Suppliers Urge Ordering Early To Manage End-Of-Year Supply Chain Disruptions
Supply chain problems have wracked the global economy for much of 2021, driven by the yo-yo effect of the rebounding economy, the uneven progression of business reopenings and pandemic-related restrictions, critical labor shortages, lack of raw materials and other issues, and these same challenges are projected to continue into 2022. UPS International President Scott Price recently told the Agence France-Presse, “I half-jokingly tell people 'Order your Christmas presents now,’” as the slowdown is requiring everyone, from consumers to businesses, to think further ahead. The promotional products industry faces these same challenges and industry suppliers are preparing now to meet the demand.
“I personally think this holiday season is going to be the perfect storm of problems for a lot of companies for a multitude of reasons,” says Jason Lucash, chief development officer for supplier HPG. “Freight is at an all-time high in terms of container costs, and you can compound that with lack of space availability, port shutdowns out of Asia and then the outbound container backlog for getting containers back to Asia from the U.S. When you layer on supply chain disruptions on the production front, along with the chip shortage, raw material shortages and lack of availability when it comes to hiring staff in factories in Asia, it doesn’t make the freight matter much better. Distributors should really plan to order for the holidays now and educate their customers to do the same to guarantee product availability.”
David Miller, president of supplier NC Custom, agrees. He says, “We are seeing significant delays from overseas, plus a much higher cost for containers, which equates to an increase in cost and subsequently higher prices for the end user. There are challenges via overseas and domestic in the ongoing supply channels for those vendors that distribute only.”
The end of the year typically brings surges in certain types of promotional products, such as those associated with holiday gifting and end-of-year recognition programs. The supply chain disruptions have been a significant factor in how many industry companies are planning for the season.
“At HPG, we’ve been planning for the holiday season supply chain disruptions since March, and we honestly now have more inventory in our facilities and on the water than we’ve ever had and feel like we’re in the perfect position to say ‘yes’ to all our customers for any of their domestic stock needs,” adds Lucash. “We’ve also ramped up at Batch & Bodega and worked with our domestic maker partners to be able to scale to an increased demand on the food front. We think that there’s going to be a significant increase in demand for domestic-made goods due to the fact that distributors aren’t going to be able to have a multitude of stock choices from other suppliers. Overall, I think HPG is well suited to have an amazing holiday with the crazy amounts of inventory we have and the readiness of our domestic manufacturers to scale up above forecast if needed to help all distributors and their clients out if it comes down to last minute gifting in December.”
Maple Ridge Farms has also taken steps to meet its forecast needs for the end of the year. Jodie Schillinger, CAS, the supplier’s executive vice president, says, “Based upon the trends in employee and customer recognition, along with the food gift market and experience-gifting demand, we projected our numbers to be higher this year so as to secure our inventory. We’ve been very proactive in avoiding inventory shortages and are offering a diverse number of new gifts and price points to allow our customers more variety in their buying options.”
Schillinger adds, “We also have a fabulous early order discount program that we have promoted for years. This year, we put some muscle behind the promotion, to encourage our distributor-partners to place orders early. The earlier we all order, the better everyone can plan and take time to thoroughly enjoy the holiday season itself. We have also done a variety of diverse hiring campaigns with our local community, which are proving to be very successful. Our team and community mean the world to us.”
Many industry companies also have several structural advantages to help them accommodate shipping disruptions, from localized production to long-lasting, positive relationships with their vendors.
“We are a manufacturer of edibles, and hence are adhering to our historical production times of five to seven days,” says Miller. “I think it’s best to stick with those vendors that manufacture. There is more control over costs and the ensuing timelines.”
Schillinger says, “We would be turning a blind eye to not show awareness to these challenges facing the world right now. Over the past 40 years, we have built very close relationships with our trusted vendors. Having this rich history with our partners allows for very open communication so that we can deliver an epic, branded, food-gifting experience to our clients.”
Kate Plummer, MAS, vice president of supplier Clearmount Plastics/SIGG North America, which manufactures awards and plaques, adds, “We’re in a good position for the supply chain. All of our product is made in house in North America. So as everything is made from scratch, we’re never out of inventory. We did have a hiccup in that our raw materials were put in a force majeure due to the huge demand for plexiglass dividers. We stocked up then, so we went from a leaner operation to forecasting months in advance. We’re still able to turn things around quickly, and we’re able to pivot due to our customization if something doesn’t work out. There are the usual delays that COVID protocols have put on our factory, in that obstacles that would have been a small blip can put us back one to two days but we’re running smoothly right now.”