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How Manufacturers Save Money Through Mexico’s IMMEX Program

IMMEX

How Manufacturers Save Money Through Mexico’s IMMEX Program

The IMMEX maquiladora program combined with the available VAT certification offers one of the top cost-savings benefits for companies that implement nearshore manufacturing in Mexico. It offers a 16 percent VAT tax exemption for all temporary imported materials, equipment, and tools. Manufacturers that have previously expanded operations internationally may compare this benefit to what’s normally referred to as a “free trade zone.” Although tax-wise the IMMEX program is similar, the extra advantage is that it’s not centric to any one geographical location.

When added to access to a competitive, cost-effective workforce, close proximity to the U.S., and favorable trade relations through the USMCA, an operational transition from China to Mexico is a viable option for a growing number of manufacturers. Numerous global brands across multiple sectors have already experienced success over the years through Mexico manufacturing, and the benefits continue to entice new companies to explore their options closer to home.

Working with Mexico Shelter Companies to Ensure VAT Tax Exemption

To receive tax benefits through the IMMEX maquiladora program, manufacturers can either apply and become IMMEX program approved and then get their VAT certification on their own or operate under a shelter umbrella that already has both permits in place.

The timeline of being accepted into the IMMEX maquiladora program often takes several months due to the complexity of what’s necessary to meet the criteria. Plus, if there are any discrepancies in the application and a company is denied, they must start the process again. This impacts Mexico manufacturing costs since companies can’t import any components, materials, or equipment without having their IMMEX program.

Once they have it or work with a shelter to use the shelter’s program, manufacturers are able to initiate their equipment and materials imports and start the setup process on their current Mexico facility. As you can imagine, not doing this right and as fast as possible will present delays on your project. Mexico shelter companies allow manufacturers to receive VAT tax benefits automatically when working under the shelter’s IMMEX licenses since a VAT certification is already in place.

This is in addition to other advantages, such as lower customs broker fees and the use of special compliance software that tracks the timeframe of all temporary imported materials that exempt VAT payment at customs. Companies that wish to apply for the program on their own must hire a U.S. and a Mexico customs broker, since these are the representatives that process and transmit to customs all the documentation required to move materials and finish goods
through the US / Mexico border. Also if you select this operating option, you must absorb all compliance software fees.

Additionally, once approved, a manufacturer can lose VAT certification at any time if criteria is not met at the time of renewal or during an inspection from the Ministry of the Economy. Manufacturers who partner with a shelter company often benefit from decades of expertise, experience minimizing red lights at customs, and a history of optimizing operations.

Explore Cost-Saving Solutions When Manufacturing in Mexico

The fiscal benefit of Mexico’s IMMEX maquiladora program is significant but comes with strict guidelines and great responsibility. Although starting from scratch is an option when nearshore manufacturing in Mexico, it increases costs and extends operational set up times that can lead to bigger challenges down the road.

In addition to working under a shelter’s IMMEX license, a shelter provider can create a customized cost analysis that explores additional ways to save money and get operations up and running efficiently and on schedule.

Overall, the IMMEX maquiladora program provides a good avenue for manufacturers looking to get operations up and running quickly and smoothly.

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Sergio Tagliapietra has spent his entire career pioneering administrative service solutions in Mexico. He works with government in all parts of Mexico and he is one of the country’s most respected business leaders in the field. He is president and founder of IVEMSA, a full shelter services provider and partner to manufacturing companies expanding to Mexico.

manufacturing

How to Gain an Advantage in Manufacturing Facilities During Post-Crisis Times

In the United States today, as many manufacturers have entered post-crisis phases in their facilities, some have a much different business model than they did entering 2020. Others, such as those who manufacture medical supplies, craft supplies, and pet supplies, don’t look much different than they did at the beginning of the year, outside of a backlog of orders that they are doing their best to fill in a timely fashion. 

Some manufacturers were surprised at how well their products did during crisis times earlier in the year. For example, LumenAID, a manufacturer of portable, solar-powered lanterns that double as a phone charger, has seen a huge uptick in sales. It seems with people preparing for times unknown, emergency supply manufacturers of this type can’t fill the shelves quickly enough. Other manufacturers were well aware of the need for their products, like office chairs, school supplies, and pet training products. The comforts of home for those stuck at home became the quick front-runners in sales, and suppliers with stored inventories were pleasantly surprised with their sales numbers. 

Yet, for some manufacturing facilities, especially in the hardest-hit areas of the country, it wasn’t a lack of demand that shut down the product lines. It was the lack of production associates able to make it to the facility. Quarantine, public transportation being shut down, mandatory stay at home orders, and a lack of child care left some facilities looking much like a part of a ghost town. The most prepared of those production facilities put that time in the hands of their plant engineers and maintenance managers, and for good reason. 

In an industry where it is often common for machines to run in 72-hour cycles or longer to meet production needs, the downtime came as a blessing in disguise to many engineers and mechanics. They strapped on their tool belts and began performing preventative maintenance that had been put off, in some cases, until the machinery refused to operate any longer. While many production associates were home by no choice of their own, skeleton crews of mechanics and engineers quietly worked behind the scenes to ensure that the production lines that these associates returned to were repaired, lubed, and ready to run for another 100,000 rotations. 

While You Were Out…

Although we’re not positive what the “new” normal will look like, manufacturers are doing their best to get back to business as usual.  One key element is ensuring that their facility can handle the workload, and well-maintained production lines are a fundamental part of that process. Even those production facilities that did not have to implement the Emergency Contingency Plan and were still able to run socially distanced production shifts were finding difficulty in getting the parts necessary to perform preventative maintenance on their production machinery. 

