Raw Material Inflation And Global Supply Chain Challenges Are Driving Global Price Increase

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Companies and suppliers are dealing with an unprecedented number of hurdles to meet increasing demand amid global pressure on supply chains. Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee said, “All segments of the manufacturing economy are impacted by record-long raw materials lead times, continued shortages of critical materials, rising commodities prices, and difficulties in transporting products. In addition, global pandemic-related issues — worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems — continue to limit manufacturing growth potential.”

Companies That Have Announced Price Increase

Haas Automation Price Increase Coming 1 December 2021

Due to the rising costs of materials, logistics, and labour, Haas Automation will be raising their prices on 1 December 2021. The company recognises its impact on its customers. It provides a timely notice to allow its customers to make any purchases before the increase.

Birla Carbon’s Specialty Blacks Business to Increase Prices Globally

Birla Carbon, a global manufacturer of carbon black, announced a global price increase for all its Specialty Blacks products effective 1 December 2021. The price increase is due to steady rise in raw material costs and increased costs for freight, logistics, and overall operations.

DuPont Mobility & Materials Increase Prices From 1 October 2021

Chemical and material manufacturer DuPont Mobility & Materials, which supplies tyremakers around the world, has announced sweeping prices increases globally. The price increases take effect from 1 October 2021 “or as soon as contracts allow.”

Lori Koch, the chief financial officer of DuPont said, “As our third quarter results demonstrate, the demand across our end-markets is strong, and we are successfully executing against a backdrop of raw material inflation and global supply chain challenges. We moved quickly to implement strategic price increases in response to rising raw material costs, and we will continue these actions in the fourth quarter to deliver neutral price/cost for the year.”

U.S. Silica Announces Price Increases On Industrial And Specialty Products

U.S. Silica Holdings, Inc. increased prices for its Industrial and Specialty Products business ranging up to 15 percent for most of its non-contracted silica sand, diatomaceous earth, and clay products used primarily in glass, foundry, paints, coatings, elastomers, roofing, chemicals, recreation, building products, agricultural, pet litter, and other applications.

The price increase depends on the product and grade, which went into effect for shipments on 1 September 2021 to offset significant cost increases in energy, transportation, materials, and manufacturing costs.

How Can Manufacturers Tackle Price Increase Challenge To Remain Sustainable?

According to RS Components, globally, more automotive manufacturers are adopting a circular economy model to increase productivity and innovation.

Syed Suroor Anwar, Vice President, Strategy and Commercial, Asia Pacific at RS Components said, “On a global stage, research shows that many experts believe it is ahead of other industries in driving global sustainability and adopting sustainable practices. Globally, more automotive manufacturers are adopting a circular economy model, and more in Asia are following suit.”

“We’re already beginning to see manufacturers benefit from the shift in Asia. India, for example, is honing in on an end-of-chain approach and has implemented a scrappage policy to push more manufacturers to maximise the lifespan of End-of-Life vehicle (ELV) components and resources. By recycling, reusing, or recovering these components, more manufacturers can benefit from lower material costs while reducing the impact on the environment. Implementing the policy will also provide consumers with more cost-friendly and sustainable vehicle options, which have become more popular over the last couple of months.”

“Shifting to a circular economy model is not a one-time deal. It requires long-term commitment and investments. Manufacturers must regularly monitor and manage their supply chains and operations to close the loop and reduce supply chain risks.”

Read more about the circular economy insight by RS Components here.

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Featured photo created by evening_tao.

 

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