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Supply Chain Shortages

As economies normalize and capital projects are resuming, we continue to deal with major and persistent shortages in supply chains, shifts in customer expectations, and spikes in prices for goods and services.

In the video below, we explore underlying issues and inflationary pressure - findings from a recent CAPS Research whitepaper, Assessing the Current State of Supply Chain Shortages

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Explore the outlook for different sectors of the economy and for supply managers going forward, as well as government policies on supply-side issuesAssessing the Current State of Supply Chain Shortages is available to everyone in the CAPS Library now.

Video transcript: 

Vaccination rates in the United States and around the world are high and have continued to rise. As a result, economies are returning to pre-pandemic levels and capital projects are resuming. But as things normalize, we are dealing with major and persistent shortages in supply chains, shifts in customer expectations, and spikes in prices for goods and services.

Assessing the Current State of Supply Chain Shortages, a new CAPS report, explores supply chain challenges incited by the pandemic, where changes were most drastic, and what to expect for the future.

The pandemic and a combination of disasters and shortages have contributed to depleted inventory positions across the supply chain, and since then, supply has not met demand. While retail is rebuilding merchandise levels, for example, freight is still delayed at the ports, and transportation capacity remains historically constrained.

Prices for building materials such as steel and lumber have escalated to new heights. Structural steel is extremely costly, but construction of major buildings and warehouses is booming because of high ecommerce activity. And lumber prices have soared due to Canadian lumber tariffs and transportation-related supply shortages, and an increase in demand for home remodeling and new home construction.

Meanwhile, demand for semiconductors is being driven by the increased digitization of ALL things, including electro domestics and industrial goods that used to be inanimate.

Semiconductor lead times have gone from several weeks to several months due to shutdowns or limited capacity in manufacturing. With a shortage of chips comes a shortage of products that need them, most notably vehicles.

Demand for agricultural commodities like soy oil is reaching record highs, as well, causing prices to spike for goods including gasoline, diesel, crude oil, corn, copper, coffee, and others. As a result, grocery manufacturers are seeing shortages and price hikes.

In terms of talent and human capital, demand for labor is rising, but many jobs remain vacant, with a shortage of qualified applicants.

What do the experts think of the future ahead?

  • Interest rates are likely to increase.
  • Leadtimes for major commodities will remain poor for the remainder of the year.
  • Prices will flatten but not drop.
  • Supply and demand equilibrium will not occur until people are back in the 

Dive deeper into current supply chain activities and challenges on the horizon with CAPS. Assessing the Current State of Supply Chain Shortages is available to everyone in the CAPS Library now.

 

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CAPS Research

CAPS Research

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