All posts tagged: branded merchandise

More Manufacturing Slowdowns as Chinese Factories Face Power Plant Shutdowns, Electricity Rationing

Chinese factories have been working hard to keep up with global demand as they recover from complete COVID-related shutdowns in China’s manufacturing sector, both earlier in the pandemic and more recently.

sixtwentysixMore Manufacturing Slowdowns as Chinese Factories Face Power Plant Shutdowns, Electricity Rationing
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U.S. Job Growth Strong, But Industry Hiring Difficulties Remain in Promo

The U.S. added 943,000 jobs in July, according to the Bureau of Labor Statistics. This is ahead of analysts’ expectations and helped push the country’s unemployment rate down to 5.4 percent. Tracking this growth, The Conference Board’s Employment Trends Index increased again in July for the fifth consecutive month, reaching 109.8, up from 108.96 in June.

“The Employment Trends Index remained on its historically strong upward trajectory, suggesting rapid job growth is likely to continue over the next several months,” says Gad Levanon, head of The Conference Board Labor Markets Institute. “This high mark comes off the back of nearly one million new jobs added in both June and July and a steep decline in the unemployment rate.  However, recruiting and retention difficulties—and rapid wage growth—are expected through the summer, particularly in industries key to the reopening of the economy, such as food service and leisure and hospitality.  The rapid wage growth is likely to lead to higher inflation in the coming year.”

Levanon adds, “Despite the still-high unemployment rate, many employers are having difficulty finding qualified workers. According to the National Federation of Independent Business, 49 percent of firms reported being unable to fill open positions in July—an all-time high. For many of those currently unemployed, job-search intensity remains low due to an array of factors: enhanced unemployment benefits, fears of getting infected, a lack of childcare, and interest in pursuing and preparing for a different type of career. Going forward, we do expect economic activity in in-person services to be negatively impacted by the current resurgence of infections fueled by the ‘Delta’ variant. While this Delta wave may produce slight slowdowns in hiring, we expect job growth to remain very strong overall.”

Businesses in the promotional products industry are approaching hiring from new angles to manage the tight labor market. Dawn Conway, CEO of distributor Boost Engagement in Dayton, Ohio, says, “We have been affected; it has been challenging finding candidates to fill entry-level positions, specifically warehouse associates. The most successful step in recruiting talent is referrals from our employees. We have a points-based referral program that is heavily promoted through our proprietary engagement platform, which is one of Boost Engagement’s core offerings.”

Kevin Walsh, CAS, president of supplier Showdown Displays in Brooklyn Center, Minnesota, says, “We’ve had to become more creative, flexible and aggressive. Pre-pandemic, Showdown had built a healthy pipeline of prospective employees as a desirable employer and fun place to work. Those prospects and that pipeline has evaporated post-pandemic. As a result we’ve taken multiple steps to increase interest for applicants and attract the type of team member that wants to be part of Showdown Displays. This includes; No.1, increasing our existing referral bonus program for associates, No. 2, offering signing bonuses to new employees, No.3, increasing entry-level rates—as well as the subsequent rates for existing employees—and No. 4, re-instating our profit-sharing program. It’s a competitive market out there so offering a suite of incentives is required.”

Labor shortages are not confined to the U.S.  Yesterday, The Wall Street Journal reported that as global demand for goods surges, Chinese factories are having difficulty filling jobs because many young people are rejecting factory jobs in favor of service-industry jobs that pay better and migrant workers are staying home amid COVID-19 fears. The story goes on to say that the trends may be indicative of longer-term demographic changes, including a shrinking labor pool.

sixtwentysixU.S. Job Growth Strong, But Industry Hiring Difficulties Remain in Promo
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The Story Behind The Supply Chain Trouble…

Global sourcing experts weigh in and provide strategies for navigating the disruption.

Below are highlights from the story by Christopher Ruvo

 

The supply chain disruption that’s affecting the promotional products industry and virtually the entire global sourcing network probably isn’t going to relent anytime soon.

Still, there are strategies and practices that suppliers, like other importers and product sellers, are implementing that will help mitigate issues to the extent possible.  That’s the message from global sourcing experts outside promo who work on supply chain issues.

“The supply chain crisis is one which is going to take a while to sort out, but there are many ways of doing so, and combining a number of techniques may help us to sort it out sooner rather than later,” says Teri Shern, co-founder of ConexBoxes, a provider of steel storage container solutions.

Relief in 2021 Is Unlikely

By now, most promo pros are familiar with the impact of supply chain upheaval on the industry. Fueled by issues tied to COVID-19 like societal shutdowns, labor shortages and a gigantic global bounce-back in demand for all manner of products following the economic lows experienced in the coronavirus’ early waves in 2020, the supply chain troubles have led to stock shortages, higher product prices, increased delivery/transport costs, longer production times and delays in delivery of orders, among other headaches.

