… And Not Enough: Products Can’t Be Produced If Even One Ingredient or Component is Missing

A lot has been made recently of the supply chain challenges and rapidly shifting demand trends messing with ordering as suppliers and retailers hope have enough, but not too much on hand. Well, in some cases, the outcome ended up being…not enough.

Companies across the economy are finding that they have to limit production in key areas, discontinue brand lines, or close factories either temporarily or permanently. A key example from the last few years has been automobile production facilities idled or with stocks of mostly completed cars on their lot which they can’t ship until they receive that missing part or component. Suppliers can’t sell a product if one ingredient, part, or component is missing:

Sometimes, suppliers can find a new source for that missing part or can find an alternative and keep things moving. But sometimes, they can’t. Here are a few recent examples:

• Pregis announced it would be closing a Kentucky-based plant that made polypropylene sheet foam and eliminate that Microfoam brand product for lack of a key ingredient when no suitable alternative could be found. Microfoam sheets were primarily used for protective packaging applications.
• Packaged food companies – including giants like General Mills, Hostess, Conagra, Beyond Meat, and Mondelez – have been feeling the pressure from supply chain challenges, especially for cooking oils (particularly sunflower oil) and wheat. These companies have reported difficulties in reaching production targets and fulfilling orders. In some cases, other ingredient options exist, but in other cases, the key ingredients must be rationed among the best selling or most profitable items and new releases are delayed.
• Lack of replacement parts needed to maintain aircraft at keeping planes grounded. Lack of pilots, flight crew, maintenance staff, baggage handlers and more aren’t the only problems airlines are dealing with to keep flights running and on time.  

Freedonia analysts continue to watch factors such as stock levels, shifts in consumer demands, evolutions in supply chains, and inflationary trends for direct and indirect effects throughout the economy.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in Construction & Building Products, Consumer Goods markets, and Automotive & Transport industries, as well as Food & Beverage coverage from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.