Paper For the Planet
For REEL
PROBLEM
REEL Paper, a US-based brand focused sustainable paper products, faced significant challenges in managing its supply chain operations in China. As the company sought to meet growing demand for eco-friendly alternatives, it depended on Chinese manufacturing for efficiency and cost-effectiveness. However, this reliance led to obstacles in logistics, quality control, and financing.
Logistically, REEL Paper encountered issues with transportation delays, customs regulations, and fluctuating shipping costs. The distance complicated timely delivery and inventory management, making it hard to respond to market changes. Delays disrupted customer relationships and jeopardized revenue.
Quality control became another critical concern; maintaining consistent product quality from overseas manufacturing proved problematic. Variability in raw materials and local manufacturing practices often resulted in discrepancies that affected product integrity. This necessitated rigorous quality assurance measures, often requiring significant investment in on-site inspections.
Financially, the company had substantial capital tied up in its foreign supply chain, complicating access to working capital. US banks hesitated to finance these operations due to perceived risks related to international trade and currency fluctuations. As a result, REEL Paper struggled to maintain liquidity, hindering its ability to invest in growth or manage operational costs effectively.
Solution
Plastic Conscious developed innovative solutions to address the challenges faced by REEL Paper in managing its China-based supply chain. To enhance quality control, the company implemented regular factory site visits, ensuring consistent product quality by conducting thorough inspections and establishing strong relationships with manufacturers. This direct oversight facilitated adherence to quality standards and minimized discrepancies.
For logistics management, Plastic Conscious optimized transportation routes and established a reliable network of freight partners, which improved delivery timelines and reduced shipping costs. By leveraging data analytics, they monitored real-time shipping status and adjusted plans proactively to mitigate delays, this was even more critical in COVID times when shipping costs spiked.
To further enhance financial stability, Plastic Conscious introduced cost controls by ensuring multiple suppliers. This approach not only mitigated risks associated with relying on a single source but also fostered competitive pricing, thereby enhancing overall cost efficiency.
Recognizing the financial strain of the foreign supply chain, Plastic Conscious offered over $1.5 million in 120-day supply chain financing. This initiative provided REEL Paper with immediate liquidity, enabling timely payments to suppliers while supporting operational flexibility. Together, these strategies empowered REEL Paper to streamline its supply chain, improve product quality, and boost financial resilience.
