all, are truly made in USA to avoid possible litigation.
Switch to closer ports for both imports and exports to avoid West coast congestion, e.g., the Port of Houston is the largest in the US for both exports and imports.
If not already using, switch to electronic bills of lading to get trucks out faster – as much as 40 minutes or more faster.
Another time-saving strategy is to use ports that use electric cranes for transloading. They can supposedly do in an hour what reach stackers can do in 3 days.
Workforce improvement. Rather than laying them off, offer training for employees to keep them engaged e.g., training to run and maintain robotics.
Cybersecurity. Statistics show 43% of all data breaches involved SME’s and 61% of all SME’s reported at least one cyber-attack in the previous year. EXIM Bank’s Chief Information Officer, Howard Spira, recently made the following observations:
“An increasingly popular form of cyberattack is ransomware.” Mr. Howard notes that protecting your small business from ransomware, and many other threats, is usually about doing some simple things that avoid making you an easy target.
“Protecting your email system with two-factor authentication, not clicking on links that you don’t understand, making sure that you are running a modern computer with anti-virus software is very effective. 98-99% of the successful ransomware attacks are associated with the failure to perform some basic (digital) hygiene. Most ransomware attacks are attacks of opportunity, kind of like leaving your car door unlocked,” says Mr. Howard.
Creighton University’s Ernie Goss, PhD: While exports and imports have been strong, supply managers report that business confidence will worsen through the first half of 2022. Companies are building up inventories while they can. They rely substantially less on Just in Time (JIT). Their greatest concern is transportation, especially trucking. COVID is expected to be as big an issue going forward. China vs Taiwan and Russia vs Ukraine are the biggest political concerns that could affect trade.