It’s hard to forget those empty shelves and ‘out of stock’ pop ups of early 2020. Heightened demand as we all faced the prospect of months on end at home led to product shortages left right and centre. You could be forgiven for thinking that the world and our access to all of the things in it has returned to normal by mid 2022. Sadly it’s just not so. 2022 sees us facing a very different kind of scarcity.
This time round the shortages can’t really be blamed on the pandemic. Sure, there’s a bit of a Covid hangover in the form of delayed shipping and new Chinese lockdowns snarling things up but, by and large, the product supply issues we’re seeing in 2022 are a different beast entirely. And the global supply chain has revealed itself to be considerably more delicate than anyone previously believed.
So what’s impacting supply and demand in 2022? In short, everything! Economies in various stages of recovery are creating shortages in certain sectors where raw materials or the workforce to process them simply aren’t available. Geopolitical events including Brexit, Covid containment measures in the Far East and war in Ukraine are restricting the movement of goods across the globe. Not to mention the environmental disasters that are contributing to the current perfect storm hammering global supply networks. So where are you likely to notice it?
A massive run on electronic equipment during the pandemic created demand for semi conductors that the world just hasn’t been able to keep up with on the other side. Unfortunately semi-conductors are an essential component in car manufacturing, smartphones and a whole host of electronics creating a noticeable shortage in these sectors. In the UK new car registrations are down 15% on the previous period.
Prices have risen sharply for the raw materials that go into making nappies and the sector is still suffering from shipping container shortages caused by the pandemic and the crisis in the Suez Canal. Fewer nappies are getting where they need to be and it’s costing more to do so!
Drought in Brazil in 2021 severely restricted coffee bean growth and of course, increasing production isn’t instant – new plants take years to reach maturity. The transportation of the fewer coffee beans that have been harvested is slowed by the global shortage of shipping containers and chaos at world ports. Watch the price of coffee continue to rise.
Affecting the construction industry and drinks manufacturers, the recent shortage of aluminium has two causes. China significantly reduced its aluminium production to meet emissions targets and the increase of fuel prices in Europe caused manufacturers to reduce production.
Backed up supply chains, rising energy prices and the restriction on products leaving Russia and China means that we will absolutely see a shortage of certain food products in 2022. Manufactured meat substitutes are likely to be hard hit requiring a significant amount of energy to produce.
What does this mean for you? Well on a personal level you may find that you can’t get your hands on the products you want at the price you’re willing to pay. For businesses, the unpredictability of the global supply network throws yet another challenge your way at a time when you’re potentially still in recovery from the last few years.
We can’t predict the impact on your business or what could possibly happen next (these days really, anything goes). BUT we can help you to try to mitigate the impact of global uncertainty by getting your stock taking measures absolutely spot on. Good stock taking will help you get to grips with what product you’ve got and where it’s currently sitting as well as what your customers are asking for, allowing you to make better decisions for your business, earlier.
Contact the team today to discuss your stocktaking needs.