How Pricing Pressures Are Impacting Manufacturing Consumables

By: | Category: ERP

From pandemic-driven increases in consumer demand for electronic items to a backlog of imports at clogged California ports to weather-related industrial disruptions in the United States, several variables are combining to stress the world’s supply chains. According to company leaders and analysts, they are causing cost hikes and delays in a variety of industries, hurting profit margins and prices.

Expense Reduction Analysts’ (ERA’s) quarterly newsletter is designed to bring forward current market conditions and the potential impact to procurement and supply chain planning in the Manufacturing Consumables and Packaging Supply sectors.

In this newsletter, ERA provides insight into how these pressures are affecting:

  • Plastics
  • Pulp & Paper
  • Lumber
  • Metal Products

Plastics Market Challenges

We are experiencing unprecedented times with respect to plastics market movement, as indicated in the below graphs from The Plastics Exchange, and it is highly unlikely that markets will ever return to Q1 2020 levels. Longer lead times for resin-based products have also become the norm, some stretching out as far as 52 weeks or more. The Texas deep freeze isn’t entirely to blame for what we are seeing, as the market upswing was in full effect prior to this event, but it did contribute

to reduced availability as well as longer lead times. Multiple Texas plants had to be taken offline for repairs and maintenance, and some are just now coming back up to full capacity.

Read the entire newsletter from our partner Expense Reduction Analysts below or contact us for more information.