by Mitchell Rona, Executive Vice President #GlobalSourcerer, blogs on Supply Chain Relationships
It’s an old expression that has been used to describe loyalty in everything from dating to sports to politics, and it resonates in today’s business world, particularly with regard to suppliers.
From the global procurement perspective, 2021 will likely be another year to stay put with existing supplier partners. Forming these relationships requires significant investments of resources, time and energy. For this reason, the relationships should be respected and maintained on both sides. The value of a long-standing supplier partnership is invaluable when the inevitable “brush fire” occurs; trust, familiarity, and history enable suppliers and customers to work together collaboratively to address various bumps in the road. Addressing these unavoidable issues can be far more challenging with a new supplier, because trust and shared experience are not yet established. This can lead to further disruptions.
Now, as much as any other time in the recent past, maintaining a secure supply chain is truly a full-time job. Pricing pressures, production interruptions, and logistics snags are all part of the global sourcing give and take. However, it is not that often that all three of these complications converge on us at the same time as they did in the last year. As a result, the length and depth of each of these hitches had the potential to hamper us for longer than usual. In addition, the tariffs imposed on China two-plus years ago will likely remain for the foreseeable future. While not fully baked into the cost of goods, based on the current political landscape, tariffs appear to be part of our future for a while longer.
SIGMA’s supplier partner network is very stable and is constantly undergoing analysis and improvement. Due to our scale and nearly four decades of experience, our global logistics are strong and reliable. Our ability to hold and maintain JIT stocks, even extra when needed, have allowed us to weather most challenges. Our warehousing facilities and transportation networks enable us to meet the changing dynamics and demands of the market nimbly, skillfully, and efficiently.
Collaboration and cooperation seem to be the right approach to managing the next 12-18 months while we watch how global markets react and change. In spite of the present landscape, quoting activity and opportunities are still very strong. If a buyer decides to move to a new source, he or she needs to understand that all the challenges in the global markets today will lead to lengthier development timelines. If establishing new supplier partnership will truly deliver long term benefits, it can be worth the wait as long as you set the proper expectations internally. Generally, attempting new supplier relationships for quick hits and short-term gains is doomed to fail.
SIGMA OEM is not immune from the challenges all are facing in the global sourcing world today. But our long history and experience have helped us and prepared us for the obstacles, roadblocks, and curve balls coming our way each and every day. We are more poised and focused than ever to help US manufacturers to outsource critical components with great supplier partners and best-in-class supply chain and logistics. Customers will judge not by the problems that arise, but how we stand up, accept responsibility, and take corrective action. In these dynamic and challenging times, customers know they can rely on our dedicated team of experts, working diligently each and every day to deliver SIGMA’s industry leading quality and service.
So for now, we plan to keep dancing with the ones who brung us!