Flexibility in your supply chains to address change : The power of large buyers
Change is happening in international trade lanes caused by disputes between countries. These changes can impact supply chains, making items more expensive or more difficult to obtain. Many supply chain professionals have experience of negotiating with large customers. They are likely to use their buying power as leverage to try and extract lower prices, longer payment terms or other perceived advantages.
If the customers do not get what they want, the (real or imagined) threat is that your business will lose orders. This is considered as normal business behavior. We should therefore not be surprised when a country which globally purchases large amounts of goods and services, will use its buying power to obtain concessions from supplier countries (called ‘trading partners’).
Change to what scenario?
The media publicity and response of share (stock) markets concerning the trade dispute could have an influence on attitudes by senior executives about supply chains being strategic rather than just a cost. Sourcing the cheapest item is not sufficient if that item is no longer available, only available from another supplier in a different country or at a much higher total cost. The unknowns concerning international trade are affecting how world trade is likely to interact in the future. Therefore, the question to ask for your organisation is ‘Change to what’? But the answer is not known – we can only evaluate and respond to scenarios developed inside each business.
To be responsive means that an underlying requirement of your organisation is to build flexibility into your supply chains. But to achieve this requires Supply Network Mapping to build future scenarios for your supply chains. To build a map, identify at least the following:
Changes in trade lanes which might occur
Nodes, links and flows in your Supply Network
Roles of logistics services providers (LSP) in each supply chain
Identify and evaluate trading rules for new supply routes
Availability, role and cost of supply chain hubs
Potential bottlenecks, lead times and wait times at border controls
Identify ex-factory costs, quality of product and service, logistics services availability and competence and infrastructure status.
With such a powerful country now using threats of trade sanctions as a negotiating tactic, we could assume that other countries with a large buying power could be as demanding on its supplier countries in the future. Flexibility in your supply chains is therefore likely to grow in importance.
Leading business executives know that intelligently designed, industry-specific supply chain solutions support their success and deliver bottom-line benefits. However, developing this expertise in-house can take critical resources away from their core business even as they navigate today’s ultra-competitive environment. Executives in a wide range of industries have turned to Tripath Logistics so they can stay focused on what they do best. From our senior leadership to our service representatives and worldwide network of agents, Tripath is committed to providing single-source supply chain solutions that optimize efficiencies, minimize costs, and deliver quantifiable value-add for every client.
Benefits of Working With Tripath :
Address all logistics needs through a single source
Make operations more scalable and adaptable
Reduce or eliminate the need for costly logistics infrastructure
Access economies of scale
Retain control and get real-time information through our web-based technology
Click on the links to learn more about our industry-specific expertise : Top Logistics Service Provider in Bangalore | Customs Clearance Agents in Bangalore | Customs Compliance Company in Bangalore
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