Riding The Global Trade Roller Coaster in Silicon Valley
Are you holding on tight as we ride the geopolitical roller coaster of world trade uncertainty? 2019 predictably has become a year of uncertainty for companies, and especially for supply chain-heavy companies that are so prevalent in Fremont’s innovation corridor. After more back-and-forth play around Brexit than a Wimbledon match, all we have left is uncertainty. Add to that confusion the U.S.-China tariff and trade war that has now eclipsed other trade issues. And while maybe not technically a disruption of the supply chain, a 25% price increase poses another significant loop-the-loop for the industry.
Companies thrive under certainty. We can plan; we can focus on growth; we can deal with the smaller, unforeseen roadblocks. But when uncertainty and change become overwhelming, we become stressed, and not just as human beings, but also as companies. We get into whack-a-mole mode and are unable to focus on strategy.
Several months ago, amid growing uncertainty of conditions impacting global trade, I was having a conversation with a respected industry colleague, Ben Hazen, Ph.D., Associate Professor of Logistics and Supply Chain Management at the Air Force Institute of Technology. We were discussing various strategies for companies such as ALOM that are highly invested in global trade, to navigate these uncertain times. The result of that conversation, although neither of us knew it at the time, would be a collaboration to co-author an industry white paper titled, “The New Global Trade Environment — A Roadmap for Sourcing Across Borders in Uncertain Times.” Our objective was to help company executives find a way to succeed.
As leaders, we must deploy strong contingency planning in an uncertain world. We must develop multiple strong suppliers and align the supply chain around values, locations, and market needs. We must also align pricing; instead of offering fixed sales pricing when component cost can vary so much, companies should integrate agility as a core competency. When dealing with plants and long lead times, fast reactions may be tough. But companies survive only if they are able to redesign, redirect, and reengineer products, services, and the supply chain in real-time. How fortunate we are in Silicon Valley; no other place is more accustomed to (and built on) agility and innovation. It is time for supply chain pros to leverage that heritage.
For now, and quite likely for the extended future, we are on the roller coaster. Be prepared for uncertainty. Here we go!
Download the full white paper here.
ALOM is a global supply chain management services and solutions provider serving as a partner to its Fortune 100 customers in the technology, automotive, government, medical, telecommunications, and utility/energy sectors. Headquartered in Fremont, CA, its expert team of strategists, technology engineers, and supply chain specialists operate globally from 19 locations.