Keys to face the current supply crisis

The rise in energy and fuel prices, the transportation crisis and the supply problems that currently exist are realities that are affecting many companies in our country and that, far from disappearing, threaten to continue to suffocate the markets for a longer period of time. Now, why have we reached this situation and what is it that has caused all this to happen at the same time? Undoubtedly, COVID-19 has marked a before and after in our lives, in every way. While on a personal level many of us have changed our habits, customs and the way we understand day-to-day life, on a business level it has affected many aspects.

Consequences of this crisis

It should be noted that, before the pandemic, the prices of raw materials remained stable within certain parameters, but since then and as a result of it, they have not stopped growing, having multiplied disproportionately in recent times, which has been affected, of course, by the current Russian war in Ukraine. Thus, after a recovery in demand, in 2022 the forecasts pointed to a decrease in costs, but the war has again hit production and, today, many companies are facing serious difficulties to meet the commitments they have with their customers in the short and medium term.

It is important to note that, in addition to the shortage of the main raw materials, we are facing a food supply problem. The uncertainty of this situation has caused a collective hysteria in the population, which has rushed to supermarkets to buy supplies for fear of shortages. This is what has happened with the sunflower oil arriving from Ukraine and why some companies in different sectors, such as the bakery sector, have been so affected.

Another problem that companies are facing right now is transportation. One of the consequences of the pandemic is the lack of movement of sea containers, many of which are stuck in Europe and especially in the United States without being able to move. Much of the world’s trade in goods is carried out via maritime transport and the reduction of ships in shipping lines and the closure of logistics agencies has affected the global supply chain. This translates into higher transport prices and potential shortages due to lack of cargo capacity.

On the other hand, we cannot leave aside the increase in the price of fuel that Spain has been suffering for months and has been aggravated by the invasion of Ukraine by Russia, which has caused serious difficulties for many carriers who cannot meet the expense involved. For this reason, and after suspending the stoppages maintained by the sector, an agreement has been reached with the Government, which will reduce the price of fuel by 20 cents/liter as a measure to fight against this rise.

The lack of raw material, together with the shortage of supplies and the rise in fuel prices, is causing a serious collapse of the market. As a result, companies are forced to raise the price of their products. The increase in the market is reflected in the industries, which are forced to increase their prices to avoid losses and thus be able to continue production. Now, what can be done in the face of this, and what will the coming months be like? It is clear that this situation can either improve in 2022 or, if it continues to increase, it can become a nightmare for companies, especially for those that do not have an exhaustive control of their expenses, suppliers.

How to reduce the impact of the crisis in our company

So how can we reduce the impact that lack of raw materials and logistics problems can have on our company? Is there any kind of solution? Nowadays, it is possible to find specialists in these matters dedicated to improving the financial situation and operational management of these companies. Consultants who try to find the best possible solution to help their clients mitigate the risks and solve the problems in which they could be involved. To do this, it is important to find a consulting firm that works hand in hand with our company, understanding the way it works in order to understand what is done in it and how it is done in order to provide solutions to their problems in the short, medium and long term.

It must be taken into account that some of these solutions involve a short period of time and others are long term, and may even last for months. Everything will depend on the circumstances of each company and its economic capacity. What is clear is that the future is uncertain and for this reason, given the complicated situation we are going through at international level, it is practically essential to have the advice of experts who provide the necessary keys to face it.

Can we help you reduce the impact of the crisis on your company?