Handling your supply chain and ocean plastic in the midst of COVID-19
Disruption is afoot and global supply chain practices are poised for tremendous change. COVID-19 has exposed the delicate and fragile nature of how the world conducts commerce. Understanding the positive and negative impacts of this turmoil on the recycled ocean plastic markets is critical for companies exploring or already relying on this unique source material.
Oceanworks developed this guide to help you and your organization navigate these troubled waters. We hope to provide clarity and confidence in your ability to reassess—and possibly reinvent—how you procure recycled ocean plastics.
Time to get regional
Before this crisis, manufacturers of all ilks relied upon a complex and convoluted network of suppliers and transportation providers to gather raw materials, manufacture parts, and assemble products for minimal cost and maximum profitability.
Seemingly simple products required intercontinental coordination and multiple facilities before finally reaching their customers. Despite the environmental impact of these lengthy supply chains, the financial savings were too irresistible for many companies, and buyers seldom complained about cheaper prices.
But we now know that relying on a tangled web of suppliers and logistics makes companies vulnerable to massive disruption if the system breaks down. Saving a few cents per unit doesn’t increase profits when you can’t finish the product and get it into customers’ hands.
The solution is a tighter, shorter supply chain, sparked by getting hyper-local. Every additional mile and border crossing puts manufacturing output at risk… so why risk it?
The impact of these reconsidered sourcing strategies implemented in 2020 will resound for years to come. Winners will buy local while the losers increase their risk by chasing slightly higher profit margins.
Leveraging the Oceanworks supplier network, you can source material as close as possible to your manufacturing hub. We’ve long touted this as a key benefit to our marketplace, and it’s now even more pertinent. Which countries and regions you source from matters, and you can trust that Oceanworks has a reliable network wherever you are.
And don’t forget, buying local also reduces your product’s carbon footprint and transportation costs.
Focus on capacity
If your organization is fortunate enough to have maintained order volume and growth targets during this crisis, now is the perfect time to lock in purchase orders for raw materials on a rolling basis.
Meanwhile, if your existing suppliers have already been derailed by COVID-19, you’ll want to source sufficient future material as fast as possible.
Oceanworks’ dedicated supply chain and accounts team is here to help your organization hedge for the future based on your forecasted demand. We have worked with current members to lock in material supplies and pricing to rapidly position themselves for the rocky seas that lie ahead.
The importance of dual (and maybe triple) sourcing
Relying on a sole supplier for anything is always risky, but many manufacturers took on those risks in the past. They secured volume discounts and leveraged their longtime supplier relationships for better deals. Plus they valued the reliability and consistency that comes from single sourcing.
But COVID-19 has illustrated why you don’t want to keep your eggs all in one basket. The rules of engagement are changing, which might be uncomfortable and challenging for manufacturers without the inclination to shop around or appetite for maintaining additional relationships.
At this point, however, it’s irresponsible not to pursue a multiple source strategy. Once reliable partners can be shut down at a moment’s notice, transportation networks can be cut off overnight, and there’s little we can predict about what the weeks and months ahead may hold.
Local and national governments are managing COVID-19 flare-ups and attempting to minimize community spread, and those decrees can instantly scuttle your supply chain. To minimize these disruptions, it’s prudent to add one or two additional suppliers to your pipeline. If one goes dark, your organization won’t grind to a halt as you’ll still get what’s needed from other sources.
By design, the Oceanworks supplier network creates sourcing diversity within a single entity. We can expedite your sourcing needs while creating continuity across your supply chain by ensuring each supplier is providing the same high-quality materials your products and processes rely upon.
Traceability is here to stay
Responsible sourcing has a new wrinkle. With heightened scrutiny on hygiene and materials potentially exposed to the virus, it’s more important than ever to know your materials’ backstories. Where your recycled plastic material shipments are located, how they’re being handled, and when it will arrive is mission-critical information these days.
Combined with growing consumer interest in transparency and attribution, now is the time to double down on your traceability strategy. Oceanworks members are in luck, as the platform has included track and trace capabilities since its inception.
A trusted partner in uncertain times
The repercussions COVID-19 has had on every industry are still being unpacked, with the fallout growing each week that stores remain shuttered, citizens keep to their homes, and borders stay closed. Predicting future demand, maintaining continuity, and keeping the lights on and the paychecks coming is a daunting prospect for so many industries.
Relying on Oceanworks to assist with preserving and strengthening your supply chain can be a key ingredient in your plans to survive and thrive in the months to come. These actions will not only help organizations stay up and running, but they can better position your business for a future less reliant on distant suppliers and strengthened via redundancy and a more efficient supply chain.
Learn more about the Oceanworks Marketplace and see how we can help your business with the resiliency and readiness required today and tomorrow.