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Feb 13, 2023

Raw Material Supply Remains Under Pressure

Raw materials availability, transportation and logistics, and labour are the three biggest factors in supply chain distribution, says Jeff Curler, Orgill’s executive vice-president, purchasing. He told the ‘Supply Chain Update’ at its Spring Dealer Show, that there is still some pressure on raw material supply with competition for plastics (resins), wood, metals, paper (packaging), and semiconductors resulting in higher pricing, although lower pricing is starting to be seen. With transportation and logistics, he said the U.S. needs 80,000 driver. This is causing inconsistent lead times with 50 per cent of orders arriving late to its distribution centres. Transportation costs are still higher. Fuel costs, for example, have decreased 72 per cent from last year, but are still double what they were in 2019. Finally, there are labour shortages affecting manufacturing and distribution. In fact, in 2021, 14 per cent of all Americans quit their jobs. Despite these challenges, Orgill’s fill rates rose 9.6 percentage points during 2022. This was achieved by being completely transparent with the latest information on supply chain setbacks and improvement shared internally with its sales teams to better serve its customers.

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