Facilities with CMMS systems that handled their maintenance parts rooms were seeing just how much those systems did for them, possibly for the first time ever. These manufacturing facilities were able to perform preventative maintenance as normal, because of the reorder point set in the CMMS, ensuring that the parts to perform the maintenance were, indeed, stocked in the parts room. Due to the human element being removed by CMMS, the moment the last technician performed the PM and took the part off of the shelf, the system already issued a purchase order and had a replacement on the way. 

Full Speed Ahead

As manufacturers are getting back into the swing of things, especially those fortunate enough to have orders that they need to fill, the appreciation for well-maintained machines is at an all-time high. With most of the country able to return to work, and production lines full of associates thankful to be back on the line, returning to a facility with newly maintained machinery is just another day in manufacturing. However, from the mechanics and engineers who worked solo overnight shifts to prepare for firing the production lines back up, there is a nearly audible sigh of relief when the conveyor belts start running. 

Preventative maintenance was, in some facilities, the only items that could be completed during the height of the crisis, and production managers are reaping the benefits of those overhauls at the moment. In notoriously under-maintained facilities, the quietly operating, well-oiled machinery that is producing post-pandemic inventory is a sign of moving into stronger financial times. 

As A Post-Crisis Model

If your production facility is running at a pre-pandemic rate, you’ve more than likely gotten back into the normal preventative maintenance schedule, less a few adjustments. For those facilities that don’t have the need to run full production shifts at this point, investing labor dollars into machine maintenance is a smart move. Although the need may not be there at the moment, when the orders do come in, the ability to perform full production runs without stopping because of unperformed routine maintenance will be one more way to stay competitive. 

Well maintained machinery produces to specification, which reduces scrap and reworks exponentially. By producing a consistent and reliable product, your facility develops a reputation for quality, and that is priceless in post-crisis America. By ensuring that your production facility is adhering to a preventative maintenance schedule, you’re committing to running products that are manufactured to strict standards at a time when they’re more valued than ever. A CMMS is another tool in a manufacturer’s facility to ensure that they’re producing items that meet or exceed the expectations of their customers. 

In addition, maintenance costs are decreased by 5-10 percent by having a preventative maintenance program in place in a manufacturing facility. It also decreases the time spent repairing machinery by 20-50 percent. In terms of looking out for the bottom line as manufacturing facilities try to push forward in uncertain economic times, a strong preventative maintenance program makes sense. In saving both time and money long term for manufacturing facilities, preventative maintenance can help manufacturers get a leg up in the post-crisis American economy. 

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Co-Founder and CEO of REDLIST. Raised in a construction environment, Talmage has been involved in heavy equipment since he was a toddler. He has degrees and extensive experience in civil, mechanical and industrial engineering. Talmage worked for several years as a field engineer with ExxonMobil servicing many of the largest industrial production facilities in the Country.

risk

New Manufacturing Priorities: Increasing Agility and Understanding Systemic Risk

COVID-19 dealt an unprecedented blow to the global supply chain. Almost overnight, demand skyrocketed in some sectors and plummeted in others, forcing manufacturers and their suppliers to adapt on the fly.

As many as 94% of the companies in the Fortune 1000 have experienced supply chain disruptions since the start of the pandemic, including global manufacturing titans like Apple. The fact that the world’s largest companies haven’t been immune suggests that abundant resources and relationships aren’t enough to help supply chain partners survive in times like these.

It also suggests that the traditional playbook for dealing with supply chain problems is no longer quite as effective as it used to be. The old methods of responding to crisis demand and supply are no longer enough to withstand these events — this pandemic, as one example, has led to shortages of everything from toilet paper to car parts.

Shifting Focus From Efficiency to Manufacturing Agility

If manufacturers want to withstand the next crisis, they’ll need a new approach. COVID-19 has highlighted the need to move from focusing on efficiency to adapting for flexibility, resilience, and agility.

Arguably, the focus on efficiency — on doing the most with the least — even exacerbated recent supply chain disruptions by leaving producers and suppliers under-resourced and locked into one way of doing things.

Even as the pandemic rages on, the takeaway is clear: Manufacturing agility is more important than operational efficiency. Efficiency strives to make incremental improvements, but reality calls for manufacturers to make sudden, sweeping changes in the face of unprecedented challenges.

Understanding Systemic Risk

The challenges the pandemic brings to the supply chain represent nonsystemic risks — or risks that are out of manufacturers’ control. Problems that manufacturers can control with the right tools and processes, on the other hand, are systemic risks — specifically, problems that start on the ground floor when machines break, then disrupt production lines, then cause issues all the way downstream in the supply chain. It’s like one domino toppling down the rest.

Nonsystemic risk puts additional pressure on manufacturers to ensure that their facilities are as systemically risk-free as possible to remain flexible around dramatic swings, either up or down, in demand.

Now that COVID-19 has proven anything is possible when it comes to nonsystemic risk, manufacturers must turn their focus toward creating agile operations to contain supply chain issues in whatever form they arrive. For example, when a nonsystemic risk like the pandemic forces a manufacturer to shut down 80% of its production lines in a low-demand environment, the lines that are still operating will need to function at maximum productivity.

If the remaining lines aren’t up to par, the company will become vulnerable to slowdowns that could turn away what few buyers still exist, or the company may, once again, have to go through the time-consuming and costly process of shifting production to different facilities.

Nonsystemic risk highlights the need for organizations to uncover and manage systemic risks, taking control over whatever factors they can to keep bad situations from getting much worse.

