How Global Industrial Helps Customers Navigate Supply Chain Shortages And Rising Costs
Global Industrial takes a proactive approach to maintaining a reliable and resilient supply chain, ensuring that our customers can quickly get the items they need to run a successful business operation. Here’s an inside look at how we respond to supply chain shortages and rising costs to ensure long-term success for our valued community.
Preparing for raw material shortages
With over 40% of Americans fully vaccinated as of early June 2021, and states reopening at scale, pent-up demand for products is competing with low inventory. Consider the booming real estate market: low interest rates have fueled home purchases, but there aren’t enough houses for sale. It would make sense to build more houses to meet the demand, but lumber prices have nearly quadrupled due to labor shortages and environmental conditions.
Lumber isn’t the only raw material in short supply. Steel, aluminum, copper, and plastics are all commodities experiencing similar spikes in prices due to industrial and consumer demand. The high prices have made it difficult for manufacturers across the globe to rebuild inventories that were depleted during factory closures at the height of the pandemic. In fact, factory prices rose 6.8% in April alone.
Raw material supply chain challenges are clearly an expensive problem, and unfortunately it seems like it won’t be resolved quickly. Our analysts believe this trend will continue through 2021.
To help our manufacturing customers prepare for this ongoing shortage, our team is scouring the planet to get as many materials as we can into our inventory—at the best prices currently available. Our procurement team works quickly to equip as many businesses as possible, but it’s important to note that due to demand and competitive pricing, our stock may be limited. We recommend acting on purchasing decisions quickly to avoid any additional delays in securing raw materials.
Consider that the high prices and shortages right now might actually be compounded by more demand later in the year from businesses that attempted to wait out the spikes. Too many companies waiting now can lead to more extreme shortages—and even higher prices—in Q3 and Q4 and into 2022. Your business will be best prepared by planning ahead and acting fast.
Planning for shipping and freight delays
In the spirit of acting quickly, we’re encouraging customers to plan ahead for all projects—even if it isn’t slated to be built or manufactured until the very end of the year. This not only preempts any additional spikes in raw material pricing, but also better prepares businesses for ongoing shipping and freight delays.
Port and shipping lanes will continue to see delays all year, and not just because of a weeklong Suez Canal blockage. Business shipping, consumer packages, and freight customers are all competing for limited shipping capacity as demand for products continues to grow. If you wait to order any needed business supplies or equipment, you may not only find higher raw material costs, but also higher costs for shipping paired with longer wait times.
Global Industrial has multiple distribution centers across North America to help reduce shipping expenses and wait times for our customers. Our products, like floor scrubbers, pallets, and shelving can be sent quickly and at affordable rates. We work closely with shipping partners to deliver other items, like raw materials or national brands, directly to you. Businesses have enough to think about right now—let us handle the shipping as you continue to serve your customers.
Managing labor shortfalls and demand
Raw material prices and shipping delays have been compounded by another shortage: labor. A lack of employees in U.S. ports has caused ships to sit for a week or more as they wait for cargo to get unloaded, which compounds expenses and the time it takes for products to get to consumers. And American factories and distribution centers that had to slow or stop production due to mandated closures or a short supply of raw materials must now try to attract workers back, even as pandemic-related unemployment benefits remain.
According to U.S. Bureau of Labor Statistics data, the U.S. is experiencing a record number of job openings compared to the last decade. With 8.1 million roles available, it’s clear that employers are eager to hire. But with so many openings, the competition between businesses for qualified labor can intensify. Though our customers might not be able to resolve the labor shortage for raw material producers or shippers, Global Industrial has a few ideas for how you can staff up your own business.
A recent study from PwC found that about 63% of employees had increased financial stress during the pandemic, with 45% stating those financial worries had impacted their productivity. Businesses may become more appealing to job seekers by offering benefits beyond a paycheck, like financial wellness initiatives. Creative benefits like Earned Wage Access (EWA) helps with recruitment while improving employee productivity and decreasing turnover. Referral bonuses and a reputation as a great place to work may also assist your business in overcoming labor shortages.
Build a resilient supply chain with Global Industrial
The pandemic caused many businesses to flounder as supply chains broke or went off course. However, savvy companies were spared because of their ability to think ahead and act in the moment. But even those businesses that took aggressive steps to minimize risks at the start of the pandemic may still struggle with current raw materials, shipping, and labor challenges. No matter what the rest of the year may hold, business continuity plans with robust supply chain planning can help Global Industrial customers, like you, weather the storm.
A strong business continuity strategy relies on building a supply chain that is low-risk, secure, transparent, adaptive, fast, and optimized. Global Industrial offers consulting services that are designed to help our customers thrive not only today, but also in the future. Our team of experts will work hand in hand with your business to uncover pain points and areas of opportunity so you’re well-prepared for the unexpected.
In a challenging business environment, planning and relationships are critical to long-term success. Let us be your trusted partner in helping your business navigate these challenges and come out stronger on the other side.
The information contained in this article is for informational, educational, and promotional purposes only and is based on information available as of the initial date of publication. It is the reader’s responsibility to ensure compliance with all applicable laws, rules, codes and regulations. If there is any question or doubt in regard to any element contained in this article, please consult a licensed professional. Under no circumstances will Global Industrial be liable for any loss or damage caused by your reliance on this article.