These are strange times we are living through for sure, with seemingly new challenges around every corner. So, the current global supply chain issue should not be a big surprise for any of us. How we choose to handle it is another thing; we can all panic and let fear and uncertainty dictate, or we can work together and plan our way through it.
The pandemic has affected mills with lack of capacities and labor constraints, and they have been slow to ramp up to the high demands during the recent manufacturing highs. Base metal pricing has increased more quickly than anything we’ve seen in decades, and it has increased sheet and plate prices in virtually every metal category, from aluminum to steel, to copper and more. In fact, cooper is becoming a precious commodity with some predicting violent price swings as high as $20 a pound in the face of dwindling supply, while demand continues to be driven by production of electric vehicles.
Many are calling the current situation a bubble, one that will be short lived as soon as supply catches up with demand. Some are optimistic that supply will catch up by mid-2022, and others more worried are looking at least a year out. Right now, nearly all manufacturing sectors are strong with increasing demand. None of us want to find ourselves without materials to fulfill orders or holding the bag with excessive inventory acquired at extremely inflated prices only to have the bubble burst and prices freefall.
In my opinion, the key to all of us weathering this supply shortage effectively is planning, cooperation, and communication. We all need to work together and consider each other’s position within the whole value chain. Extended forecasting needs to better than ever, up and down the line, to take into consideration possible materials shortages and slower than normal delivery. At TCI we continuously review inventory levels to ensure availability for our entire customer base. We’ve also worked directly with our customers’ purchasing departments to forecast upcoming needs so we can ensure a continuous supply. Add to that our recent investments made in capital equipment, including a digitally controlled precision plate saw and a second OMAX waterjet machining center that have greatly increased our efficiency and timeliness when it comes to supplying Machine-Ready Blanks. These investments allow us a better yield, which is additional insurance against material shortages, and allows us to pass these savings along.
We are asking customers to give us as much notice as possible by sharing forecasts and placing orders early. Looking further out with respect to your materials needs lets us combine our capabilities, buying power, warehousing, and logistics to provide you with just-in-time materials.
The more information we have regarding your expectations the better partner we can be. Together, we can match your production and corresponding materials needs against the rising or lowering tides of materials availability and cost.
Don’t panic, we will get through this materials shortage, together.
Thanks for reading –
Ben