Finding Opportunities in Manufacturing Agility

Managing systemic risks starts by understanding on-the-ground conditions, particularly when it comes to machines. When the unexpected happens, machinery bears the brunt of the consequences. As it ramps up or down in response to sudden changes in production, it must continue to operate efficiently, productively, and without downtime.

When manufacturers can gather insights on machines at the ground level, regional leaders can view those insights collectively to uncover companywide opportunities to manage systemic risk at large.

By de-risking operations in this way, these companies stand to gain substantial predictability and flexibility around their machines, which opens up opportunities for greater productivity and more effective, efficient asset planning at the corporate level. Focusing on the following three areas can help you uncover systemic risk and opportunities for more agile production lines:

1. Create redundancy in your production lines.

As a first step, you should have multiple lines running at the same time. This way, if one does fail, you’ll have a backup plan. That strategy itself should be viewed as the first step in a much larger strategy — as it really just serves as a crutch approach to mitigating systemic risk. Running many lines that are susceptible to machine failure and downtime can actually become a significant financial risk in manufacturing.

The eventual goal should be to have every line be your best line — which means no machine downtime. To create that kind of system, you need to understand the details about why your best line operates at maximum productivity and why your other lines pale in comparison. The real value of creating redundancy in your production lines will come from the insights you gather on your machines to optimize every machine companywide, making each production line your strongest one.

2. Leverage machine health data.

So how do you gain insights on individual machines in your production lines and view that machine health data collectively to reduce risk along every production line? It’s easier than you might think. In fact, sensors and IIoT networks combined with AI algorithms can do most of the work for you, showing you where risk and opportunity exist in manufacturing operations across entire asset classes.

When these tools give you insights into the health of all the components of your supply chain, you can both replicate what’s working best and predict what might fail in the future, removing the weakest parts and replacing them with stronger ones. Machine health data can help you find your best configurations so that you can replicate these practices across all your facilities.

3. Facilitate remote collaboration.

The factory floor as we’ve long known it is changing. That was true even before the pandemic, but COVID-19 sped up the transformation. Social distancing practices have meant that up to half of manufacturing employees have been unable to work on-site. Digital collaboration and remote work are the new normal everywhere, and the manufacturing industry is no different.

The good news is that by utilizing digital collaboration platforms, you can bring a lot more opportunity for flexibility and agility into your company. When your teams can collaborate from anywhere, you can draw on the institutional knowledge of your entire organization. Cloud-based software that identifies machine health problems and allows for remote collaboration to address them lets your teams work better together, even from farther away.

The pandemic forced everyone to adapt fast, but it should also force everyone to question their assumptions about what manufacturing looks like in 2020 and beyond. Surviving isn’t about becoming as lean as possible — it’s about being agile enough to stay in front of the waves of change, even the ones you’ll never see coming.

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Artem Kroupenev is VP Strategy at Augury, where he oversees Augury’s AI-based machine health, performance, and digital transformation solutions. He has over a decade of experience in building products and ecosystems and bringing technological innovation to market in the U.S., Israel, and Africa.

customer

Customer Preferences Are Constantly Changing — You Can Either Listen or Get Left Behind

Today’s consumers demand more from brands on every level. Millennials and Generation Zers have entered the driver’s seat with a combined $3 trillion in purchasing power, according to YPulse, and they have made their expectations clear.

Offering products at competitive prices is no longer enough — you must also provide a top-tier customer experience. That means creating open lines of communication with consumers, listening to their feedback, and offering products that anticipate their needs.

Customer experience becomes especially crucial during times of crisis, such as the ongoing coronavirus pandemic. This experience is reflected in the values that consumers want companies to hold, such as a move toward more natural, sustainable materials and processes. Companies that empathize with consumers and show compassion by reflecting these values in their manufacturing and logistics can stand out from the pack.

General Motors Co., for example, created and filled a new C-suite position for sustainability earlier this year to show its values to manufacturing partners and customers. When the coronavirus began to spread throughout the country, the company started creating ventilators to help people suffering from the worst cases of COVID-19. This appeals to consumers, as 53% believe brands should get involved in social issues that don’t impact their businesses.

There are countless ways to interact with your audience and gather insights into their preferences, ranging from social media posts to online reviews and email surveys. However, a shockingly low number of companies engage in these beneficial activities. According to a 2019 HubSpot study, 42% of companies say they do not collect feedback from their customers.

Creating products and services without listening to customers is a risky move. A great example of a company making this mistake came in 1985, when Coca-Cola changed its formula for the first time in 99 years. The company had gradually lost market share to Pepsi, so its leaders tried to make a splash with New Coke, which tasted more like Pepsi. Coke’s loyal consumers were blindsided by the change, however. They loved the taste of classic Coca-Cola and refused to embrace the new offering. Sales plummeted, and Coca-Cola reverted to its tried-and-true formula a few months later.

Microsoft made a similar blunder in 2012 with the release of Windows 8. Fresh from the failure of Windows Vista, the company decided to change the look and feel of its operating system completely to resemble Apple’s user interface. The decision backfired. Windows 8 released to poor reviews, and fewer consumers adopted it than Windows Vista. Since then, Microsoft has returned to its traditional look. 

Companies like Coca-Cola and Microsoft can afford to make big mistakes. But for most small and midsize organizations, these missteps can have detrimental consequences.

Follow these tips to ensure your operation remains on par with customer preferences:

1. Leverage CRM technology.

Manually tracking customer feedback is a fool’s errand. There are simply too many simultaneous conversations occurring across a multitude of venues. Instead, companies should use customer relationship management (CRM) software to track their interactions with current and potential consumers and to aggregate customer insights into a centralized location.

