There is a good article by Loyd Graff on Machining World.com, “Lean to Excess” in which he discusses the impact of the electronic chip shortage on the auto industry.( https://todaysmachiningworld.com/ford-chip-shortage-lean/ ) He questions running “lean” inventory on supply chain. His point is valid in the current machining and fabrication environment.
The current shortages are generally due to the Covid pandemic. Metal prices have increased any where from 50 to 200%. While the pandemic related shortage may be a factor, overall inflation is rearing it’s ugly head. This indicates that the current rise may not be all caused by the current shortages.
Retail businesses have increased their wages to attract workers; raising their costs. These costs are being passed to consumers. Some of these consumers are employees of manufacturing and related businesses. These employees will want higher wages to maintain their living standard. This will increase the cost in the manufacturing and products.
Higher inventories may delay cost impacts on materials. Companies may consider evaluating parts and materials to decide whether inventory levels should be increased. Networking with suppliers and increasing suppliers may also reduce cost increases. Cost tracking system are essential to identify increased costs.
Keddie Enterprises, a full service machine and fabrication company, works with its customers to control costs and provide quality products. We utilize multiple suppliers for all purchases, adjusting inventory and use bidding on commodity purchases in our supply chain
. We work with our suppliers and adjust inventories to minimize cost increase to our customers. If your supplier is not doing this, please contact us.