Nearly every aspect of our lives has been affected by one or more supply chain issues recently. Whether it is the decrease in the supply of oil and it’s affect on gas prices, or the shortages of many consumer goods, we’re all aware of how interconnected the world has become. And it seems like every day there is another event that impacts a different market or increases the stress on an already affected sector. If it’s not the pandemic, it’s war in Eastern Europe. These play a part, but supply chain disruptions are often much more complex, and not solely attributable to one distinct event. Policies put in place in times of plenty can suddenly reveal themselves as poor decisions when a major event like a world-wide pandemic or a regional conflict are added to the mix.
We as consumers and citizens can’t solve most of these issues; we must adapt to the current conditions in our home and work lives as best we can. The package and label industries are no different. As we near the end of April in 2022, almost every component of a pressure-sensitive label, a shrink-sleeve, and flexible packaging is in short supply. These components include paper and film substrates; adhesives; inks and coatings; and paper & film liners. Added to these shortages are issues occurring when materials finally do get shipped. The increasing cost of fuel is driving up the cost of transporting raw materials and finished goods. Shipping backups at receiving ports are delaying the arrival of raw materials produced overseas, sometimes by weeks.
In the long-term, based on past episodes of supply-chain shortages, we expect these markets will correct themselves. But in the meantime, raw material shortages will mean longer lead times and increased costs. Here’s what you can do:
Stay a Step Ahead
If you can, plan your label or flexible packaging requirements six months out. You should at least have a forecast for the next three months. Estimate your future requirements as soon as possible, and place orders accordingly.
Be Flexible
Consider alternate materials that might work for your application. You may find a material component that is more readily available than your existing material and adapts well to your construction and specifications. This can often reduce lead times in the short term while giving you more options in the future.
AWT can help. We have established relationships with raw materials suppliers and the volume of material we require gives us a market advantage. We’re also in constant communication with these critical suppliers, and we get updates on critical materials on a regular basis. This gives us the ability to provide you with the latest information on market conditions and recommend actions to reduce the stress of the current situation.