I took this exact approach while at my previous company, Schmidt’s Naturals. I was able to read customer reviews and communicate with users more efficiently. This helped us discover that customers wanted a new form of our product, which we delivered.

Most CRM platforms offer mobile access, which has been shown to improve productivity and make it easier to maintain open communication with customers. In light of the ongoing pandemic, some CRM vendors have stepped up to help struggling businesses. For example, Salesforce has gone above and beyond by offering free solutions to help companies communicate with customers during these uncertain times.

2. Reply early and often.

According to HubSpot research, a majority of consumers expect companies to reply to their messages in 10 minutes or less. To meet this expectation, devote team members to monitor your CRM system and social media accounts for questions and comments — and respond to them quickly.

You’ll also want to pay attention to comments on your social media ads, which are easy to overlook. Even if a question seems like a no-brainer, answer it. Chances are, several other customers are wondering the same thing.

Artificial intelligence and chatbots can be useful in this area. Many companies use these technologies on their websites and social media pages to help them interact with consumers, answer simple questions, provide product recommendations, and even facilitate transactions.

Yelp has done this well during the pandemic by offering updated services that allow restaurants and businesses to communicate more easily with their customers. For example, Yelp has added banner alerts to each restaurant’s page to display relevant information in a prominent spot.

3. Make authentic connections.

According to Quick Sprout, consumers are less likely to shop around and more likely to recommend you to friends if they feel an authentic connection to your brand. Chatbots might be able to handle the bulk of your customer interactions, but that doesn’t mean you should become overly reliant on the technology. Research from Sitel Group suggests that 70% of consumers would rather interact with a real person than a chatbot, so you’ll want to balance your use of AI with an authentic human touch.

Zappos is a shining example of a company that interacts authentically with consumers online. The shoe retailer’s social media team routinely — and cheerfully — replies to the majority of comments it receives, with team members signing each message with their initials. Even as Zappos transitions employees to work from home, it’s still focused on “WOWing” customers, vendors, and employees. During trying times, brands must adhere to the core values that have always driven them.

Customer preferences are always changing, and they fully expect the companies they support to keep up with them. This has never been truer than during a global crisis like the coronavirus pandemic. To innovate and stay relevant, you must continually check in with customers, monitor their online conversations, and offer a tailored experience that shows you’re listening.

Modern consumers don’t just buy products — they invest in brands. They care about purpose, transparency, and authenticity. If your company does not deliver those three essential elements, it will not survive.

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Michael Cammarata is the president and CEO of Neptune Wellness Solutions, an innovative wellness company based in Quebec offering high-quality, environmentally friendly, natural alternative products. He also co-founded Schmidt’s Naturals, a fast-growing wellness brand that was acquired by Unilever in 2017.

hemp

Plant-Based vs. Synthetic Ingredients in Consumer Products: Why You Should Add Hemp to Your Ingredient List

For the past 50 years or so, industries across the globe have rushed to synthesize everything as a matter of convenience. Synthetics allow manufactures to mass-produce products to meet rising consumer demand, which exploded after World War II. But as the 20th century ended, consumers began to question the wisdom of that choice and grew concerned about the potential health and environmental impacts of synthetics.

Today, consumer trends show a desire to return to natural products, to connect with the planet, and to buy and use items that contain ingredients people can understand. Manufacturers around the globe have started to take notice, and they have rushed to ditch synthetics and catch up with the plant-based revolution.

Are Cannabinoids the Missing Secret Ingredient?

The problems for companies trying to meet consumers’ demands for natural products are often complex. For example, it’s a challenge to find effective plant-based alternatives to many of the synthetic ingredients in products. However, one potentially overlooked natural ingredient is on the rise — hemp.

For the past 50 years, the growth and use of the cannabis plant in all its forms has been illegal in the United States and many other countries. The legality of the plant is the key reason it has never been integrated into many consumer products.

In the time since the Hemp Farming Act of 2018 passed and legalized the cultivation, study, and use of hemp in the U.S., we’ve learned a lot about the potential applications of the different cannabinoids (i.e., compounds) present in the hemp plant. Because hemp has so many compounds, it has diverse potential applications. For example, some of the phytochemicals naturally present in hemp (e.g., terpenes and phytocannabinoids) can effectively replace some of the synthetic ingredients in household products.

Now that many of the legal restrictions have been lifted in the U.S., Canada, and other countries, industries across the globe finally have access to hemp sources that can be used as natural ingredients in their products.

Imagine disinfectant wipes that are not only as effective as traditional wipes but also made entirely of plant-based ingredients instead of harsh synthetic chemicals. Toothpaste could naturally fight harmful bacteria that cause disease and other oral health concerns without any synthetic chemicals that have harmful side effects. The possibilities of plant-based ingredients are endless, and it’s time manufacturers fully embrace them.

Using Cannabinoids for Plant-Based Products

In the consumer products industry, a growing number of companies are using hemp extracts with cannabinoids, such as cannabidiol (CBD). Yet even with the legal freedom to use these ingredients, manufacturers still face significant challenges in switching out synthetic substances for hemp extracts and other plant-based ingredients.

First, they need to choose the right hemp extracts for their products and make sure their customers understand and can track those ingredients. Manufacturers also need to know the implications of including certain types of hemp extracts in products sold in countries with varying cannabis laws. With the following tips, manufacturers can use high-quality hemp extracts to enhance the natural content and appeal of their products:

1. Brush up on the laws in any country where you operate.

The growth and use of hemp extracts with CBD and other cannabinoids are largely legal in North America, which is a hub of international trade for any market. But the specific laws that govern its use —particularly in oral and topical health products — are mostly localized.