 

New fiascos for promo are emerging too, with apparel decorators now reporting shortages of key materials like screen-printing ink.

 

The big question in promo – and in all industries affected by the upheaval – is when will things get better?

Supply chain professionals believe troubles will persist into 2022 and potentially beyond.  “There’s a lot of fundamental restructuring going on as a result of the pandemic-induced demand shifts and geopolitics that we are probably 12 to 18 months away from being in a new steady state,” says Aaron Alpeter, founder of Izba Consulting, a supply chain consulting, outsourcing and technology firm.

Similarly, Patrick Penfield believes it will be at least the end of 2022 before global supply chains can settle into something like a new normalized stability.

“You have the delta variant causing issues for supply chains now and you could have intermittent disruptions like that throughout next year,” says Penfield, a professor of practice in supply chain management and director of executive education at the Syracuse University Whitman School. “Those interruptions make it difficult for supply chains that are already overwhelmed to catch up.”

The problems could intensify in the fourth quarter, according to sourcing pros.

As just one example of how that might look, retailers could be scrambling to get products that were produced overseas out of shipping containers that have been delayed in delivery/unloading and into their distribution centers and then onto shelves. That could lump considerable extra weight on already overstressed domestic transport providers – a pressure that ripples throughout markets, including the promotional products industry, contributing to backlogs and delivery delays.

“Getting timely deliveries will be a challenge,” Penfield predicts. Transport services are likely to be more expensive too, given planned surcharges from carriers like FedEx and the Postal Service.

 

Speaking broadly about the global supply chain, some sourcing pros think there’ll be bellwethers to look for that signal the return of stability and relative normality.

“Right now, the secondary market for parts is very hot, which only happens when there’s a supply imbalance and poor planning on a macro level,” shares Alpeter. “You’ll know that we’re in a new steady state when the arbitrage opportunity for parts and components begins to evaporate.”

Even when that happens, though, prices for things like air and ocean freight may remain well above their pre-pandemic costs – a potential reality that could mean higher product prices in promo and other industries are here to stay as such expenses factor into what promo suppliers are obligated to charge per product to remain viable.

“I think you’ll see prices for air and ocean stabilize, but they could stay elevated long term,” Alpeter says. “Going back to 2018 – I don’t see that happening.”

Best Practices

There’s no magic spell to cast to cure the supply chain ills. Even so, there are things companies that import and ship product can do to cut paths through the jungle of complications. Penfield recommends working closely with freight forwarders to maximize supply chain efficiency. “They can help you minimize your costs,” Penfield says. “They can also provide advice on things like which ports to use given conditions. You have to engage with them to leverage their expertise.”

Another smart tactic for suppliers would be to beef up inventory levels, ordering in advance and carrying more stock than would normally be the case. Leading proactive promo suppliers like Polyconcept North America, Gemline and others have already been executing this strategy for months. “You want to have enough inventory to protect against disruption,” Penfield says.

 

As companies build inventory, they should do so strategically, stocking up on best-selling SKUs rather than wasting time, expense and precious cargo space on items that generate relatively marginal sales. “It’s a good time to look at what’s selling and what’s not selling and make decisions accordingly,” Penfield says.

The strategizing should also include proactive planning and making potentially difficult purchasing decisions based on marketplace realities, supply chain constraints and costs.

Alpeter gives an example. He’s working with a brand whose factory has said that it will only be able to support a portion of the requested amount with the current component commitments it has from vendors. The factory feels it can produce a higher portion of the requested amount but would need to increase the bill of materials dramatically to secure components on the secondary market.

“By evaluating this in advance in the summer, the brand can evaluate the trade-off between reduced sales and lower margin, as well as come up with a broader business plan, as opposed to having things hit all at the same time and potentially making emotional and unsound business decisions,” Alpeter says.

Meanwhile, Penfield and others say that reducing the amount of packaging used to ship product from overseas is a smart way to get greater quantities of products to domestic shores faster. “Shipping full container loads can help immensely,” he says.

Longer term, promo suppliers should be working to automate processes to reduce reliance on labor. More automation makes companies less susceptible to labor shortages that can slow down production and fulfillment when there’s simply not enough staff. Suppliers in promo are making steps in this regard.

They’re also executing another long-term improvement strategy recommended by global sourcing experts, and that’s diversifying the countries and regions from which they source products, which makes supply chains more resilient and less vulnerable to disruptions that can come from natural disasters, COVID shutdowns, labor strikes, and societal unrest that may occur in any one area and cripple operations at key factories.

