This article was originally published by BIC Magazine. To read the original posting of this article, click here.
Only a few months ago we were brimming with confidence and enthusiasm. Suddenly, we snapped back to reality.
Blue skies transformed into storm clouds, and we boarded up to prevent disaster. Still in the eye of the storm and waiting for the disruption, the question is not if your supply chain has been disrupted, but rather how has your supply chain been disrupted?
Traditional market indicators like iron ore, copper, nickel and scrap belie the demand destruction that’s taking place. We’re in an environment of fewer orders for inventory, less production volume and uneven, unpredictable demand. While we look at short-term indicators that point to normality, the liquidity boom is disguising the long-term repercussions. The backside of the storm has yet to reveal the impact of the disruption, and we’re left in a fog of uncertainty.
In times of crisis, many take a high-level approach to managing dollars. This malady takes some time to materialize in terms of the resulting service voids. We know that lower prices are often associated with longer lead times. As liquidation takes place, holes in inventory are inevitable and service levels suffer. This, in fact, is happening today and must be addressed to ensure the availability of critical parts and basic operational commodities.
This leads to basic questions you should ask. Have you had a strategic supply chain discussion with your preferred suppliers? What capacity are your suppliers operating at, and how are their suppliers maintaining raw material on hand? Are they in a position to serve you to the same level as they did in the past?
Large-scale distribution focuses on high-volume, high-turn, low-transaction cost business. Large-scale distributors are built for this market segment. But are they pragmatic in looking at their commodity inventory given these challenges? What about the nonprice sheet, low-volume, lowturn items? These are all items and services the Goliaths outsource.
Would you like to meet my good friend David?
Specialty piping items fit for application such as large-bore, low-temperature, high-pressure, heavy-wall, corrosion-resistant piping, specialty valves and engineered products like Brodie meters, Excel loading arms and Liquiflo pumps are not what Goliath is built for. Conversely, David utilizes these niches to survive, thus he must perfect his approach. Rest assured, J2 Resources has ample commodity items, but our value-added approach is focused on reliable and predictable service as opposed to transactional cost.
A steady state of procurement is a staple of our business model. We maintain a great breadth of items for quick response, sameday shipment, exceptional documentation and experienced professionals. This is all built on a solid foundation of direct relationships with globally leading manufacturers, an inventory of major AML brands, and a rigorous and unique end-to-end quality program you wouldn’t believe a David could muster.
J2 may not be a replacement for your current supply solution, but we are certainly the best way to augment your supply chain in areas that will be underserved in the nearand medium-term.