2022 Supply Chains Seeing Disruption on Every Level

Supply Chain Disruption Expected to Continue

From the raw materials to the final build, companies across the industrial landscape are seeing forms of disruption, creating a year of unprecedented uncertainty and concern for the future of their supply chains.

At the very origins of the supply chain, there have been raw material shortages. Since the beginning of the year, manufacturers have experienced major challenges sourcing noble gases, palladium, nickel, platinum, and aluminum necessary for electronic components. Even more concerning however, is that manufacturers who have worked to pivot their supply chains toward alternative suppliers have found it extremely difficult and expensive. According to a report from Bloomberg, ongoing geopolitical conflicts and COVID lockdowns have, “created significant inflationary pressure, making electronics manufacturing, 20 to 30% more expensive.” As a result, manufactures and their service providers have had to pass their rising operating costs downstream.

These issues, combined with the severe inflationary pressures being seen all over the world (mostly due to the residual effects of the COVID-19 pandemic), have resulted in a rising of prices across the board, as well as long lead times. And things are only going to worsen: countries such as the United States and England, as well as other countries in Europe and Asia, have been slowly increasing interest rates, making it more expensive for companies to borrow. According to some experts, however, with complex geopolitical tensions continuing for the foreseeable future, these efforts, while being taxing to businesses, will do little to reduce inflation on the product cost side. In fact, in some respects, it strains the global supply chain even further.

A Need for Inventory Ownership Solutions in Supply Chains

What does this mean moving forward? The obvious answer is that it necessitates an end to the just-in-time inventory model that has characterized much of the 2000s. Rather than being regular players in the marketplace and sourcing inventory on an as-needed basis, manufacturers in industries such as automotive, healthcare, consumer electronics, and more will have to utilize strategies to insulate themselves from the market as much as possible.

Day to day, there is simply no longer a guarantee the critical inventory needed will be available, at an acceptable price, as a manageable lead time. Inventory Ownership Solutions, which are designed to help companies acquire large quantities of inventory in single orders, are one such strategy. This way, not only will the company have the inventory on hand when needed regardless of what the market does, but it avoids price increases due to inflation, shortages, or third-party markups. Additionally, through a solution with Partstat customers can store their inventory in secure, climate-controlled, industry-leading facilities while saving up to 30% in annual carrying costs.