Penfield notes that geographic sourcing diversification will include companies increasingly looking to source closer to home, such as within their own hemisphere. More could – and should – look for domestic sourcing options where possible too, advice that promo distributors could also take. “Look locally and find domestic providers at least as an alternative,” Penfield says.

“While the current supply chain challenges are severe, they’re also about exposing inefficiencies in different areas,” says Mario Veraldo, a 25-year veteran of the global shipping and logistics business who is CEO of MTM Logix, a supply chain and logistics company. “So, while there is no silver bullet answer to the disruption, you can start improving things now by focusing on specific areas that feed into the supply chain.”

Source: PROMOGRAM on

 

sixtwentysixThe Story Behind The Supply Chain Trouble…
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Companies Focus on Mask Innovation

Happening at retail and in promo, some manufacturers are aiming to produce masks with enhanced performance features, breathability and comfort, especially as summer takes hold. Still, innovation comes with risks.
Come July, Japanese sports equipment manufacturer Yonex plans to start selling face masks that contain xylitol.

Yonex typically uses the material, which absorbs heat and wicks sweat, in the apparel it produces for the Japanese national badminton team and professional tennis players.

Since Yonex pivoted to selling face masks during the coronavirus pandemic, the company with a 74-year history felt the material could be used to create quick-drying, antimicrobial masks that enable wearers to stay cooler and more comfortable on hot days.

“As people spend more time wearing masks against the coronavirus, we hope our technology will enable users to keep cool during hot weather, even if only a little bit,” a Yonex spokeswoman said, according to The Japan Times.

While the Yonex masks are particularly available in Japan, they highlight what some feel will be a growing trend at retail and in the promotional products marketplace as mask-wearing remains increasingly common amid the continuing COVID-19 threat – namely, that manufacturers are going to innovate, trying to build more performance-enhancing features into face coverings.

“We believe that more innovation is coming in face masks for people to wear while performing work, playing sports and engaging in other activities in warm environments,” said Jeremy Lott, president of Top 40 promotional products supplier SanMar (asi/84863).

Issaquah, WA-based SanMar is already making progress in that regard, Lott said. He noted that the company’s Port Authority Stretch Performance Gaiter (G100) comes in a performance fabric. Most of the masks SanMar makes are cotton, but they’re outfitted with Sciessent’s Agion, an antimicrobial treatment that only activates when it needs to defend against microbes, Lott said.

Meanwhile, Allmade (asi/34341) has already developed a mask innovation. The apparel supplier has created the Allmask Tri-Blend Face Mask. Lightweight and breathable for the summer months and beyond, the mask is a unique blend of 50% Repreve polyester made from recycled plastic; 25% organic cotton, which is U.S.-grown without chemicals; and 25% TENCEL Modal. Each mask consists of an average of one recycled water bottle.

“This tri-blend is a great performance fabric,” Moor said. “The differentiating ingredient we use – Modal – really helps with moisture-wicking and odor.”

In part to demonstrate the mask’s comfort and performance capabilities, Moor recently wore one as part of a Memorial Day-related fitness challenge, which he documented on Instagram.

When it comes to mask innovation, manufacturers need to proceed smartly and ensure they’re complying with standards established by the Food and Drug Administration (FDA), some promo suppliers say. “It’s a risky area,” Chris Blakeslee, president of California-based Bella+Canvas (asi/39590), said of experimenting with fabrics and treatments on masks.

Bella+Canvas is producing about 100 million masks per week now. Most are a cotton/polyester blend that Blakeslee says naturally keeps them cooler and more breathable. The company doesn’t plan to expand beyond that to different treatments and the like, Blakeslee said.

“Many of these treatments, like moisture-wicking chemicals, agents, water repellants and various bio antimicrobials have never been tested for inhalation safety,” said Blakeslee, adding that brands are doing a poor job of adhering to FDA standards regarding masks, such as that all body-contacting materials must be disclosed on the label. “Eventually,” said Blakeslee, “one of them is going to get nailed.”

Back at retail, some companies are definitely pressing forward with mask material and treatment innovations. Mizuno Corp., for instance, is making masks that feature a soft-stretch tricot material that normally would be used in the sportswear/athletic equipment maker’s swimsuits and track and field apparel. Another Japanese firm, knitwear maker Knit Waizu, is producing masks with icepacks, The Japan Times reported.

Such examples indicate that more new developments on mask fabrics and performance could be in the cards. Companies in promo, sporting goods, fashion and other industries have turned to selling personal protective equipment amid the coronavirus pandemic in order to meet rampant demand and help fulfill a public safety need.

 

Original Source: https://www.asicentral.com/news/newsletters/promogram/june-2020/companies-focus-on-mask-innovation/

sixtwentysixCompanies Focus on Mask Innovation
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