Foreign Trade Zones (FTZs) offer numerous benefits to businesses operating in California, especially in light of the current tariff rates of 30% on imports from China and 10% on imports from other countries. These zones are designated areas where goods can be imported, stored, and manufactured without being subject to customs duties until they enter the U.S. market.
VMI (vendor managed inventory) is the process where the supplier manages the customer's inventory so that the customer has the "right" item in the "right" place at the "right" time to ensure high service levels, efficient and productive operations, and the least amount of inventory tied up unnecessarily. The best VMI programs ensure that the end-to-end supply chain gains with both the supplier and the customer achieving improved results or benefits.
As revenues remain volatile, disruptions plague supply chains, and interest rates remain high, executives' ability to build revenue, margin and working capital predictability and improvement takes on an elevated importance.
Industrial manufacturers are experiencing slumps across the board. The good news is that customers are not canceling orders; however, they are delaying BIG TIME.
Disruptions abound no matter the supply chain. Aerospace has been particularly hard hit. Boeing's issues have plagued them the entire year.
If you follow the stock market, you might think the economy is strong. As consumers, we are frustrated with the price of everyday supplies such as food, gas, and housing.
The world faces economic headwinds. According to the Economist, Europe’s economy only grew at 4% this decade as compared with 8% of the United States and is struggling with a triple shock of the energy crisis, surging Chinese imports, and the threat of tariffs from the United States.
The risk of China has increased dramatically over the years. Early on, executives were concerned about intellectual property theft. Although that is still a concern, there are much bigger issues.
If you are dependent on any region, non-friendly country, customer, supplier, material, or anything noteworthy to your success, you must diversify. Although this concept has always been true, the pandemic highlighted the critical importance. Some companies simply lost their source of supply overnight and have not recovered if not diversified.
The supply chain is in a constant state of disruption. As we discussed on Supply Chain Chats, simple backup plans are no longer enough. In fact, you can look at recent events and determine if a backup is sufficient. Starting with the pandemic, of course, most if not all companies didn't have a sufficient enough backup plan.
