Covid, Inflation, Costs, and Labor. How Building a Resilient Supply Chain Helped Rapid Aid Customers Meet Demand During Uncertain Times.
Over the last few years, supply chains worldwide have taken a beating, and most are feeling the impact of disruptions on global trade. A recent study by analyst firm Statistica showed that manufacturing took the brunt of these disruptions due to raw materials, labor, and cargo capacity shortages. In fact, the global economy saw a 3.4 percent drop in economic growth, resulting in over two trillion U.S. dollars of lost economic output.
The impact of the shortages has resulted in abrupt price increases for consumers and a loss of reputation for many companies.
Companies are bouncing back, but with inflation on the rise, the Rapid Aid team has been and continues to apply risk mitigation techniques that provide stability and consistency for our customers.
With production already in three countries, our team was able to use our existing relationships in those countries to help keep a close eye on production costs, tariffs, and other factors that may cause delivery delays and adjust as needed. This focus on customer delivery and quality resulted in the fact that during Covid, not a single customer delivery was missed.
Let’s look at a few methods we used to protect our customers’ brands.
Supply Chain Resilience from Supplier Diversity
You may not think about all the raw materials that go into a reusable hot and cold pack or instant heat pack. Everything from the plastic used in the bags to the many different ingredients to make our gel and the cardboard boxes used to ship products out of our facilities is sensitive to price and availability.
For example, the cardboard box industry saw more demand over the pandemic as consumers increasingly turned to e-commerce — where the cardboard box is king. Compounded by a reduction in wartime timber exports from Ukraine and Russia, we’ve seen a significant impact on the price and availability of paper and corrugate.
Equally challenging was the access to the raw materials, such as fertilizer, used in instant cold packs. The war, compounded by Covid lockdowns in China, created supply shortages that increased costs.
As prices increased or shortages were predicted, our manufacturing teams located diverse suppliers in other countries who could meet our needs. Combined with multi-country manufacturing facilities, we maintained production volume and quality without impacting the customer.
Over the years, we have created hundreds of unique product types as user demands change. Each solution may require new manufacturing techniques, materials, and suppliers. This diversification has created more resiliency.
Location. Location. Location.
Rapid Aid has wholly owned manufacturing facilities in Canada, China, and Vietnam. By placing our facilities in these areas of the world, we have access to raw materials, a robust and competitive labor market, and favorable tariffs.
Tariffs vary from country to country
A tariff is a tax imposed on imported or exported goods. The tariffs applied to imports from China were so significant that moving production to our facility in Vietnam provided substantial savings to our customers while retaining control over quality and delivery schedules.
The Overseas Labor Market
A stable labor market is essential to produce hot and cold packs at a consistent volume.
China and Vietnam have robust labor markets due to many factors, including a large population, relatively low wages, and government policies promoting economic growth and foreign investment. Additionally, both countries have experienced significant economic development in recent years, leading to increased demand for labor and a growing middle class. Additionally, Vietnam has a relatively young population, which also drives the robust labor market.
We focused on regional labor markets, such as Vietnam, during lockdown periods or when staffing may be of concern during low unemployment periods.
Evaluating Modes of Transport
At the beginning of the pandemic, some ports closed temporarily to limit the spread of the virus. This caused disruptions in international trade and led to delays in the movement of goods. Additionally, some countries imposed additional health protocols and quarantine measures for ships, crews, and cargo, which led to further delays.
Since many of our raw materials are procured in Asia and production occurs in those facilities, the Rapid Aid team worked with our international connections to move raw material shipments from China to Vietnam via truck. This avoided production shutdown in those facilities and the major ports altogether. For inbound shipments from Asia, we moved away from the port of Los Angeles to Vancouver, which experienced fewer issues than the LA port.
In addition, since Canada has the advantage of being in North America, where transportation is more cost-effective and cross-border policies are more favorable, we could avoid U.S. ports and the rising costs of ocean freight. We could also ship many of our products directly from the Canadian facility to the rest of North America without incurring delays.
With port delays, many of our customers requested we ramp up production to account for potentially longer delivery times. With manufacturing capabilities, we were able to meet capacity.
Our Brand is Your Brand
Rapid Aid is the sole owner of all North American and Asian production facilities. Ownership has two benefits: Ramping up manufacturing production as the need arises and providing quality control via a single source manufacturer. You get 100% of your supply directly from the source.
We are also experts in monitoring quality and process control, spending decades understanding (and exceeding) the global compliance requirements necessary to provide customers with the highest quality and safest products. These include our status as ISO 13485 certified, a Class 1 and 11 FDA registered medical device manufacturer with the FDA, Health Canada, the EU and Great Britain.
From senior management to production, the team at Rapid Aid takes pride in the products we manufacture. We market our product as a private label product and our Rapid Relief brand. Enough that both lines are treated with the same quality assuring your company’s reputation is safe using us as a quality manufacturer and reliable partner.
Supply chain disruptions can come in many forms, natural disasters, political instability, supplier bankruptcy, and more. That’s why powerful brands worldwide turn to us and offer them global access to manufacturers, labor, and supplies that keep production costs in check while also improving supply. With our team of specialists, we’ve become experts in supply chain resilience.
Thank you for your trust in us. If you have any questions or want to discuss your concerns, feel free to contact us.