Reportedly, more than 60% of manufacturers were affected by the coronavirus pandemic and its consequences. There is a lot of news on retail, but not much information about other key links in the supply chains, like manufacturers. While this is a very broad category to define, you typically see small businesses involved in manufacturing who distribute furniture, electronics, or construction equipment.
What challenges do manufacturers face?
Delays and pressure
During extreme shipping delays, retailers were pressured by customers. Manufacturers were pressured by retailers and their direct customers. Ultimately, these businesses were at some moment having a tougher time than any other link in the supply chains.
Apart from the supplier delays and pressure, there is another growing challenge for the manufacturing businesses – the increased demand for direct sales. With fierce competition among suppliers, manufacturers, and retailers, more and more options appear on the market every day. It is challenging to stay in the race within such a dynamic market. So many manufacturers build a direct sales channel as an additional source of revenue and an alternative to their usual business model. It certainly can bring profit and efficiency, but new opportunities come with new responsibilities. There is a great difference in communication and sales strategy for retailers and for direct customers, which means an additional need to invest in sales, marketing, and technology. In the long run, standing out and adding a direct sales channel can make small manufacturing businesses perform better and become less vulnerable to manufacturer-retailer relationship disruptions.
Often manufacturing businesses struggle to fit their budget and try to cut costs where possible, saving on shipping. However, transportation is an extremely important part. From delivery deadlines to freight safety, many factors ultimately depend on the quality of your shipping provider. In the current manufacturing climate, it is even more crucial to secure capacity, have a diverse network of carriers, and get competitive freight rates. Proper packaging and choice of shipping partner will have a visible impact on your business and costs.