The current conditions of global trade represent a divergence from thirty years of manufacturing trends. The globalization of manufacturing, combined with bilateral and multilateral trade agreements, has transformed what were once linear supply chains into complex trans-national networks. With continually shifting trade regulations related to ongoing US-China tensions and COVID-19, industrial manufacturers need to be aware of the implications of various trade scenarios.
With our nearly fifty-year track record of helping businesses design, develop, engineer, manufacture, and distribute successful products, Pivot International delivers proven supply chain and compliance solutions to challenges posed by changing trade policies and COVID-19 disruption.
Pivot provides 200,000 square feet of manufacturing capability across three continents and product development expertise that spans twelve industries. By deploying the latest in digital technologies and agile manufacturing practices, Pivot enables its partners to rapidly respond to dynamic trade conditions and market demands to maximize cost savings and capitalize on emerging opportunities.
What trade scenarios are most likely to take shape?
There are three possible trade scenarios that will impact global manufacturing, two of which involve heightened trade tensions.
By analyzing global trade regions in China, North America, Europe, and ASEAN countries in relation to the US, we can assess tariff-impacts on industrial manufactured goods to reveal the following:
Possibility 1: 2019 tariff-levels persist
Possibility 2: 10% additional tariff levied on 2019 tariff-levels
Possibility 3: 25% additional tariff levied on 2019 tariff-levels
5 Steps for Helping Industrial Manufacturers Move Forward
- 1. Be vigilant about tracking trade changes. Manufacturers impacted by global trade policies need to ensure they’re staying on top of changing import and export regulations. This will help them defend against non-compliance, proactively reconfigure their sourcing network, and identify new market opportunities.
- 2. Identify and overcome barriers to supply chain mapping. This activity is essential for increasing supply chain security. Although it can be time-intensive and difficult, the benefits far outweigh the costs. Ensure disruption metrics are included in supplier-performance metrics. Failing to do so exposes your business to otherwise avoidable hazards.
- 3. Identify opportunities for alternative sourcing. The possibility of tariff-escalation makes a diverse supply network more critical than ever. As COVID-19 made abundantly clear, having your eggs in multiple baskets is a competitive advantage in the best of times, but is also vital to survival in the worst. With China continuing to be ground zero for trade tensions, it’s particularly important to identify alternative sourcing solutions.
- 4. Deploy advanced digital technologies. This includes AI, blockchain platforms, augmented and virtual reality, 3D printing, digital twinning, and more. When strategically combined, these technologies drive productivity, increase cost-savings, and reduce risk.
- 5. Close knowledge and skills gaps. Coupled with COVID-19, trade tensions, and the new policy changes they are giving rise to are confronting companies with knowledge and skills gaps that they lack the talent to close. (For example, while many companies have in-house prototype and concept engineering, they lack the DFM engineering that is critical to cost-savings.) These companies will require partners with integrative operations that can deliver end-to-end product development, manufacturing, and supply chain solutions.
If you’re looking for a proven partner with advanced supply chain solutions and the latest digital technologies to help your company defy disruption and bring innovative products to market, Pivot can help. Pivot brings IEC (60601-1) and ISO certification (9001:2015, 13485:2016, and ISO 80079-34), FDA registration, UL listing, and CSA approval. Contact us today for a free consultation and learn more about how we can help your company grow in challenging times.