Laws governing the use of hemp extracts in these products may differ across states in the U.S., and those same laws can vary significantly from legislation in Canada. As a result, you’ll need to pay close attention to both local and federal laws wherever your customers reside.

2. Research the right extracts, and test repeatedly.

Because hemp has such a wide variety of compounds, you should learn how the different types of extracts can apply to your products. Plenty of research has gone into the cannabinoids of tetrahydrocannabinol (THC) and CBD, but there are more than 100 other phytocannabinoids in the hemp plant.

Research and test multiple variations repeatedly to discover what works best with your consumer products. With natural, synthetic-free ingredients, you’ll also have to test different methods to perfect your new formulas.

3. Conduct studies to prove the enhancement of your products.

As more outside studies add weight to the benefits of plant-based products — including those with hemp extract and its phytoconstituents — there are plenty of opportunities to conduct your own scientific research to prove your product’s performance.

The best way to do this is through well-designed clinical and consumer insight studies. Research that highlights a product’s day-to-day benefits (such as a natural alternative for a cleaning product or a plant-based body balm to massage into tired or tense muscles) provides the most appealing data to consumers.

4. Understand any marketing challenges.

After nailing down the specific hemp extracts you want to use and then testing your products, revisit the specific regulations in the different states, provinces, and countries that make up your customer base. When it comes to marketing plant-based products that contain hemp extracts, the rules can be tricky.

In Canada, for instance, you’re not allowed to promote brands that use hemp with CBD, and these products are only sold through licensed online or brick-and-mortar distributors. There are various places you can market hemp brands and products in the U.S., however, but you need to avoid making any disease-related claims that would render your product an unapproved drug.

While these might seem like tough challenges to overcome — how are you supposed to showcase your product if you can’t market it? — consumers will put effort into finding brands focused on providing natural, synthetic-free consumer products.

Choosing to go plant-based not only frees your products of potentially harmful synthetics, but it also gives you a much broader customer base. The rush to create “fake,” synthetic products is over. We have now entered the plant-based revolution.

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Photo: Michael Cammarata at the New York Stock Exchange.

Michael Cammarata is the president and CEO of Neptune Wellness Solutions, an innovative wellness company offering high-quality, environmentally friendly, natural alternative products. Michael is also the co-founder and former CEO of Schmidt’s Naturals, one of the world’s fastest-growing wellness brands and a Unilever acquisition. He is on a personal mission to invest in and scale companies globally that will make sustainable innovation and modern wellness solutions accessible to the world.

Global PVC Panel Market – U.S. Imports Hit a New Record of $3.6B

IndexBox has just published a new report: ‘World – Floor, Wall Or Ceiling Coverings Of Plastics – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

Global PVC Panel Trade 2014-2018

In 2018, approx. 4.4B square meters of floor, wall or ceiling coverings of plastics were imported worldwide; surging by 9.1% against the previous year. Overall, the total imports indicated a strong increase from 2014 to 2018: its volume increased at an average annual rate of +12.4% over the last four-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, plastic panel imports increased by +59.3% against 2014 indices. The pace of growth appeared the most rapid in 2016 with an increase of 17% year-to-year. The global imports peaked in 2018 and are expected to retain its growth in the immediate term.

In value terms, plastic panel imports amounted to $9.8B (IndexBox estimates) in 2018. Overall, the total imports indicated prominent growth from 2014 to 2018: its value increased at an average annual rate of +12.4% over the last four years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, plastic panel imports increased by +53.3% against 2014 indices. The growth pace was the most rapid in 2018 when imports increased by 19% y-o-y. In that year, global plastic panel imports reached their peak and are likely to continue its growth in the immediate term.

PVC Panel Imports by Country

The U.S. was the key importer of floor, wall or ceiling coverings of plastics imported in the world, with the volume of imports reaching 1.2B square meters, which was approx. 27% of total imports in 2018. It was distantly followed by Germany (432M square meters), France (261M square meters), Canada (230M square meters), the UK (206M square meters) and the Netherlands (206M square meters), together achieving a 30% share of total imports. Belgium (130M square meters) and Australia (106M square meters) followed a long way behind the leaders.

The U.S. was also the fastest-growing in terms of the floor, wall or ceiling coverings of plastics imports, with a CAGR of +29.4% from 2014 to 2018. At the same time, Canada (+18.7%), Australia (+18.0%), the Netherlands (+14.4%), Belgium (+13.9%), Germany (+11.7%), the UK (+9.3%) and France (+9.1%) displayed positive paces of growth. While the share of the U.S. (+17 p.p.), Germany (+3.5 p.p.), Canada (+2.6 p.p.), the Netherlands (+1.9 p.p.) and France (+1.7 p.p.) increased significantly, the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, the U.S. ($3.6B) constitutes the largest market for imported floor, wall or ceiling coverings of plastics worldwide, comprising 37% of global imports. The second position in the ranking was occupied by Germany ($747M), with a 7.6% share of global imports. It was followed by Canada, with a 5.6% share.

In the U.S., plastic panel imports expanded at an average annual rate of +31.7% over the period from 2014-2018. In the other countries, the average annual rates were as follows: Germany (+6.1% per year) and Canada (+12.9% per year).

