From superalloys to sheet metal, raw material has slowed the post-pandemic ramps of many industries. The Allegheny strike in 2021 and sub-sequent consolidation of flat materials, coupled with the subsequent strike at Specialty Metals for superalloys in 2022, have raged havoc on the supply chain.
Raw material lead times have been increasing for a number of reasons, including:
- The COVID-19 pandemic: The pandemic has disrupted supply chains around the world, causing delays in the production and transportation of raw materials.
- The war in Ukraine: The war has disrupted the supply of raw materials from Russia and Ukraine, two major producers of commodities such as wheat, corn, and metals.
- The increasing demand for raw materials: The global economy is growing, and this is increasing the demand for raw materials.
- The shortage of skilled labor: There is a shortage of skilled labor in many industries, including the mining and manufacturing industries, which are essential for the production of raw materials.
- The rising cost of energy: The cost of energy has been rising, which is increasing the cost of producing raw materials.
These factors have all contributed to the increase in raw material lead times. It is likely that lead times will remain high for some time, as it will take time to address the underlying causes of the shortage.
In addition to the factors mentioned above, there are also some specific challenges that are facing the raw material industry. These include:
- The increasing complexity of supply chains: The global supply chain is becoming increasingly complex, making it more difficult to track and manage the flow of raw materials.
- The increasing volatility of commodity prices: Commodity prices are becoming increasingly volatile, making it difficult to predict the cost of raw materials.
- The increasing risk of environmental regulations: Environmental regulations are becoming increasingly strict, which is making it more expensive to produce raw materials.
These challenges are making it difficult for the raw material industry to meet the growing demand for raw materials. This is leading to the increased lead times that we are seeing today.
Here are some of the things that can be done to address the problem of long raw material lead times:
- Weather the storm: By working with suppliers to improve communication, companies can better understand the risks and challenges in the supply chain and make better decisions about how to manage them. Join growing networks like the Metals Militia discord to connect with key distributors and customers in need of illusive alloys. Check out this latest offer: https://launchpass.com/metals-militia/offer
- Invest in new technologies and new capabilities overseas: Check out mills in India, China, and Australia.
- Diversify supply chains: By diversifying supply chains, companies can reduce their reliance on any one supplier and make it more difficult for disruptions to occur.
- Build up inventories: By building up inventories, companies can reduce the impact of short-term disruptions.
- Be prepared to adapt: The global economy is constantly changing, so companies need to be prepared to adapt to new challenges and opportunities. This includes being willing to change suppliers, production methods, and even business models if necessary.
By taking these steps, companies can help to reduce the impact of long raw material lead times and ensure that they have the materials they need to meet demand.
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