Today’s supply chain challenges require strategic sourcing to meet marketing goals. Here’s what that entails.
Supply Chain Challenges Come in Three Kinds...Be Prepared for Each
They’re not just shortages: There are three kinds of supply chain challenges that affect branding and marketing, too. Here’s how to prepare for them.
Technically, there is no one such thing as a “supply chain issue” or “supply chain challenge,” or even a “shortage.” Suppliers, manufacturers, and buyers are interconnected in a complex economic web. So, when there is an issue in the supply chain, it’s not simply that suppliers are all out of a given part or material. And that complexity means that adjusting to supply chain issues requires understanding both the nature of the problem at hand and the particular supplier network you are dealing with.
Nowhere is this more obvious than in the realm of print marketing, promotional items, and branded merchandise—what we like to call the “marketing supply chain.”
The Three Kinds of Challenges for a Marketing Supply Chain
Brandon Rodriguez, our own in-house supply chain expert, outlines three basic types of supply chain challenges that are roiling the markets right now:
- Materials issues (i.e., access to raw materials)
- Labor issues
- Regulatory issues and events
Some of these challenges can be solved; others can only be “dealt with”—but it is still worth understanding all three.
Materials Issues in the Marketing Supply Chain
Any printer or manufacturer will tell you that a given run or job will have fixed costs (cost of machinery, prep time, facilities rental, etc.) and variable costs (labor, paper, ink, etc.). Both can affect production.
Take paper, for example. For years, the industry has enjoyed low prices on paper while still meeting quality standards. But now, the availability of paper has plummeted as raw material costs rise, labor shortages (and even strikes) drag on, and paper mills raise prices and sell to the highest bidders. Even printers with ample reserves are now feeling the pinch on some stock.
Granted, the situation is different for each type of stock and paper supplier. But that just means that printers must deal with their own complex web of supply issues.
So how does this affect clients trying to manage their print projects?
- Preferred printers, even ones with strong track records, might face delays if the requested paper is not in stock and cannot be easily purchased.
- To conserve paper inventory, some printers might raise prices for specific stocks.
- Prices might fluctuate wildly, depending on availability, even over the course of just a few weeks.
- Manufacturers are prioritizing higher volume clients giving others fewer choices. Print distributors generally have more paper options because of their consolidated buying volume.
What’s true of printers and paper is true of anything purchased throughout the marketing supply chain, from logoed apparel to glossy calendars. Even things like creative services to warehousing might be affected.
How to approach the challenge. The trick is having an extensive network of suppliers to choose from, a streamlined bidding process, and an open mind. There might be a smaller shop, for example, that has the paper you need in stock and can turn things around quickly, even though they are not a preferred supplier and might be a little more expensive. (Through our extensive network of supplier partners, this is how we’ve been able to help our clients with these kinds of supply challenges.)
Labor Issues and Logistics
Sometimes, supply chain issues are not a matter of some material or part being unavailable, but rather that those materials and components can’t get to buyers in a timely manner.
For all that automation has done for the industry, shipping and logistics is still a very labor-intensive industry. Labor is needed to put inventory away and pick and pack inventory once purchased. Labor is necessary to load and unload ships, trucks, and planes. And human beings still need to guide those ships, trucks, and planes to get them to their destination.
The Great Resignation in the wake of COVID-19 saw a wave of people either leaving the industry or striking for various reasons. And while some of the problems that made headlines are working themselves out—such as the huge backlog of shipping containers outside the port of Long Beach, CA—the ripple effect is still happening. (For example, the backlog of containers at East Coast ports is now higher.)
How to approach the challenge. There is not much a buyer can do to ease the labor issues of a supplier or supplier. But a buyer can factor such things into their planning. For example, suppose banners for an event need to be shipped to a dozen locations across the region; it behooves buyers to build in a few additional weeks for supplier delays and shipping delays. Since we have a team dedicated to supply chain management and sourcing, we’ve been able to consult our clients on scheduling and planning for events or campaigns.
Regulatory Issues and Events
Besides the availability of materials and labor, current events can also affect supply chain logistics. For example:
- New post office regulations have improved shipping times but also have increased costs.
- The war in Ukraine, plus general inflation, helped spur fuel costs and hence delivery and transportation costs.
- Retaliatory tariffs can hit at any time, destabilizing materials prices.
- Congress could enact laws to relieve the pressure on our ports…or open the floodgates to international trade again.
In short, the way events play out can have an added effect on supply chains, making planning increasingly difficult. These reflect not just decisions by suppliers and the employees working for them, but also by outside forces (federal and state governments, other countries, etc.).
How to approach the challenge. It’s impossible to be ready for everything. The key to survival is to have systems in place to make adaptive changes quickly and easily. For example, if a fuel surcharge means shipping is eating away at your budget, you should be able to scout out and engage local suppliers easily. If a paper strike happens in Europe, you should have a creative team that can pivot on a dime and work with a stock that is easier to obtain. Via our supplier network, we’ve fortunately had success adjusting to these factors as soon as possible.
What’s Your Marketing Supply Chain Challenge?
We’ve spent years listening to the brand stewards at many companies, and nearly everyone has had some sort of challenge when it comes to getting their branded materials organized and produced on time. What makes or breaks projects is whether the organization approaches challenges in the right way: With expanded supplier networks, advanced planning, and adaptability through technology and defined workflows.
These are precisely the capabilities that we have spent the past decade building. If you’d like to learn more about relieving the tension in your marketing supply chain, reach out for more information.