PVC Panel Import Prices by Country

In 2018, the average plastic panel import price amounted to $2.2 per square meter, increasing by 9.4% against the previous year. Overall, the plastic panel import price, however, continues to indicate a mild decline. The pace of growth was the most pronounced in 2018 an increase of 9.4% against the previous year. The global import price peaked at $2.3 per square meter in 2014; however, from 2015 to 2018, import prices remained at a lower figure.

Prices varied noticeably by the country of destination; the country with the highest price was the U.S. ($3.1 per square meter), while the Netherlands ($1.7 per square meter) was amongst the lowest.

From 2014 to 2018, the most notable rate of growth in terms of prices was attained by the U.S., while the other global leaders experienced a decline in the import price figures.

PVC Panel Exports by Country

China dominates plastic panel exports structure, finishing at 3.4B square meters, which was near 66% of total exports in 2018. It was distantly followed by South Korea (391M square meters) and Belgium (292M square meters), together comprising a 13% share of total exports. The following exporters – Germany (163M square meters), Luxembourg (105M square meters) and France (88M square meters) – together made up 6.8% of total exports.

China was also the fastest-growing in terms of the floor, wall or ceiling coverings of plastics exports, with a CAGR of +20.6% from 2014 to 2018. At the same time, Germany (+9.6%), Belgium (+8.7%), South Korea (+7.5%) and Luxembourg (+1.1%) displayed positive paces of growth. By contrast, France (-2.4%) illustrated a downward trend over the same period. From 2014 to 2018, the share of China, South Korea and Belgium increased by +35%, +1.9% and +1.6% percentage points, while the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, China ($4.3B) remains the largest plastic panel supplier worldwide, comprising 50% of global exports. The second position in the ranking was occupied by Belgium ($749M), with a 8.6% share of global exports. It was followed by South Korea, with a 6.6% share.

Source: IndexBox AI Platform

strategy

Latest Bayer-Monsanto Trial Reminds Us that Culture and Strategy Must Stay in Sync

What does culture have to do with the latest challenges at Bayer and Monsanto?

Since culture goes hand in hand with strategy, quite a lot.

But this fact — that strategy and culture are interrelated — has gotten lost in the current zeitgeist where culture is viewed as the last piece an organization puts in place, something you can just create or layer on.  An afterthought of sorts to innovation, product development, sales, marketing, teamwork, and strategy.

From the minute an organization comes to be, if not sooner, culture is there. It’s the basis on which founders and leaders express their purpose, their vision, and mission. It shapes the way decisions are made about what to produce and sell, to whom, and how.  Workplace habits and standards, behavioral consistency — even rituals and language — all flow from culture, not vice versa.

In other words, culture is a starting point for all of these things and more, beginning above all with an organization’s strategic agenda. Culture defines the who and the why behind strategy.

As companies grow and evolve, they tend to lose sight of the fact that culture and strategy go hand in hand, and forget that culture was initially embedded in everything they did. Culture gets reduced to a statement hanging on a poster in the office kitchen, conference room or front lobby. The connection between culture, strategy, decision-making, and behavior gets lost. The two are no longer in sync. That puts the company’s strategic agenda and intentions at risk.

This might seem disappointing yet harmless. Not so. Because a disconnect between culture and strategy and everything that flows from them can result in exactly the sort of conflicts and miscues we’re seeing with a range of organizations, large and small. Corporate strategy gets muddled and culture gets confused. The organization gets shackled in decision making, risk management and problem-solving. This has been a challenge with Bayer and Monsanto, as well as for GE, P&G, Boeing, a host of big retail companies, and across the healthcare sector.

As explained in my new book Strategic Teams and Development: The FieldBook for People Making Strategy Happen, culture should inform and help determine every decision leaders take and every action taken throughout the organization at every level, across borders, from executive group and staff directives to day-to-day choices and behavior within teams.

How can you make sure culture and strategy continue working hand in hand, and that culture doesn’t devolve into a string of empty buzzwords staring up from a culture deck that teams and individuals glance at without following through on?

The following four questions will help you assess whether and how your organization’s everyday thought and behavior is aligning with its culture — and make sure you’re not heading down the slippery slope of letting actions and decisions drift away from their cultural drivers:

1. Does the decision we are about to make reflect our values and culture around caring for our customers and their needs in a way that treats them as the assets that they are?

2. Will this decision contribute to our profit and sustenance in a way that remains true to our culture and to the purpose, vision and mission it has led us to shape?

3. Does this decision help us maintain our competitive advantage and differentiate us meaningfully in a way that aligns with our culture and values?

4. Is this decision in line with the ethics and values of service and integrity our culture embodies and is this meaningful stewardship for our full range of stakeholders?

To be a good corporate steward you have to have your eyes wide open for the needs of all types of stakeholders: customers, employees, investors, partners, and suppliers.

These questions intersect with one another in multiple places, forming a complex lattice. Decisions that impact competitive advantage or corporate stewardship will have implications for profit and sustenance. All choices will ultimately impact customers and the way your business meets their needs. There may be conflicts between one category and another, too.

Most companies check in on how they’re doing with culture every year or two at most. But given culture’s crucial foundational importance to strategy and all that flows and is expressed from it, much more attention is needed.

These four questions should be asked regularly and rigorously at all levels of operations and decision-making. They should form the basis for decision-making protocols and policies about everything from risk management and safety standards to financial management and personnel matters.

And if the answer to any of them is “no” it’s time to stop and rethink before taking action.

