In the member spotlight this week is AESSEAL, a business member of the Chartered Institute of Export & International Trade based in Rotherham.
Its mechanical seals and support systems keep machinery working across a number of sectors: mining, oil and gas, as well as food and beverage.
With 61 entities operating from 161 locations in over 100 countries, Christian Pulman, the firm’s head of procurement, has his work cut out to keep on top of AESSEAL’s global supply chain network and compliance requirements.
Pulman spoke to the Daily Update about how he and his 10-strong procurement team handle disruption from shipping to tariffs and offered tips on preparing for sudden changes in the geopolitical climate.
Shipping disruption
Pulman describes shipping disruption following carrier’s avoidance of the Suez Canal as a challenge for the business to maintain its customer service standards.
“We need to make sure we have inventory in place.
"Typically, it’s just eight to 10 weeks on the ship from China, when that’s up to 12 to 16 weeks, it just ruptures stock in terms of what we had in place and prepared for the current lead time.”
Like many firms trying to overcome the disruption, Pulman say the crisis “twisted our arm” on spending, with AESSEAL turning to air freight to mitigate the immediate impact.
“We had to spend a bit more on freight and getting stuff shipped by air,” he says, “[The disruption] pretty much made our decision for us.”
AESSEAL wasn’t alone in making this kind of outlay. A December report from the International Air Transport Association (IATA) revealed that global air cargo demand was up 6.1% year-on-year.
The IATA said that “persistent disruptions in Red Sea shipping” as a key reason behind this rise in air cargo demand.
Contingency-planning
It wasn’t just the spend on air cargo that helped to mitigate disruption. Pulman says AESSEAL has three key strategies towards ensuring they continue to ensure timely delivery.
The first involves ensuring there’s “healthy safety stocks” in the company’s Rotherham factory to absorb the impact of any delays.
The second is ensuring a strong relationship with existing suppliers. Pulman describes “staying in constant communication” with firms in AESSEAL’s supply chain to get ahead of any unavoidable disruption.
Finally, he says he’s “actively work[ing] towards having alternative approved suppliers” in the instance that disruption can’t be side-stepped.
“Obviously trade can be hugely unpredictable, with things changing over a matter of hours,” he says, “but by failing to prepare you’re preparing to fail”.
“Ensuring you work with diverse suppliers, ensuring you're auditing your supply chain, that you have sufficient stocks and order coverage to minimise disruption is critical.
“Make sure that you’ve covered all bases.”
Data and software
Underpinning this level of preparation is a clear record of AESSEAL’s processes, customers and suppliers on its Enterprise Resource Planning (ERP) system.
“We record all the country of origins for products we purchase on our ERP system, so that makes our life a little easier.”
It was especially useful in the aftermath of US president Donald Trump’s steel tariff announcement, when Pulman set about reviewing their impact on the firm – “I spent probably 3 hours reviewing a global supply chain into the US”.
Environmental preparation
Given the breadth of AESSEAL’s supply chain and its European customers, the firm is preparing for the implementation of EU climate legislation such as the Carbon Border Adjustment Mechanism (CBAM) and Ecodesign for Sustainable Products Regulation (ESPR), which will require many of its products to contain a Digital Product Passport (DPP).
Pulman says that ensuring the firm has the product data needed to comply has been high on his list of priorities, although that’s not something he’s found shared throughout the industry.
He says that his approach to 2030 – the end of the EU’s current Environmental Action Plan to fulfil its long-term climate targets – has been "understanding the emissions associated with the products there they're making, but not many do it.”
Working with steel mills across Europe, who supply the materials for firm’s seals, he says that only the largest have been able to confirm the emissions associated with their products.
“What does that say about the rest of the market when it comes to buying from a various range of suppliers, the US and China?”
The current political climate in the US means that environmental climate is being taken less seriously by manufacturers, potentially posing further problems when sourcing materials from across the pond.
“Environmental sustainability is off the cards at the moment,” he says, “therefore, US manufacturers are not incentivised to produce this information, which could be a requirement of the DPPs.”
Compliance challenges
Pulman says the Chartered Institute’s suite of training courses has been “instrumental” in getting staff up-to-speed with customs foundations, ensuring that the firm trades compliantly.
On compliance, he says there’s a lot to consider given the breadth of its supply chain and controls in place:
“We need to ensure our products are correctly classified with the correct [Harmonised System] HS codes, as well as ensuring that your ordering products comply with export control regulations – end user destinations, application details and restricted party screening.
“We need to ensure that we comply with the local custom requirements, whether it's the US, Europe or India.”
In the past three years, he adds that 15 colleagues have completed a mix of introductory customs and beginner and intermediate importing and exporting courses, coming away with “knowledge and insight”.
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