Could Raw Material Supply Shortages Slow Down the Economic Recovery?

AUSTIN, Texas - July 27, 2021 - PRLog -- Back in February, we first wrote about the shortage of computer chips bedeviling the automobile manufacturing industry – at the time, we dubbed it the "chip-pocalypse."

But soon afterward, we began to hear from supply chain managers that, yes, while chips were indeed in critically short supply, the bigger story was that, in the words of one manufacturing exec in the Midwest, "chips were an easy scapegoat – it's not just chips, everything in the supply chain is jammed up now."

So what are the main reasons that many raw materials are in short supply, and when will things return to normal?

We decided to focus on what is happening with material supplies in our industry, furniture manufacturing, to see what is going on and how supplies might ease up in the coming months.

But first, here is a useful tip: if you are contemplating a new order, talk to your Formaspace Design Consultant now about placing your order earlier than usual to avoid the impact of longer lead times for some materials. And if you are flexible on material choices, your Design Consultant can also advise you on which material options have shorter lead times.

Steel And Other Metal Raw Materials

Here at our factory headquarters in Austin, Texas, we use a lot of carbon steel to fabricate the famous heavy-duty frames found in all Formaspace workbenches, tables, workstations, and desks.

We also source a lot of stainless steel for making furniture destined for settings such as cleanrooms, laboratories, as well as hospitality settings, such as food service kitchens.

As part of our Made-in-America manufacturing philosophy, we use locally sourced steel and other metals, which gives us a significant lead time advantage over other manufacturers that are reliant on overseas metal suppliers.

Nonetheless, there is increasing pressure on steel and other metal supply chains overall due to production cutbacks during the pandemic, which let inventory levels fall off significantly.

As a result, many steel mills and aluminum foundries and mills – especially those in overseas locations where vaccination rates are still very low – are struggling to reboot production levels to keep up with rapidly increasing demand.

US tariffs on foreign steel and metal imports, first introduced by the Trump administration to encourage American steel manufacturing, are still in place. The tariffs have given domestic metal manufacturers increased pricing power.

Read more...https://formaspace.com/articles/industrial/raw-material-s...