In this week's edition of The Backorder:
- Talent shortage threatens US manufacturing growth
- Success secrets from the CEO of a recycled homewares brand
- 5 tips for negotiating better supplier contracts
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In supply chain headlines
- US manufacturing rise tempered by talent shortage. The latest report from Deloitte and The Manufacturing Institute reveals there could be as many as 3.8 million new jobs required in the US manufacturing sector between now and 2033 – and not nearly enough workers to fill them.
- Air cargo market growth rises for fourth consecutive month. DHL has released its Air Freight State of the Industry report for March 2024, which indicates continued growth for the sector after a strong pre-Chinese New Year surge.
- Historic regulation changes welcomed by Australian Post. The changes designed to modernise Australian Post and support a more financially sustainable enterprise have begun to roll out, writes Joseph Misuraca.
Mini-quiz: How well do you know supply chain management?
1. Which of the following is not an internal supply chain risk?
a) A disruption to your production schedule
b) Your supplier declares bankruptcy
c) A key employee resigns from your company
d) Inaccurate demand forecasting
2. Which of the following is not an external supply chain risk?
a) Failure to have a contingency plan in place for disruptions
b) A new governmental policy affecting trade
c) An unreliable supplier not delivering on time
d) Unexpected shifts in consumer demand
3. Which of these KPIs is not directly related to order fulfilment?
a) DIFOT
b) Average lead time
c) Throughput yield
d) Dock-to-cycle time
(Scroll down to reveal the solutions)
Giving materials new life – Meet Brian Walmsley
We recently chatted with Brian Walmsley, CEO & Founder of ReBorn – an Oxfordshire-based recycled homewares brand – to see what life's like for UK manufacturers in 2024. Here's what he had to say:
Brian, please tell us a little bit about ReBorn.
"ReBorn is Giving Materials New Life. We turn waste into stylish homewares, all made locally in the UK from recycled materials. [Our products are] also circular by design, meaning they can be repaired or recycled again at end life."
What have been some highs and lows of running a successful recycled manufacturing brand?
"Launching the range and seeing it on shelf in John Lewis was hugely exciting. Since launching in January, we've already saved more than 8,000kg of waste from landfill and 119 tonnes of carbon emissions. Establishing manufacturing in the UK was very challenging but rewarding. Getting funding before any revenue was almost impossible!"
What are your top three tips for success in business (or life in general)?
"1. Get feedback all the time from customers and stakeholders (even when harsh). 2. Genius lies in leveraging the unique skills and connections in your network. 3. Invest in living life to the full with your family and friends."
Can you recommend any books or podcasts for our readers?
"Doughnut Economics by Kate Raworth changed my life and career, and should be recommended reading at all business schools. For podcasts, I love The Rest is Politics, Desert Island Discs, and The Climate Question."
Do you have any parting advice for our readers?
"Find a powerful coach or mentor, especially during moments of transition in your career. I was lucky enough to do this with the author and coach, Rasheed Ogunlaru. Working with Rasheed was an almost mystical experience, identifying and acting upon core beliefs of love and self-knowledge – that laid the framework of everything that has followed in my career."
5 tips for improving supplier contract negotiations
- Know your stuff. Your knowledge is the most powerful tool you can bring to a negotiation. Research the market thoroughly to ensure you understand industry standards. Learn about your suppliers’ competitors, their pricing structures, and how they like to do business before discussing contract terms.
- Be clear about what you bring to the table. You need to know your strengths: the things you can leverage to get better deals. Don’t be afraid to mention alternative suppliers, market conditions, and minimum order volume commitments during negotiations.
- Nurture your vendor relationships. You’re human – and guess what? Your suppliers are humans too. Treat them as such by prioritising friendly, collaborative communications. Invest time into building trust with your suppliers; it goes a long way towards securing better contracts and long-term partnerships.
- It’s not all about the money. Be prepared and willing to negotiate beyond price. Consider other areas of the contract that may impact cost and risk, such as payment terms, warranties, reliability, and service levels. Seek mutually beneficial terms and be prepared to compromise on certain conditions to ensure your main goals are achieved.
- Maintain meticulous records. Pay attention to detail and document everything – all your agreements, terms, and commitments – to prevent disputes further down the line. Once you’ve chosen a supplier, measure their performance over time using supplier management software. Then leverage that performance data to renegotiate better terms later on.
Mini-quiz solutions
1. b) Your supplier declares bankruptcy
2. a) Failure to have a contingency plan in place for disruptions
3. c) Throughput yield
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