Report: U.S. increasingly viewed as supply partner to overseas distributors, manufacturers
In recent years, manufacturers and distributors have typically turned to China to source a vast majority of their materials and products. However, a recent study shows that many more of these businesses are looking for sourcing opportunities outside of that country – with many eyeing the United States.
Panjiva, a search engine that allows product buyers to locate ideal suppliers around the world, released a report titled "The State of Global Trade in 2012" earlier this year. In the report, the company noted that while most buyers still rely on Chinese suppliers for materials – 73 percent said they source from this country – 68 percent say sourcing from countries other than China is "much more important" or "more important" than it was a year ago.
Many businesses think finding suppliers elsewhere can contribute significantly to their own attempts to curb spending, according to the report. Fifty-three percent said they intend to look to other Asian countries for new opportunities, while 24 percent view the U.S. as a potentially favorable destination.
Among international suppliers, the U.S. was the most attractive trade partner for new business – earning favor among 68 percent of suppliers. Fifty-six percent pointed to Europe while 41 percent highlighted China.
In an interview with Industrial Distribution, Panjiva CEO Josh Green said optimism among distributors increased overall, although smaller businesses were more likely to experience improved sentiment than larger ones. Green surmised that this may be because smaller distributors "battened down the hatches" and made their operations more efficient to save costs during the recession. Those that were successful now run relatively lean operations and have rosier outlooks to show for it, Green suggested.
For businesses that wish to further improve their distribution efficiency and bottom line, an investment in inventory management software may help distributors increase inventory turns and lower costs as a result.