Featuring Josh Bartel
Josh Bartel, Co-founder and CEO of Hydrian, discusses how to navigate the turbulent import tariff environment. He shares three key observations and strategies to help businesses adapt.
First, Josh notes significant price relief from suppliers due to tariffs. He advises importers to contact suppliers for potential discounts and domestic businesses to leverage existing inventory bought pre-tariff. Competition for these deals is high, so act quickly.
Second, Josh observes a shift towards domestic sourcing, though he cautions that increased demand affects pricing and lead times. A hybrid approach, maintaining some import sourcing, is recommended.
Finally, Josh addresses preparing for a potential economic downturn. He emphasizes responsive forecasting and inventory control, especially for long lead-time items. Prioritize inventory dollars over service levels for lower-volume products and actively manage open purchase orders to adapt to changing demand.
Many suppliers offer tariff-related price breaks. Importers should proactively seek discounts from their suppliers to mitigate cost increases. Domestic businesses can take advantage of pre-tariff inventory held by domestic suppliers, offering temporary cost savings. However, high competition for these deals requires swift action to secure favorable terms.
The current environment sees businesses shifting from import to domestic products due to tariff-related price hikes. While domestic sourcing can be advantageous, consider increased demand, resulting in rising prices and longer lead times. A balanced, hybrid approach that retains some import sourcing is recommended to manage risk and maintain flexibility. Evaluate both domestic and import options carefully to find the most cost-effective and timely supply solutions.
Recessionary concerns underscore the need for proactive inventory management. Regularly updated forecasts, responsive inventory controls, and dynamic forecasting models are critical. As demand fluctuates, inventory levels should adjust accordingly. Evaluate long lead-time items, balancing service level against inventory costs, and consider reducing inventory levels for low-volume items to free up resources. Actively managing open purchase orders provides another lever for quickly adjusting to shifts in demand.
Purchase orders for long lead-time items represent significant commitments in uncertain times. Establish a clear workflow for modifying open purchase orders with suppliers. This includes knowing whom to contact and acceptable timelines for adjustments. Having these processes in place enables quick responses to changing demand, reducing risk and potentially avoiding excess inventory. Good reporting systems can highlight areas where PO adjustments may be necessary, providing an opportunity for proactive inventory management.
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