Are you as sick of hearing about “supply chain delays” as we are? It seems like there is no end in sight, just when things start to ease up, something else manages to slow it all back down again. Everything seems volatile but there are a few things we’re noticing in the market that are worth sharing.

What to be prepared for:

It is no secret, price increases are happening. You’re feeling it, there is no way around it and its a trickle effect. Unfortunately, it is not going anywhere; in fact, we are predicting that suppliers are setting the prices as the new bar; we do not foresee them going back down once the recession and economy improve.

Increased delays in customs. No matter how much due diligence you do to help ensure a quick and smooth customs inspection, it is overloaded so delays can be expected.

Lead times are also increasing. It’s bad enough that the prices are going up and international shipments are taking longer to get through customs, but now, for products to take longer to make…triple whammy. This boils down to the ability to get the proper components and supplies in the the door to manufacture the product, and sufficient staffing.

It is not all doom & gloom, we keep seeing glimmers of certain materials and components making a turn-around, where prices aren’t so high and/or lead times are manageable. As a supplier keeping a close eye on the market, there are things we are doing to stay ahead of things as much as possible.

What are we doing at Xymox to help reduce the pain for our customers?

Although we don’t have a magic wand we can wave and make it all better, there are things we are doing to take some extra stress off our manufacturing floor as well as our customers:

• Purchasing higher quantities of supplies when the lead times are extra long and/or to get price reductions.
• Qualified a medical certified, USA based, PCB supplier to not only diversify our supply chain but also reduce cost and international shipping delays.
• Made changes to our scheduling to free up manufacturing capacity to allow for quick turn orders.

 

We’re hearing from our customers that diversifying and/or reshroing their supply chain has made a huge impact.

Diversification involves spreading out production and sourcing across multiple suppliers and regions to reduce dependence on any one supplier or location. This can help to mitigate disruptions caused by natural disasters, geopolitical events, trade disputes, or other unforeseen circumstances.

Reshoring involves bringing production back to the home country from overseas locations. This strategy can help to reduce the risk of supply chain disruptions and create new jobs, however, it can also lead to higher costs and other challenges.

5 reasons why diversification and reshoring are important:

1. Reduce supply chain risk: By diversifying suppliers and locations, businesses can reduce their vulnerability to supply chain disruptions. For example, if a single supplier is hit by a natural disaster or suffers from a labor strike, a diversified company can rely on other suppliers to maintain production.
2. Improve supply chain resilience: Diversification and reshoring can help to improve the resilience of supply chains by reducing the potential for bottlenecks or shortages. This can help to ensure that critical goods and services are available in times of crisis.
3. Mitigate geopolitical risks: Diversification and reshoring can help to reduce the impact of geopolitical risks, such as trade disputes or sanctions. By having multiple suppliers and locations, businesses can adapt to changing circumstances and reduce the risk of disruptions.
4. Enhance local economies: Reshoring can create new jobs and investment in local economies. This can help to support economic growth and provide opportunities for local communities.
5. Promote sustainability: Diversification and reshoring can help to promote sustainability by reducing the carbon footprint of transportation and improving the environmental performance of supply chains.

While qualifying a new supplier does cost time and money, it costs far less than getting into a line-down situation and having to scramble to figure out the next step if something goes awry with your current supplier.

Let us help you! Contact us today.

 

Looking to learn more on finding quality suppliers to work with?

Check out our checklist on 10 Things to Look for in a Supplier, and this blog post on How to Know if a Supplier is Financially Stable.

Price, lead time, and quality can change drastically from supplier to supplier, it is critical to do your due diligence to avoid problematic vendors!