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Daniel Wolf is President and Co-founder of Dewar Sloan, a consulting group focused on  strategy direction, integration and execution. For more than 25 years Dewar Sloan has served hundreds of corporate, healthcare, technology and nonprofit organizations. Author of Strategic Teams and Development: The FieldBook for People Making Strategy Happen and Prepared and Resolved: The Strategic Agenda for Growth, Performance and Change, Dan has held management and governance roles at Fortune 500 companies, SME ventures and in private equity ventures. He lives in Traverse City, Michigan.

supply chain

Digital Supply Chain 2020: Here’s What Industry Players Should Know

The new year is here and with it comes a new set of opportunities, challenges, technologies, and trends to keep a close watch on, regardless of what industry your business caters to.

In 2019, global businesses saw an influx of unpredictable economic and political changes directly impacting the supply chain and customers. This year kicked off with IMO 2020, spurring panic for those that waited until the last minute to launch compliance efforts.

Beyond these concerns remains a variety of changes on the 2020 horizon that Pervinder Johar, CEO of Blume Global shares with us and how global and domestic businesses can prepare for success in the new year. Here’s a peek behind this year’s logistics curtain.

While shipment journeys are complex and fragmented, efforts to improve the flow of products will take precedence.

All the data in the world doesn’t matter if you can’t execute on it. We’ve been talking about the potential of the digital supply chain for more than two decades. In 2020, the balance finally shifts from future potential to current benefits. Connected devices and IoT-enabled solutions are giving us more data than ever to make better decisions — connecting the legs of the supply chain path while simplifying information exchange. To improve the flow of products and information from point A to point B, we will see more shippers adding sensors on almost everything, not just the most expensive equipment.

Maximized capacity and minimized empty miles.

We will see a more concerted effort to reduce waste in the supply chain. Eliminating the empty miles and excess CO2 emissions will become a bigger focus for smaller companies as larger organizations use it as criteria when selecting supply chain partners. Major manufacturers, shippers, and carriers have the clout to move the rest of the market. Smaller companies will invest in sustainable initiatives and the reduction of carbon emissions as a cost of working with major companies.

Better technology and planning will close the gap between planning and execution.

Traditional, long planning cycles don’t align to the expectations of today’s consumers. In addition to moving products, companies must deal with the added expectations from customers around product availability and expedited delivery — and in short, customers want what they want, and they want it now. While the Amazon effect has elevated customer experience across the board, it has also resulted in companies stockpiling trillions of dollars of inventory – a cost that very few aside from Amazon can justify. As a result, we can expect to see fewer companies stockpiling inventory and more focusing on improving inventory management and execution.

The American Transport Research Institute (ATRI) conducts an annual report on the operational costs of trucking. In its 2018 report, ATRI found that trucking companies traveled over 9.4 billion miles in 2017 and 20.7 percent of all those miles were empty. The industry can do better.

It has become essential for LSPs to be able to securely collaborate with their customers, carriers, and other service providers on a neutral digital platform. Accessible data and predictive analytics will remain key competitive differentiators. By establishing a centralized, digital repository that provides the same access to all reliable data across the supply chain, retailers can promise improved customer experience, competitive prices and a higher quality offering.

Low- or no-cost TMS-like solutions will become a priority for motor carriers.

Motor carriers are a critical link in the supply chain — yet they are the most dispersed and least connected of transportation modes. While they carry a huge volume of cargo — more than 70 percent of domestic tonnage— the vast majority are part of small organizations: 90 % of firms operate six trucks or fewer (source: American Trucking Association). Carriers, LSPs and shippers need to embrace solutions that provide low- or no-cost TMS-like solutions that empower even a single-truck firm with access to logistics and supply-chain networks.

Smart technologies will decrease the amount of time it takes for an invoice to be processed.

Currently, LSPs, freight forwarders and shippers need to wait weeks/months for invoices to be processed, which impacts their bottom line. But, with the increased investment in and use of smart technologies by companies along the supply chain, the amount of time it takes for an invoice to be received and paid will significantly decrease. This will also lead to better and stronger relationships between companies along the supply chain.

Artificial Intelligence will reach its potential by becoming domain specific.

The potential productivity gains from AI are anticipated to be anywhere from $13.7 trillion to $15.7 trillion by 2030, according to the McKinsey Global Institute and PricewaterhouseCoopers, respectively. The next phase of AI success happens when technical capabilities are matched with industry-specific expertise. We are at a significant inflection point in the adoption of AI-enabled solutions. Linking domain expertise and data with technical innovation is necessary for technology to reach its full potential to deliver measurable, effective results to the companies that implement them.

Tariffs and trade woes mean new supply chain opportunities in Southeast Asia.

Bigger, more sophisticated supply chains will seek out new primary sources. In part due to the tension over tariffs with China, companies are moving their supply chains out of the country and building up new footholds in Southeast Asia. Aside from tariff concerns, companies are looking at overall cost of business and the availability of resources to meet their needs.

e-commerce

5 Must-Have Features of Enterprise E-Commerce

E-commerce is everywhere — unless, of course, you look in the B2B space. Unfortunately, one segment lags behind all the rest when it comes to online sales: manufacturers. Just 38% of manufacturers have e-commerce websites, and only 6% of all manufacturer sales come through this particular channel. 

Part of the reason manufacturers are so slow to adopt e-commerce can be traced back to the old adage “if it ain’t broke, don’t fix it.” The traditional ways of doing business largely haven’t posed a problem yet, so many manufacturers don’t feel a real sense of urgency to explore the increasingly relevant direct-to-consumer model. 

