During the Pandemic what obstacles have you had to work through for your supply of nitrile gloves?
Over the nearly 12 months we have been working through the pandemic, we have seen so many obstacles. On the onset, there was immediate demand that challenged us in maintaining our current customer’s normal usage levels, while assisting where we could help with the significant volume needed for first responders. Then, we had to work with our factories to get replenishment stocks in right-away to keep sustain product deliveries. This was impacted by the large volume of production requests on the glove factories worldwide and the huge increase in demand on nitrile raw materials. The surge in demand for raw materials greatly outweighed the supply and that created the first delays in the supply chain. As raw material plants were able to increase their supplies, the factories were then challenged to produce for the requested need, but increased production takes time and money and that added to the delays in the supply chain. As we got towards the end of 2020, we began seeing new factories coming online which increased the output capacity available. This coupled with the increased volume of products being shipped to the US for businesses that were reopening, companies planning for US holidays, and pre-emptively bringing in product prior to Chinese New Year, created a huge burden on the ocean carriers and the ports. Ocean vessels now sailing at full capacity were coming into the US, but ports were not operating at full capacity due to COVID-19 restrictions and shutdowns causing a traffic jam into the busiest ports. We current are seeing dozens of ships at anchor waiting to unload at all major US ports.
There is more glove supply available now due to new factories. How are you working with these new vendors?
Our Compliance Team have very thorough criteria for validating new vendors. I will not place any orders to new vendors until our team has signed off completely on the factory. There are many unreliable sources that are trying to sell nitrile gloves these days and not delivering products. Additionally, there are many new factories that are popping up and we must make sure that the products they provide meet our strict requirements. We believe very highly that the SW name will always stand for quality and we want our customers to know if they are receiving product from us that they can trust what they are getting.
How are you planning your lead times from Asia?
Before COVID-19, the formula was very straight forward and predictable. We could place orders and have product shipping within 60 days and in our warehouse 30 days or less from then. Now lead times from factories are extended with production lines at full capacity through 2021. Once gloves are produced and ready to ship, securing ocean carrier availability takes upwards of a month. Once containers do ship, we are finding our product still taking the same amount of time to cross the ocean, but now are harboring outside the port of discharge at times for over 30 days. Once containers are unloaded, there are still delays with getting the product moving on the rail to destination points. Then trucker shortages are causing delays and additional fees to get it to the warehouse. When everything is said and done, you could have shipments taking upwards of 2 to 3 months in transit. Inventory planning now is about planning 12 months in advance and maintaining the uninterrupted flow.
What are some of the things you are most concerned with in the current environment?
Our focus is on sustainability. With new vendors we want to establish long term partnerships that can help our growth without impacting our product quality and reputation. With our distributors it is about helping to manage their business and expand where we can, for successful long-term partnerships with new end users. It is easy to find opportunities to sell gloves but managing our inventory for the long-term health of our customers is a necessity.
How are you planning for the increased demand requests?
In July we went into a process of allocations so that we could best monitor our inventory for our customers and meet their existing demand. As additional capacities have been made available from our factories and new partners, we were able to expand what we could offer further. It is difficult to tell customers we cannot offer them everything they want, but with the plan of making sure that we can keep a steady flow of products to our customers, we feel we are best serving them. The feedback we have received has shown they agree.
How else have you been able to maximize the amount of inventory available for your customer base?
Early in the pandemic we made a concerted effort with our factories to improve efficiencies and output. To do this we reduced the variety of nitrile gloves we were producing to limit production downtime at the factories. In doing this, we have been able to increase the outputs of our higher demanded products and ensure availability.
Michael van Sunder is SW Commercial Operations Manager and can be reached at mvansunder@swssglobal.com.