May 17, 2020

BDA – Global brands need global supply chains

Procurement
distribution
BDA
Supply Chain
Dan Brightmore
6 min
BDA discusses distribution and procurement in supply chains
BDA is among the world’s biggest distributors of promotional merchandise. We hear from its seasoned Director of Global Sourcing Rob Bangerter about wh...

BDA is among the world’s biggest distributors of promotional merchandise. We hear from its seasoned Director of Global Sourcing Rob Bangerter about why brands should look at the big picture when it comes to cost savings in sourcing and procurement strategies.

BDA is America's premier promotional merchandise agency, helping Fortune 1000 companies worldwide - such as Coca-Cola, Sony, AT&T, NFL, Ford, Starbucks and GE - meet their business needs through the power of branded merchandise. “Customers come to us to extend their brand reach through strategic initiatives, custom campaigns, integrated eCommerce programs and sports sponsorship activations across every major league and team,” explains Director of Global Sourcing Rob Bangerter. BDA has over 750 associates around the world at more than 75 locations, both domestic and international (including London, Los Angeles, Manchester, New York, Shanghai, Paris, Shenzhen and Manila) where strategically placed sales offices can also support the supply chain needs of larger clients working in situ. Headquartered in Washington, BDA operates two domestic and two international fulfilment centres driving annual revenues in excess of $210m.

Focused on the global supply chain side of the business, Bangerter has been with BDA for nearly two years but believes his career background, including 30 years-experience in direct manufacturing and factory management, lends a unique set of skills to his role because many executives who work with factories have rarely worked on the ground level. “As a process engineer turned global sourcing director, I have the advantage of knowing how both sides of the operation work,” he maintains. “It comes in handy when evaluating processes and goals for procurement strategies, because global brands need global supply chains.”

In pursuit of these goals what has Bangerter learned that can help companies with their approach to procurement? “We’re very deep on where we source and have a tremendous expertise in the needs from a supply chain. Other companies might just focus on supply out of China… We also use Egypt, Vietnam, Pakistan, Mexico and Europe, as well as the US,” he reveals. “Recently it’s become a key strategy to help us avoid tariffs on goods out of China by offsetting cost with other global choices. We put great focus on continual development to stay ahead of issues that can plague supply chain practitioners. Looking at the big picture and realising other countries are capable of delivering great products for your customers is a challenge we’ve been facing for the last couple of years to ensure we always have global options.”

BDA source product based on a combination of quality and cost. “It’s one of the reasons I joined the company,” says Bangerter. “I’d known about their work for 20 years and had a huge respect for what they did. There are many promotional product companies out there putting out inferior merchandise which doesn’t innovate. This is where we find our competitive edge and deliver consistently for clients like the NFL. Our customers are aware they might be able to find a similar product cheaper but leading brands don’t want to compromise their reputation and look to BDA’s supply chain to support them and love the way we’re able to bring them something new and deliver speed to market.” Bangerter ensures BDA maintains a diverse network of preferred suppliers and manufacturers, with an expectation each performs as a valued partner, not simply a provider of goods. “Because protecting the brands we work with is more than just a priority - it’s the law,” he adds. “We are fully compliant with US and international laws around product safety, child labour and environmental protection so our customers know they are in safe hands.”

Beyond quality and cost, BDA aim to innovate with regular products and find new ones. Known for its bobbleheads, produced for ice hockey teams for many years, BDA has innovated by producing a base that looks like ice and sets the product apart. For the PGA Tour, BDA leveraged its global network and product development for a FedExCup limited-edition anniversary bobblehead collection featuring the past 10 winners. Working directly with the PGA, players’ agents and sponsors, BDA secured approvals to bring each player to life in their winning stance which helped increase FedExCup impressions, followers and excitement surrounding the playoffs.

To deliver projects like these BDA are exploring new ways to keep the business connected via cloud-based technologies. “Communication is one of the biggest challenges, especially when there may be language barriers in the country you’re dealing with or different slang and terms for industry processes,” explains Bangerter. “We’ve been implementing a variety of tools to help with that, some we’ve developed in-house and others software we’ve modified for our own use cases. We use Smartsheet (a software as a service application for collaboration and work management with a spreadsheet-style user interface also championed by the likes of Netflix and HP) to assign and automate tasks, track project progress, manage calendars and share documents. This aids our procurement processes worldwide with all the information held in the cloud where users can find one true source of information. I can have a sheet open on a new product that can be worked on simultaneously here in the US and by one of my colleagues in Shanghai. Smartsheet are a local company (based in Washington) so we’ve been able to work with them to make modifications to fit what we do, and deploy globally at scale.”

BDA remains in Promo Marketing’s top five products distributors (on a top 50 list responsible for over $5 billion in annual sales in 2017) following on from successes such as the Ghostbusters property launch. In conjunction with Sony Pictures Entertainment, BDA distributed in excess of 28,000 Ghostbusters bobbleheads to stadiums totalling more than 100,000 attendees, creating 2.3 million toys for Kellogg’s cereal boxes and fulfilling back to school merchandise for over 3,000 Walmart stores across the US. Sony were thrilled with BDA’s efforts: “We look to them to extend our property in traditional channels as well as new ones, delivering every time.”

“We are great at hitting the ground running in new product areas we may not have previous experience in,” adds Bangerter. “We can pull experts in to drive that. We have customer focused teams which draw on synergies across the business with staff from sales, supply chain, and finance helping our product development teams meet the needs of the customer. The biggest benefit comes from the speed to market standpoint as our core people meet regularly to steer that. For example, 18 months ago we took on Orange Theory Fitness as a client and are helping them develop technical athletic wear, which is a new direction for us and one where we’ve been able to create product competitive with the big brands.”

It’s that entrepreneurial spirit and goal to evolve deep in the company’s DNA which has attracted new hires from the likes of Amazon, Microsoft and Starbucks. One such new recruit, Global Procurement Director Davis Velasquez, echoes Bangerter’s positivity on his quest to help BDA scale globally: “What BDA does, creating custom branded merchandise unique to every client, requires significant logistics and supply-chain optimisation behind the scenes. By implementing scalable solutions, BDA will improve transparency between teams and other organisations and handle challenges, like last-minute orders and trademark requirements, seamlessly.”

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

supplychain
Boeing
Airbus
tariffs
3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic. 

Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years. 

It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC. 

The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn. 

In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products. 

Boeing-Airbus dispute by the numbers  

  • The dispute began in 2004
  • Tariffs suspended for 5 years 
  • $11.5bn worth of goods affected by tariffs
  • $3.3bn in duties paid by businesses to date 
  • 15% levy on aircraft and 25% on non-aircraft goods suspended

Both sides welcome end to tariffs 

European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.

“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.

Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”. 

The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."

This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.

Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”

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