It also has a lot to do with technical hurdles. For many manufacturers, moving to e-commerce involves taking on yet one more system to master — that or an expensive integration with their current enterprise resource planning (ERP) software. It’s nearly impossible to get an e-commerce platform to talk to an old “closed” mainframe, so plans to upgrade often involve a two-year timeframe or longer to get everything up and running. They might also involve a million-dollar price tag. Not surprisingly, this tends to put e-commerce on the back burner pretty quickly. 

And it’s important to note, too, that most manufacturers work through distributors and dealers, making e-commerce seem like nothing more than a mere alternative to their current traditional sales channels. 

A Missed Opportunity

What many manufacturers seem to be missing, though, is that B2B customers are also B2C customers. Chances are that they’re already shopping online for their personal needs, and not having a way to buy their business products and services online can have a hefty negative impact on the customer experience. If you’re manufacturing a commodity product and your sales process lacks the convenience of shopping for that product online, your customers might begin to look elsewhere. 

Remaining passive about e-commerce is simply the wrong approach, especially with B2B buyers moving more of their purchases online all the time. As it stands, nearly half of all companies utilize online channels for 50% to 74% of all their corporate purchases. Not being online just means you’ve missed out on an opportunity — not only to secure additional sales, but also to broaden your reach to a global level

Also, remember that it’s easier than ever for competition and new players in the market to get in front of your customers via Google, Facebook, and email. Not having an e-commerce site could easily cost you market share, even if the competition’s product isn’t as good as yours.

Beyond the Basics

Knowing that it isn’t enough to conduct all business offline, know, too, that it isn’t enough to just invest in getting an e-commerce platform, leave it there, and call it good. Your site has to offer the functionalities necessary to run an online business. If your system doesn’t support multiple pricing tiers, it probably also doesn’t mimic your current sales process. Clearly, that’s not a good thing. 

Your site needs to be able to support multiple buying options, such as “requests for quotes” as opposed to a shopping cart model. It can take time to arrive at a number in a complex B2B transaction, and the last thing you want is for a customer to have to take the interaction offline just to finalize scope and nail down specifics. 

This naturally leads to my next point. Assuming your e-commerce site comes equipped with all the basics like browse, add to cart, checkout, email confirmation, etc., there are a few features to look out for at the enterprise level. Those often include the following:

System integration options

In e-commerce, a certain amount of coordination is necessary between the website itself and your back-end system that you use for inventory and accounting purposes. Without proper integration, order fulfillment can easily get problematic. Focus on maintenance, data input, and offering a seamless user experience. Most of all, understand all the system integration options of your marketplace website before going with one provider over another.

Proper data to support search

Product information is important. It’s what consumers see prior to making a purchase decision. But it can sometimes pale in comparison to the product data used behind the scenes. A number of data fields and HTML tags enable your products and website to rank in both Google and on-site search results. Make sure your platform accommodates these options. Also, inquire about the tracking capabilities of your on-site search function. It can be useful to monitor what users found — and didn’t find — during a visit.

Customer tiers

At the enterprise level, you’ll likely run across different types of customers. Being able to segment these customers into various tiers can come in handy. Based on their purchase history, for example, you might determine that one tier would respond well to a certain promotion while another’s browsing behavior could inform subsequent product recommendations. In other words, segmenting tiers allows you to personalize your messaging, pricing, and other marketing efforts to fit the needs of your customers. So look into this functionality while reviewing your e-commerce options.

Analytics integration

Whether you’re looking at an off-the-shelf platform or a custom solution, reporting is very important. At a bare minimum, make sure a standard tool like Google Analytics can be integrated with your e-commerce system. You’ll also want to inquire about the setup of advanced features like e-commerce tracking.

Merchandising

Generally, any platform you go with will provide the functionality of assigning products to categories. This can help with on-site search and make it easier for visitors to browse your product line. Beyond that, you might wish to feature certain products. The question, then, is what ability do you have in the platform to create banner ads, highlight related products on a product page, create landing pages around a spotlight topic for the month, and feature products in other ways? 

Providing a good online experience naturally makes customers feel good about doing business with you. It also increases the likelihood of driving new customers to your business without needing to invest in additional resources. 

Ultimately, you can handle more transactions with an e-commerce site in your corner. Just make sure your site provides you with all of the functionalities you need to keep your business running smoothly and your customers happy. 

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Michael Bird is the CEO of Spindustry, a digital agency focused on e-commerce, SharePoint portals, and enterprise websites. He has almost 30 years of experience in interactive development, user behavior, and business solutions. His successful agency, Spindustry, puts these strategies into practice to help businesses grow.

newtrend

NEWTREND USA VINDICATED BY CBP’S FINDING OF NO EVASION

City of Industry, California-based Newtrend USA Co. Ltd., a leading producer of fine chemical products, announced Sept. 30 that U.S. Customs and Border Protection (CBP) found no merit to the transshipment allegations made against it by its competitor, Salvi Chemical Industries Ltd. 

In September 2018, Salvi alleged to CBP that Newtrend evaded payment of antidumping duty cash deposits by transshipping Chinese-origin glycine through Thailand. That complaint initiated a CBP Enforce and Protect Act (EAPA) investigation in which the government required Newtrend Thailand to prove that it was not transshipping glycine produced in China.

The EAPA probe confirmed that Newtrend only manufactures and ships glycine to the U.S. manufactured at its affiliate in Thailand, Newtrend Food Ingredient Co., Ltd. 

“Newtrend is gratified with the outcome,” says Douglas Heffner, chairman of the U.S. Customs and International Trade practice at Drinker Biddle & Reath, LLP, who represented the company. “They were confident they had operated in complete compliance with all regulations and are pleased to put this behind them.”