It’s no secret that globally, the post-COVID economic recovery has been slowed by the increasing cost of raw materials and the ongoing shipping crisis.
When the bearing industry was assessed a few months ago, Bearing News reported that prices for more than 60 different types of raw material had gone up – with reported increases between 1,480 USD per ton and 21,500 USD per ton. This, combined with the sharp upward trajectory of fuel prices and other variables such as the Suez Canal transit price inflation, has seen many eastern production facilities either actively or passively stop production.
For those still in operation, rising material costs are only the first hurdle. A shortage of workers, missing truck drivers, staffing shortages on container ships and related logistical challenges in ports, plus an imbalance in trade flows, is making transportation of goods across geographies a slow, difficult, and costly process.
What does this mean for our supply chain?
Demand is up, supply is down, which means companies are putting heavier schedule demands on their supplier base, extending lead times even further – way beyond their normal, acceptable levels.
This of course makes planning a challenge, and customer fulfilment a real concern, leaving many manufacturers and distributors facing the dilemma of committing to unusually higher level of stock, despite not having the current demand to warrant such an investment.
This risk/reward strategy of balancing inventory with working capital requires real business stability, and a confidence that few organisations cannot stomach in such a fragile economic landscape.
Those that can risk it are doing so, and it’s driving demand sky high for a supply chain that is already struggling to cope. For those that can’t commit to higher stock levels, the wait for product continues to get longer.
Stock is king and always has been
Right now, stock is king, but for Bowman it always has been. Reinvesting profits and holding substantial inventory in strategic global locations has long been our mantra, and when it comes to economic uncertainty, the effects of political unrest, or even global pandemics, it enables us to weather the storm better than most.
We are on a program of building stocks in multiple locations and are working with strategic partners to ensure we can service the global demand. For split roller bearings in particular, we have some of the highest inventory in the industry right now and can still uphold our standard lead times, in most geographies, across much of our “me too” Enhanced product range, as well as our higher capacity Advanced products, meaning our customers are less affected by the supply shortage.
What action should customers take?
When it comes to switching manufacturers, most customers are risk averse and will stick with their existing supplier no matter what – but this supply shortage is far from over and Bowman may well be able to fulfil your requirements faster with products that could even outperform the ones you are using.
When it comes to taking risks, communication is key. An initial conversation on the phone, a meeting and a physical demonstration can alleviate most concerns.
As a first step, why not call us to find out if we have what you need in stock? There’s a strong chance we do.
Call: +44 (0) 1902 898 560
US customers: 484 800 5362