Supply Chain Briefing

November 29, 2017

According to Industry Week, steel imports from 2016-17 are on track to be the lowest in almost 15 years!  What is more remarkable is that Obama and Trump both proactively limited steel imports.   Obama’s administration passed import tariffs which started the decline, and Trump ordered an investigation into whether steel imports threatened national security which might have spurred China’s recent decision to eliminate dirty capacity in an environmental crackdown.  China’s crackdown has already impacted a few of my clients.  Their manufacturing facilities shut down without notice, creating inventory shortages and service issues.  Are you thinking ahead as to what is likely to happen in your industry?  Or impact your industry or business?

What Should We Consider and/or What Impacts Could Arise?
How many business owners and executives impacted by the environmental crackdown in China were prepared?   I bet not nearly as many as those who wished they were!  In today’s Amazon-impacted world, service issues are unacceptable – not only will customers complain (if you are lucky), but they will also find another source (whether immediate or down-the-line, it has a high likelihood to occur).  How costly is it to lose a customer?  Unimaginably high for my clients!

Certainly the environmental crackdown isn’t the only impact of this situation.  The steel suppliers most likely had a bump in sales.  Were they ready to take on the new business or distracted with saving their pennies in a cutback mentality with declining sales and missed the opportunity?   As my consulting colleague said recently, the millennial generation wants to quickly share information especially if it promotes a higher purpose.  I see the same theme here….SPEED is paramount!  Are you planning for success or your worse case?  It seems obvious yet I run across many executives with the first thought to plan for worst case, thus realizing their “worst case” instead of success.  What are you planning to achieve?