It has been about 4 months since we last checked in with you. Have you seen any improvements in Supply Chain and Demand Planning?
That is a loaded question. The answer is yes and no. On the supply side of things there have been improvements. For single use gloves there is much more supply than before, but not necessarily quality supply. There is quite a bit of lower quality inventory that has made its way to the US. On the planning side of things, we have not seen improvements. Transit time is still long due to delays unloading at the ports, as well as delays transferring to inland rail. Some ocean carriers have even stopped booking inland rail to keep containers near the ports for quick turnaround back to origin.
Even though you are dealing with long lead times from manufacture completion to delivery, does that at least mean that shipping containers are available for loading in Asia?
Unfortunately containers are even more in short supply than before. The month of May saw a number of ocean carriers cancel sailings because they did not have enough containers to fill the vessel capacity. This caused the cost for shipping to grow even more, upwards of 5 times normal rates. Limited offerings and long transit mean many headaches for planners across the country. Just-in-time inventory was broken for many companies.
With the more abundant supply of gloves available are you seeing demand normalizing?
For the standard popular offered sizes we are seeing some normalization of demand, but demand has increased tremendously for the sizes like XS, 2XL and 3XL. Those sizes were removed by many manufacturers from production so that they could create additional production efficiencies, but now demand is very high for those sizes because those sizes are limited supply at this time.
What other challenges are you seeing with the increased glove supply?
The biggest risk I am seeing right now is the credibility of the suppliers. There are many new manufacturers that have sprung up the last six months and quality is not there in comparison to many of the manufacturers who have been doing it for a long time and figured out how to produce quality gloves.
A lot of the higher quality manufacturers are based in Malaysia where the majority of glove supply originate, but we are seeing issues with forced labor at these facilities and a Movement Control Order (MCO) that is decreasing production capacity due to work stoppages because of COVID infections. This will most likely also impact the ports in Malaysia further impacting the shipping schedules and causing delays.
On top of that there are a lot of trading companies that have dipped their toes in the waters of being a glove supplier, but their knowledge regarding the product and regulatory information is not there. If you choose to take the risk of using their supply, it puts you in a difficult position should the product not meet expectations. There become more issues with potential returns with entities that are not U.S. based and therefore would be accountable should product be defective and the challenge of even returning products in this environment is high. I would not want to risk my company’s reputation or product liability against a company I did not have thorough knowledge of, but many companies are right now because the pricing is enticing.
Do you have an example of an instance when you dealt with one of these trading companies?
A couple of weeks back a trading company reached out to me about available nitrile gloves at somewhat favorable pricing, so I asked for more information from them about the product and requested data sheets on the product specification. They responded by sending me pictures of the boxes, but they could not even tell me the glove thickness. I declined that opportunity and they offered me a “mostly nitrile” glove at a very discounted price. When I asked how much of the product was nitrile, they could not tell me how much, nor could they tell me what the rest of the material was. In addition to that, the boxes were noted only as Nitrile gloves. We have seen Nitrile/Vinyl hybrids in the past, but we have stayed away from these because they are typically mostly Vinyl. Anyone that would take a chance with a glove such as these expecting nitrile properties would be in a tough spot with potential serious ramifications of injury.
Any last thoughts you would like to leave with the readers?
There will be plenty of challenges right now in the supply chain. Planners are dealing with higher cost inventory that is in transit longer while pricing is reducing. Make sure you do your homework and know your suppliers. Do not add the headaches of tarnishing your reputation to save a few dollars. It is our duty to work with manufacturers that have been legitimately qualified to ensure they are socially responsible. If we do not act with care to protect our customers economic, social and safety interests then we are failing in our responsibility as a credible brand. Quality will prevail as people get burned by the lower cost, lower quality product. We take out stakeholders’ seriously and we want people to know that they are getting quality in and out from SW no matter what.
Michael van Sunder is SW Commercial Operations Manager and can be reached at mvansunder@swssglobal.com.