Are rapidly rising raw material prices and increasing supply shortages catching companies off guard? Our latest study provides insightThe pandemic has had us firmly in its grip for over a year. What impact are companies seeing on their raw material supply and procurement?
What measures have they taken to stabilize their supply chains?
For the 12th time, we examined raw materials management in companies and corporations – across industries and countries – in our June/July 2021 survey in cooperation with trade journal Handelsblatt.
The findings from the survey of almost 100 participants can be downloaded below – along with our recommendations for action – free of charge:
- Rising raw material prices with significant impact on business results: The impact of raw material prices has increased significantly across all commodity groups. 76% expect raw material prices to continue to rise over the next 18 months. Passing on increased raw material costs to customers is seen as the most appropriate way to deal with cost increases.
- Supply shortages lead to continued challenges and costs: 89% of companies experience a significant deterioration in raw material availability. Participants see the highest risk for plastics, aluminum and ferrous metals/steel.
- Changes in pricing agreements with suppliers: Compared to the 2020 study, daily/spot market prices have increased the most as an agreed pricing model with suppliers. The majority sees the time span for fixed prices as (strongly) shortened. Long-term planning capability is declining. Companies have to adapt to short negotiation cycles.
- Pandemic has long-term impact on companies and procurement: 74% of participants expect adjustments in supply chain risk management. About half expect higher inventory levels and increased use of dual/multiple sourcing.