By now it would seem that supply chain disruptions — whether domestic or overseas — are old news. Certainly, these disruptions have been in the headlines for months.
The problem is that they really aren’t old news. For many, the disruptions are expected to continue at least through the first half of this year. Whether it’s the factory waiting on materials or long lines of customers waiting for their order’s turn in the production line, the bottleneck remains just as retail demand is stronger than ever.
These supply chain challenges are manifesting themselves in different ways, namely a shift in sourcing. Perhaps the most dramatic example of that came this past week when high-end resource Marge Carson announced that, due to disruptions that are causing extended wait times for customers, it is abandoning its entire line case goods from Asia. Thus, it will discontinue more than 20 inline case goods collections now sourced in Indonesia and the Philippines.
Now its focus will be on Mexican sourced upholstery and its popular Palo Alto bedroom, also produced in Mexico. Future bedroom dining and occasional also will be sourced in Mexico, but the time frame is unclear at the moment.
Still, while a difficult decision, this bold move is aimed at better serving customers over the short and long term. Others, too, are facing similar decisions and making decisions based on how to better flow goods to customers. This is particularly true as the U.S. government determines whether to impose tariffs on Vietnam a d,ecision that may or may not happen until the new administration comes into power on Jan. 20.
But the industry appears to be making pre-emptive moves, and that’s a good thing, regardless if these tariffs ever take effect.
Mexico, while facing challenges of its own including rising transportation costs, remains a viable solution due largely to its proximity to the market.
Recently, a pretty well-known resource in the industry asked Furniture Today for some ideas on sourcing, particularly for RTA furniture. Others also have asked me about Mexico, Europe and other areas that we perceive as emerging sourcing destinations given concerns regarding supply chain.
The answer to those questions largely lies in specific types of product we are talking about.
For example, for companies seeking more upscale designs in laminate furniture– Malaysia appears to be coming on strong thanks to investments in new technology. But so are places such as Italy, Poland and Turkey. Not to mention the United States.
For other mixed media, particularly metal and bronze accents, India remains a vital resource, as does Mexico, across a wide range of price points.
We could go on about various countries and their strengths. But the bottom line ultimately could be not only proximity to the market, but also access to containers and reliable and cost efficient transportation. Obviously, there are no easy answers, as one benefit could diminish in value related to one or more negatives.
This will be an issue Furniture Today continues to follow in the weeks and months ahead. As always, we want to hear from you on this and other key issues facing the industry. What are your sourcing plans — international or domestic — in the year ahead and beyond? Feel free to reach me at firstname.lastname@example.org or (336) 508-4616.
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