Tag Archive: Tariff

Keeping an Eye on Global Markets

September 1st, 2018

If there ever was a strategic topic of critical importance no matter your position in the supply chain, it is keeping an eye on global markets.  We’ve worked with clients who ONLY source materials, components and products from U.S.-based suppliers.  Yet, even they must pay attention to global markets to thrive.  Are you making this a priority?

There are countless reasons to stay informed of global markets.  First and foremost, we live in a global society. It isn’t practical to go through a day without coming into contact with products, services, people, currencies and more from around the world.

A few additional reasons to keep an eye on global markets:

  • Interconnected world – We live in an interconnected world.  A political risk in Asia can impact the price of your materials.  Or, a shortage of oil or gas (as an example) in one country can impact the price and availability elsewhere.
  • Economy & currencies – Currency exchange rates will have an impact somewhere in your supply chain whether or not it touches your product or service.
  • Tariffs & trade – Tariffs certainly can have an impact.  The impact can be far reaching and can be from areas that don’t directly touch your organization. In this case, you might have short-term pricing impacts or long-term strategic impacts of where to locate manufacturing or which countries and markets to pursue.  Hopefully, you are considering both.
  • Global customers – There might be unique opportunities in one part of the world to utilize your product or service with a greater benefit realized than in another part of the world.  Are you considering your options and expanding your mind to the possibilities?
  • Risk – There’s no doubt that mitigating risk alone is reason to keep track of global markets.  For example, earlier in my career when there were issues getting materials out of Brazil, we wouldn’t have been able to service customers if we hadn’t planned for a backup supply elsewhere in the world.  Similarly, we would have gone out of business if we relied on only local suppliers when a major hurricane hit our manufacturing plant.  Every local business was under water except us and even with a plan we were affected – were shut down for a short period of time because our employees could not get in or out of our facility.

Keeping an eye on global markets can become a full-time job. Clearly, few, if any, clients can afford that.  Thus, pursue ways to collaborate with customers, suppliers, trade associations and more to leverage insights. Minimally, put aside some time on a daily basis to watch for key trends.

 



Tariff News & Impacts….Whirlpool Adds People; LG Raises Prices

January 29th, 2018

Supply Chain Briefing

Tariff News & Impacts….Whirlpool Adds People; LG Raises Price|
President Trump just announced that the U.S. would impose a tariff up to 50% on large residential washing machines.  Almost immediately, the news started to emerge.

According to an Industry Week article, Whirlpool plans to add around 200 jobs in their Ohio facility and announced plans to increase investment.   On the other hand, according to the Wall Street Journal, LG announced the intention to increase prices and they also plan to open a factory in Tennessee later this year.  No matter the exact outcome, trade decisions are changing our landscape significantly.  

 

Trade Decisions Will Impact Your Business
Assuming you are not in the washing machine business, the key question is how will these seemingly unrelated trade decisions impact you and your business?  Without a doubt, it will impact you in more ways than you can imagine!

What Should We Consider and/or What Impacts Could Arise?
Thinking about some of the more likely impacts to you and your business from this tariff, let’s start with people.  If you manage a manufacturing company in Ohio (near Whirlpool), you might be in fierce competition for people. 

Currently, we have many clients struggling mightily to find top talent.  Thus, it would be wise to pay attention and get ahead of this curve.  If you are in Ohio, perhaps you should look at how to retain top talent, as well.  The same holds true in Tennessee – certainly starting a factory will require a ramp up of talent.

Impacts in Addition to human capital
There are vast impacts regardless of your location. 

  • Do you use the same materials in your manufacturing process?
  • Have you checked in with your supply chain lately?  
    • Will they be geared up to support you or have you ignored them and don’t know what might happen as production ramps up in the U.S.?  
  • Have you provided a forecast lately? 
  • How about the impacts on your transportation and logistics infrastructure?

Other Impacts
Pull your team together every so often to think about what is going on in your industry and extended supply chain and what is likely to impact your business.

Be proactive to leverage opportunities instead of chasing your tail.