Top 5 Product Shortages for 2022 Supply Chains
Believe it or not, we are quickly approaching an upcoming anniversary that will mark two years since the onset of the COVID-19 pandemic. As hard as it may be to wrap our minds around this, there are some stark similarities in today’s supply chain as there were in the early days of the global epidemic. In the beginning, supermarket isles were left bear and toilet paper was out of stock on a regular basis as a result of the initial shockwaves and panic-buying. Now, no longer amateurs, but rather professionals in the post-shock world, there is less panic, but there are still shortages in the supply chain.
Supply chains typically don’t get much recognition, but due to growing demand, order delays, and bare shelves, they have grown to be quite the buzzword among consumer vernacular and for better or worse, they have obtained a national spotlight. Unfortunately, the disruptions that began just under two years ago show promises or persistence well into 2022.
Here are some of the most prominent product shortages that have prevailed throughout the pandemic and are forecasted to linger.
1. Semiconductors
The ongoing global chip shortage has impacted and hurt the production of many companies accross various industries such as automobile manufacturing, consumer technology, household appliances, and more. According to a Deloitte report, semiconductor shortages the past two years are expected to have resulted in revenue misses of more than $500 billion worldwide for suppliers and customers.
Because of the ongoing shortage and looming uncertainty, some companies are acting by bringing production and development in-house. This is mostly seen in tech giants like Apple, Amazon, Meta, Tesla, etc. Analysts claim that they are not expecting 2023 to be in supply shortage, but until then skyrocketing demand for semiconductors is likely to strain supply chains for the foreseeable future.
2. Aluminum
Consumer packaging and construction industries alike have struggled to secure aluminum for raw materials. Demand for aluminum has climbed significantly in the last decade which has posed many challenges given the fact that during the same time, China and Europe have cracked down on their carbon footprint and energy usage.
Curtailing production has exacerbated global supply chains and forced manufacturers who are capacity constrained to take matters into their own hands by accelerating investments to free up capacity and drive production.
3. Food
You may have noticed if you have gone food shopping in the last month that perhaps not all of the shelves are empty, but stock in general has been touch and go. As new variants permeate populations, labor forces and crop harvests have been under a tight squeeze with severe disruptions to the supply chain making it difficult to forecast inventory and meet demand.
There are also shortages in crop nutrients like fertilizers and pesticides which curb crop yields. The less nutrients that crop producers have, the smaller the yield. The supply chain will continue to be spotty until demand for fertilizers and pesticides is fulfilled.
4. Plastic
Similar to the semiconductor shortage, it didn’t happen all at once, but rather over time. Pandemic conditions, productivity restrictions, and severe weather conditions created the perfect storm for manufacturing. Manufacturers pivoted to a stockpile approach to proactively accumulate material and ease the strain on supply for 2022; however, growing demand coupled with import taxes will maintain market volatility.
5. Building Materials
Construction is known for it’s notoriously complex supply chain, but material shortages have raised cause for further constraints and exacerbated lead times. Lumber, paint, glass, metals, and concrete are some of the materials that are expected to be in flux for 2022.
Surging demand from new homeowners and home improvement projects that took shape amidst global lockdown has added more pressure to a supply chain that is already feeling a pinch. In combination with lengthening lead times and labor constraints, many construction companies are taking a second look at their inventory management strategy and switching to alternative materials to manage fulfillment.