The reason?<\/p>\n
The rising cost of raw materials<\/strong>, which today affects a very large number of goods that form the basis of just as many productions. The consequence is a reduction in profit margins for companies, but there are also possible repercussions for consumers.<\/p>\n In particular, an increase in final prices<\/strong> could threaten the recovery of spending.<\/p>\n Wood, plastics, copper, silicon, zinc, but also grain and soya: this is just a short list of raw materials whose prices have skyrocketed over the past 12 months.<\/p>\n For example, the price of copper<\/strong> has increased by 115%<\/strong>, while rhodium<\/strong> – used for electrical connections and catalytic converters – has risen by as much as 447%<\/strong>.<\/p>\n In Italy, more than 80% of metalworking companies<\/strong> have experienced a rise in the prices of raw materials and semi-finished products in recent months, with serious effects on the industry, as reported in the latest economic report<\/a> by Federmeccanica.<\/p>\n In April, construction timber<\/strong> used by the building sector saw increases of between 60 and 70%<\/strong> compared to September last year, as Federlegno<\/a> reported.<\/p>\n In the agri-food sector<\/a>, too, there was no shortage of increases: more specifically, the price of wheat<\/strong> reached peaks of +12%<\/strong> and soya 15%<\/strong>, with impacts on companies producing derivatives such as pasta and baked goods.<\/p>\n Livestock farms are also facing significant difficulties, with animal feed prices<\/a> rising by an average of 6.6%<\/strong> according to analyses in March 2021.<\/p>\n The result, as witnessed by Federalimentare<\/a>, is a drop in revenues for Italian companies in the face of growing production volumes during the first quarter of the year.<\/p>\n Moving into the field of technological applications<\/strong>, microchips<\/strong> remain among the most sought-after but at the same time most difficult to find goods: the surge in demand is pushing the main manufacturers to adjust prices, with inevitable price increases for buyers.<\/p>\n But what are the reasons behind this phenomenon?<\/p>\n The factors are diverse and global in nature: first and foremost, a simultaneous restart<\/strong> of most of the world’s economies.<\/p>\n The reopening of these months and the rise in exports<\/strong> have caused an excess of demand over supply: the need to fill empty warehouses with new stocks has in fact pushed companies in many countries to increase their demand for raw materials in a short time.<\/p>\n The result has been a staggering increase in prices, aggravated by a constant rise in logistics costs<\/strong>.<\/p>\n In particular, as reported by Il Sole 24 Ore<\/a>, maritime container freight rates<\/strong> have increased more than fivefold since June 2019<\/strong>, and during the same period, ship delays<\/strong> have increased due to the blocks that have affected many global ports: most recently that of Yantian in China.<\/p>\n Alongside congested global traffic and rapidly rising production, there is also financial speculation<\/strong> on derivative securities linked to commodities. The latter have become an attractive investment, but this has inevitable consequences for their final price.<\/p>\n How to deal with all this?<\/p>\n The answer is not easy: procurement<\/strong> is now facing challenges that were difficult to predict a few months ago. But continuing to manage your value chain<\/strong> remains a vital objective.<\/p>\n It is undoubtedly a challenging process, but today it remains a must for those who want to remain competitive in an increasingly complex global market.<\/p>\n The key word here could be diversification<\/strong>: reducing dependence on single suppliers<\/strong> and looking to new countries for the supply of raw materials.<\/p>\n In the current scenario, it has in fact become essential to have alternative options available to guarantee the continuity of production<\/strong>: the halt to world trade<\/strong> and the increase in transport costs<\/strong> mentioned above are clear proof of this.<\/p>\n The reorganisation of supply chains could also involve reshoring<\/strong>, i.e. bringing back home certain stages of the procurement and production process: a logic which is not immediately applicable but may become increasingly necessary in the future.<\/p>\n In any case, supply chain management<\/strong> will increasingly have to be based on a careful study of the market: the ability to map out unexplored geographical areas, but above all the ability to select the right partners within them.<\/p>\n Economists expect prices to stabilise over the coming months, but for the moment the picture remains difficult. While the European authorities are trying to respond with long-term projects such as the Raw Materials Alliance<\/strong><\/a> to reduce the EU countries’ dependence on foreign countries, companies are now having to adopt new strategies<\/strong>.<\/p>\n This is a major commitment, which is prompting them to look to new countries and new ways of ensuring their productivity.<\/p>\n <\/p>\n Do you want to learn more about the benefits of AI for your business?<\/p>\n <\/p>\n Request a free pre-analysis!<\/p>\n![\"Supply](\"https:\/\/www.matchplat.com\/wp-content\/uploads\/2021\/06\/supply-chain-2.png\" "\\"Matchplat\\"")
<\/p>\nThe situation: difficulties for all supply chains<\/h3>\n
The causes: restarts, empty warehouses and blocked containers<\/h3>\n
![\"Supply](\"https:\/\/www.matchplat.com\/wp-content\/uploads\/2021\/06\/supply-chain-3.png\" "\\"Matchplat\\"")
<\/p>\nThe solutions: a new organisation for supply chains<\/h3>\n