What Are The Top Supply Chain Shortages?
Contributed by AFFLINK
On Oct. 12, 2021, the International Monetary Fund reported that the U.S. economy should grow by six percent in 2021. While this is down from earlier predictions, it is double — if not triple — the traditional growth pattern of the U.S. economy.
One key reason for the downgrading is something unexpected: a possible global supply chain “collapse.”
“Yes, that’s what some people are calling it,” says Michael Wilson, vice president of marketing for AFFLINK, a sales and marketing organization for distributors throughout the country.
“There is potential for a supply chain collapse due to worker shortages, lack of raw materials, and an array of pandemic-related issues such as quarantines, inconsistent global COVID vaccination and testing requirements, blockades, bottlenecks, and tariffs.”
Consumers, according to Wilson, can expect some food-related shortages. These include shortages of certain juice products, bottled water, bread, “Lunchables” pre-made lunch and snack items, and turkeys. “Plus, toilet paper may be in short supply again, at least for a few months,” adds Wilson.
Regarding the impact of the supply chain collapse on businesses, Wilson identifies several items that could be affected:
Computer chips. The chip/semiconductor shortage is a problem because virtually everything businesses use today has a computerized component.
Steel. The steel industry did not expect a sudden economic rebound. Many plants closed last year. Now they are having trouble re-starting, getting necessary supplies, and finding workers.
Fuel. Supply chain interruptions are likely to be one reason for recent increased fuel costs.
Metals. As more businesses switch to green energy, there are shortages in rare earth elements as well as copper, lithium, nickel, and cobalt.
Plastics. Plastic is used in virtually all industry sectors. A shortage of plastic in one sector can slow down production in another, creating a ripple effect that adds to supply chain disruptions.
“Distributors will likely experience supply chain issues for another couple of years,” adds Wilson. His advice?
“To keep clients happy, stay ahead of the game. Know what items may be in short supply down the road and let your customers know about these [shortages] as soon as possible.”