I recently had the chance to not only speak with one of Panjiva's founders, Josh Green, but was also able to use and explore the site. For those who do not know Panjiva, the web-based sourcing insight tool is a clearinghouse of sorts for information on global suppliers. By aggregating numerous sources of data including shipping manifest details on containers, Panjiva is able to provide a surprisingly complete perspective on suppliers in developing markets. I say "surprisingly" because anyone involved in global trade knows it's possible for buyers and suppliers to game shipping and customs details by using trading companies, changing harmonized codes, etc. But most companies aren't this sophisticated nor do they have any reason to engage in this type of activity.
At this point in time, Panjiva is only covering the apparel marketing, but they expect to expand into other industries -- including manufacturing -- in the near future. All of which is exciting indeed and warrants significant analysis that I plan to devote to Panjiva. In two additional posts, I'll dig into my experience with the solution and how I believe it can become an invaluable tool for global sourcing and trade professionals who don't have the time to aggregate this level of information let alone analyze it on their own. But for this first post, I'd like to share some observations from a recent Supply and Demand Chain Executive article that discusses Panjiva's latest findings in the textiles sourcing and trading world.
According to Panjiva, the apparel market is undergoing massive upheaval from a global sourcing perspective. The above-linked article notes that "the number of suppliers actively serving the U.S. market dropped over 70 percent in just three months; from 22,099 suppliers in July to 6,262 suppliers in October." And many supplier facilities are in danger of going out of business. Panjiva suggests that of those factories that survived the initial order downturn, "40 percent are now on the Panjiva Watch List as a result of suffering a year-over-year drop of 75 percent or more in volume shipped to U.S. customers."
As I mentioned at the beginning of this post, manifest and related customs-reported information is never 100% accurate. But in terms of gauging how suppliers are weathering the current economic storm from an order perspective, it's as good a gauge as any from a macro-perspective. While I'm not yet completely sold on the thoroughness of Panjiva on an individual supplier basis because of all the variables involved that could be missing or incomplete (e.g., supplier performance, credit information, selling through trading companies, changing classification/harmonized codes, etc.), the information that they provide is a fascinating and certainly directionally accurate in the aggregate.
Stay tuned for my additional commentary next week on how Panjiva could prove a useful if not invaluable supplier information tool in a global sourcing arsenal. Even if it's not perfect, it can still be remarkable in its insights.
- Jason Busch