Ongoing shortages continue as the world recovers from a pandemic and prepares for a possible recession. Suppliers, manufacturers, and global brands must strengthen visibility to anticipate future disruptions and adapt strategies for resilience through 2023.
Most of the recent shortages result from several factors, including decreased availability of labor, price gouging, emergency demand, and government actions. Adderall, CO2, steel, and beer, are examples of shortages rooted in various complex factors. We can gain insight into what ongoing shortages reveal about the supply chain to develop resilience strategies.
Strikes, volcanoes, and CO2 cause beer shortages
UK pubs may face a beer shortage ahead of the World Cup when more than 1,000 drivers and workers threaten to strike in November. This news came after last month’s reported carbon dioxide shortage that could threaten the beer supply chain through 2023. Carbon dioxide shortages result from several factors, including contamination of extinct volcanoes and the ethanal plant shutdown during the pandemic, which have yet to resume operations.
Record heat has increased beer demand, and because CO2 is a byproduct of other processes—any slowdown of those processes can affect supply for years. These slowdowns are alarming examples of how environmental forces will affect supply chains for years.
Metals in short supply
Metals such as steel, aluminum, and copper are in short supply because suppliers have been unable to keep up with unexpected metal demand increases over the last few years. These increases have come from infrastructure projects during the pandemic paired with a pandemic-decreased availability of labor.
Ongoing shortages of metal are a genuine concern. Metals such as steel and copper are key materials in many projects— from dishwashers and cars to buildings and electricity. Steel prices have increased so much that it’s created a steel market bubble, which is expected to burst in months or years to come. A steel market bubble, housing market bubble, or any market bubble bursts, the effects on prices at every stage of the supply chain will be significant.
The latest prescription drug shortage
The US FDA has also declared a nationwide Adderall shortage, citing manufacturing delays and factory shutdowns. This news comes after years of shortages in other government-regulated industries, including fuel. Government-regulated infant formula reached a staggering out-of-stock rate in May of 2022, prompting desperate mothers to make homemade baby food.
Government-regulated industries require government-regulated solutions, which may lead to more collaboration between private and public sectors. Pharmaceutical supply chain managers can expect ongoing shortages until at least January 2023.
Prepare for shortages with the proper tools
It’s not a question of whether shortages will continue but what the subsequent shortages will be. The pandemic will affect supply chains for years, and ongoing environmental challenges will continue to present obstacles for supply chain managers worldwide. A strategy for resilience can help prepare for inevitable challenges. Diversified networks, robust transportation management, and data-driven forecasting are a few ways to mitigate the risks of ongoing shortages.
Diversified supplier networks
Supplier diversification is one of the most critical solutions for procurement managers looking to strengthen the resilience of supply chains. Cultivating solid relationships with various suppliers allows businesses to mitigate disruptions’ risks. Expanding networks comes with a need for supply chain managers to regionalize and even localize their supply sources. Shorter supply chains are more resilient supply chains, especially when shortages are as unpredictable as they currently are.
Robust transportation management systems
In a world of continuously evolving obstacles, advanced technology makes all of the difference. By adopting a robust transportation management system (TMS), supply chain managers can access comprehensive data, real-time tracking, and the continuous visibility they need to navigate creative supply solutions. CTSI-Global’s Honeybee TMS™ also provides access to relationships with over 20,000 carriers, which is near-essential to cultivating a diversified supply chain.
Forecast challenges with logistics
Ongoing shortages show no signs of stopping, but supply chain managers respond efficiently with logistics-driven solutions. CTSI-Global provides shipping leadership with the precise insights they need to predict and understand today’s supply chain challenges. With advanced technology and tactics backed by data, decision-makers can successfully navigate unprecedented challenges.
Don’t let ongoing shortages bury your bottom line. Contact CTSI-Global to discuss your company’s risk strategies.