We have all seen the headlines of late concerning supply chain disruptions around the world. Some of the representative examples include:
- Overseas factories and ports suspending operations to battle latest covid outbreaks.
- Suez Canal incident backs up shipping channels, delivery delays expected.
- Heavy rains, monsoon conditions, and flooding disasters in key overseas locations likely to impact production, storage, and shipping of goods to U.S. markets.
- U.S. imports continue to surge, and ports are jammed to capacity.
- Retailers begin to brace for the back-to-school and holiday shopping seasons but may not have the inventory to meet demands.
Shipping goods to U.S. markets from overseas is already a complex process without disruptions and many are predicting issues to continue into 2022.
While in most cases supply chain managers successfully import their goods from overseas without incident and in excellent condition, product integrity problems can and do show up from time-to-time on inbound shipments. However, today the conditions are ripe for increased incidences of product integrity issues on goods arriving at U.S. ports.
Overseas factories are under increased pressure to make and deliver goods to meet current market demands. As operations are suddenly stopping and starting due to the latest outbreak or natural disaster, production may be rushed leading to mistakes and product quality issues.
Shipping congestion and supply-demand imbalance issues are creating significant challenges as well. Port congestion and incidents such as the Suez Canal disruption have backed up global shipping channels leaving goods at sea for weeks beyond normal shipping timelines. When goods are idled in containers for extended periods of time, packaging and contents can easily experience moisture damage.
As economic conditions have improved and supply chain challenges are impacting the timely flow of goods to distribution centers and stores, companies have heightened pressures to meet their merchandise availability needs. With the prospect of increased incidences of product integrity issues potentially impacting merchandise availability, supply chain managers and staff are likely considering increased inspections on inbound shipments and looking at product rework in a new light.
SOS (Save Our Shipment)
As supply chain managers and staff continue to navigate unexpected jolts to the supply chain system and ongoing logistics challenges, inbound inspections and product rework may increasingly be positioned by leaders as tools where potential problems can meet opportunities.
Many companies have implemented quality control systems with overseas factories to minimize issues before products ship. However, inbound sampling inspections are also used regularly and serve as the last line of defense for many brands. They are a critically important screening tool for companies to identify and minimize the prospect of less than first-quality goods making their way on to stores, e-commerce channels, and ultimately consumers.
Inbound inventory is expected to face increased scrutiny for enhanced inspections based on recent events and indicators which suggest the potential for increases in product integrity issues. As those “uh oh” moments surprisingly surface on inspections of inbound shipments, companies often need to quickly make product disposition decisions. In many cases, product rework is an increasingly viable option to save a shipment and turn problems into opportunities.
Product rework can provide multiple benefits in addressing imported goods that have real or perceived product integrity issues. Opportunities and benefits include:
- Potential to help brands preserve their reputation for quality products.
- Opportunity to turn problematic goods into profitable merchandise.
- Eliminate the delays and opportunity costs incurred through returning goods back to overseas manufacturers.
- Meet inventory availability needs and minimize stock-outs.
- Product rework can be a sustainable solution, playing a role in extending product life circularity (More recovery = Less landfill).
When product rework needs arise, projects will vary widely in scope depending upon the problem encountered on a particular shipment. Projects typically involve some type of repair, correction, or alteration that will require different levels of expertise. For example, a mold cleaning project or sewing correction project demands more resources and specialty equipment in comparison to a simple relabeling project.
The complexity of a project and volume of goods involved often determines whether rework can be performed in-house or, outsourced to a service provider with the expertise to undertake a project. Outsourced service providers, working exclusively on product rework projects, typically have the expertise and sizable production operations to perform high-volume projects quickly.
Today, with inventory availability at a premium, many supply chain managers are increasingly relying on outsourced service providers as their behind-the-scenes product rework partners. Quality correction projects can be challenging undertakings to perform internally. Many distribution centers are ill-equipped and do not have dedicated space to undertake sizable rework projects which can be a major distraction as they try to focus on their day-to-day operations. Outsourced product rework specialists are well positioned to help ease the pain of supply chain disruptions and can be valued resource partners. Working with external specialists in product rework allows supply chain managers to be proactive and provides the flexibility to pivot quickly in order to meet the needs of their operations and supply much needed inventories for important shopping seasons.