Industry Companies Step Up Communication Amid Coronavirus Disruption
As the number of reported coronavirus cases increases throughout the world, delays and disruptions to the supply chain remain an issue. As a result, promotional products companies are ramping up their communications with customers in an effort to be more transparent and to smooth the order process for all involved.
On Friday, alphabroder/Prime CEO Norm Hullinger, CAS, released an extensive update bringing customers up to date on the situation regarding the coronavirus and supply chain disruption, and what the supplier is doing to mitigate it.
Cautioning that the information is constantly changing, the message said alphabroder would do its best to keep customers apprised of what it knows and potential business impacts. Hullinger’s letter also noted that factories are re-opening, but many are operating at a fraction of their full capacity. He wrote, “The skill level and job function of the workers returning will dictate how quickly a factory can resume operations. Additionally, the speed of shipment completions largely depends, not on factories coming back online and up to speed, but the raw material factories they work with—for example, if a factory can sew a bag together, but the zipper is out of stock, it must rely on a supplier with the raw materials for the zipper to come back online. Also, the reduction of tourist and business travel in and out of China has led to shortages of air cargo space. Ships are stuck in Chinese harbors waiting to unload incoming freight, which impacts the ability to move export freight out.”
The letter went on to say, “As much of this is out of alphabroder’s control, the company is focusing on the areas it can affect. This includes increasing orders from factory partners outside of China who are shipping regularly, collaborating with factory partners to prioritize open hardgoods orders based on forecasted demand and secure production lines for both new and existing orders, managing large hardgoods order inquiries to ensure the impact of the company’s inventory position is understood and leveraging the national footprint of its hardgoods decoration locations to receive products that can be shipped as fast as possible, since they are not confined to shipping to one shipping lane or location.”
From an apparel standpoint, the company said it doesn’t carry many brands that are manufactured exclusively in China. The biggest and longest-term impact to apparel will be from raw materials as China supplies the raw materials, such as fiber, yarn, fabric, buttons and trims, cartons, zippers and thread for nearly all apparel manufacturing worldwide.
Hullinger concluded, “The long-term impact of the virus still has yet to be seen. Surely there has been and will continue to be some level of disruption. However, as part of our Chinese New Year planning, we [have] increased our inventory levels during this time and we hope that this increase in inventory can help to mitigate any potential disruption in the near term. Our teams are working tirelessly to manage this situation, while also understanding the human aspect and having compassion for those who have been directly impacted by the virus. We very much appreciate your business and support.”
For domestically-produced goods, the recent challenges posed by the coronavirus have created an unexpected demand requiring those manufacturers to step up production. Akron, New York-based supplier AAkron Line announced on Monday that it is increasing production at both of its manufacturing facilities, one in Akron and the other in Bakewell, Tennessee.
Danielle Robillard, president and co-owner of AAkron Line, says, “We want to make certain distributors have options to fit their clients’ needs as imported product inventory becomes limited. By increasing production on our domestically-made products, we are able to offer them readily available alternatives.”
Phil Zolan, general manager of Cartersville, Georgia-based supplier PromoMatting, says the coronavirus and its impact on the supply chain has suddenly shed a bright light on the critical role supply chains play in the promotional product industry. He says the company, which makes more than 90 percent of products in its Georgia facilities, has not been affected and has seen a significant increase in demand from new customers who are seeking U.S.-made goods. “To meet rising demand, PromoMatting has been making strategic investments in our equipment and workforce. These investments are increasing our production capabilities while minimizing waste,” he says.
The importance of communicating clearly and often with clients is underscored by a recent post on PPAI’s knowledge community, Promo Connect. Joanne Kilpatrick of distributor Kilpatrick Creations voiced her frustration with an order placed in early February with an in-hands date of February 28. “Never once did the vendor say that these were coming from China and could or would be delayed,” she wrote. She recently found out the in-hands date would be March 11, so she had to cancel and tell her customer the items wouldn’t arrive in time for the event. “All the sales rep had to do was tell me in my RFQ that these were coming from China and I would've helped my customer pick something else.”
Keep up with this ongoing situation and access additional resources at www.ppai.org/coronavirus-information.