It’s a wonder how efficient global supply chains can be—until they’re not. Supply chains have experienced dramatic issues recently, and printing and packaging industries are not immune to their effects. On the opposite end of efficiency resides resiliency, a virtue endemic to more local or domestic supply chains.
Here’s what you need to know about supply chain issues and the benefits of localizing your printing and packaging.
The most obvious result from recent supply chain issues has been rising shipping costs, but it also includes disrupted transportation, longer lead times, and labor shortages related to the so-called ‘Great Resignation.’
Shipping costs have seen jarring increases the past two years. For instance, according to the management consulting firm McKinsey & Company, in August 2021, it cost six times more to ship containers from China to Europe than at the beginning of 2019.
In fact, a 40-foot container unit cost roughly $1,300 at the start of 2020 and hit record highs around $11,000 in September 2021, according to Reuters.
The six-day obstruction at the Suez Canal in March 2021 has had a cascading effect on global shipping, resulting in major delays for many consumer goods. Global supply chains can be shockingly efficient, but given their length and the thin margin of error their timelines can accommodate, they’re not particularly resilient to global shocks related to the coronavirus pandemic.
Brands also have to accommodate longer lead times due to disrupted transportation and increased shipping costs. Many international manufacturers are struggling to keep up with consumer demand or adjust operations in response to the shipping backlog.
Coinciding with the pandemic, the Great Resignation refers to the massive number of workers, particularly within the United States, that have resigned from their jobs voluntarily. It is commonly understood this is in response to stagnating wages amidst the rising cost of living and growing inequality, and protest against the lack of government protection for workers.
As far as supply chains, this means there are fewer drivers, transport workers, and employees across the wide range of industries that power global networks. According to The Washington Post, a record 4.5 million Americans quit their jobs in November 2021.
Until these economic changes improve for workers and we enter a post-pandemic world, supply chains can anticipate higher costs, longer lead times, and disrupted transportation for at least the near foreseeable future.
So what can brands do about these supply chain issues?
The most straightforward solution to many of these issues involves domesticating or localizing your supply chain and finding a manufacturer that is both agile and collaborative.
Supply chain issues have inspired brands to turn to domestic suppliers and manufacturers for printing and packaging. The less distance your packaging materials or finished printed products have to travel, the lower the risk for supply chain disruptions.
As the wisdom goes, a shorter supply chain makes for a more resilient one. A single part or material can keep an entire project delayed for weeks, and even months, while a shipment is stuck in an international warehouse or port. If you work with a domestic supplier or manufacturer, you should be able to minimize, if not avoid entirely, these delays and added costs.
Agility refers to a manufacturer's ability to quickly adapt to meet your printing and packaging needs, whether it’s through customization, shorter print runs, or faster turnaround times. An agile manufacturer will be able to adapt their inventory requirements for your orders, and even modify their standard printing process to help you realize your packaging goals.
In order to be truly agile, a printer needs to maintain open communication and be willing to collaborate. This collaboration means they are with you from pre-press and design to printing, finishing, and fulfillment, providing a one-stop solution for your printing and packaging needs. Collaborative partnerships require trust, and that’s made all the more possible when your manufacturer is domestic. For instance, you can visit their operations in person.
You can expect other benefits from localizing your supply chain, as well.
Shifting your operations or manufacturing domestically helps overcome many international supply chain issues, but also brings other benefits, such as improved product quality, stronger brand affinity, and more sustainable and ethical business practices.
When you’re able to visit a facility in person or meet your manufacturing partners face to face, you can anticipate higher product quality. Not only are you more involved in the printing and packaging process, but you can easily audit your potential manufacturing partner for any red flags. It’s just less difficult for a manufacturer abroad to let quality slide when you’re not nearby to check in routinely.
Let’s be honest: It’s nearly impossible to account for everything that goes into your operations, including printing and packaging, when you work within a long supply chain.
Can you be confident each worker is being treated with dignity and provided ethical working conditions? How sustainable are the factories and firms in your supply chain? How certain can you be that the business practices of all third parties align with your moral commitments?
By localizing your supply chain, you improve your ability to oversee more of the ethical impacts of doing business. Ultimately, you can rest more assured you’re doing right by others and the environment.
For the many consumers that want to support local businesses, you can garner stronger loyalty by localizing your supply chain or showcasing yourself as an “American-made” brand.
By working with domestic partners, you decrease your carbon footprint, which is a central element of sustainable packaging.
It’s unclear how long we can expect global supply chain issues to remain. However, regardless of whether they get back on track in the near future or not, localizing your supply chain will go far in making your business more sustainable, resilient, and better positioned for future disruptions in printing and packaging.