The policy changes and new tariffs created over the last few years have reshaped the manufacturing industry, not only in the United States, but around the globe. From shifting supply chains for raw materials to rethinking where and how to manufacture finished goods to reach buyers in the most economic fashion. These changes require a rather stable and established industry to become agile once again.
Agility in Supply Chain
Adapting to change can be challenging, and depending on where change takes place, costly. Take for example the supply chain for steel-manufactured goods. Enterprises sourcing steel from international suppliers suddenly faced a 20% or greater increase in their purchase price in an effort to make domestically-sourced steel more attractive. Beyond the sudden cost change there are long-established logistics that suddenly must be reworked to allow for more competitively-priced suppliers to be feasible. The change is felt by both large and small manufacturers, but in different ways.
A smaller manufacturer does not have the buying power to negotiate a lower price per tonnage, yet often will have more flexibility in logistics to receive from different suppliers, while the larger manufacturer has more invested in a well-tuned supply chain, meaning a rework to buy from other sources will be a time-consuming and costly endeavor.
Enter Technology
We continue to see a rise in business intelligence (BI) solutions on supply chain aiding managers to make better decisions, predict pricing fluctuations, and adapt faster to changes in legislation and overall supply landscape.
Procurement Predicament
It’s been said that the majority of procurement is planning for the worst case scenario, though the greatest procurement “artists” are turning the evolving landscape into an opportunity to create better sourcing processes, adopt new technology, and build greater adaptation to change in the respective industry.
Supply Chain Changes Aren’t Cheap
No matter the size organization you run, changes to your supply chain aren’t cheap. Regardless if your working toward lowering supply chain costs, dealing with rising costs, or struggling to acquire enough inventory for a large order, ENGS Commercial Capital, LLC can help with cash flow challenges to Move Your Business Forward. Contact your ENGS representative today to learn more about the right working capital solution for your business.