Shortages set to ‘wreak havoc’ on supply chains for years

1 min read

A new risk report has suggested that the global economy faces a prolonged period of material shortages and price rises, with the conflict in Ukraine adding to supply chain pressures.

The Achilles Supply Chain Resilience Index suggests that commodity prices will experience considerable volatility over the coming months – oil and gas prices have already soared because of the Russian attack on Ukraine – while semiconductor shortages are expected to continue well into 2023.

The Index for the period October – December 2021 indicated a score of 44.9 and it is expected to hit the 40% high-risk threshold by the end of March.

Raw materials such as tin; molybdenum, a mineral used in energy creation, defence products, and electric vehicles; and other materials such as nickel, zinc, copper, oil and gas are all expected to see supply chain disruption. The scarcity of lithium, for example, could see upwards of 20 million electric vehicles taken out of production between 2022 and 2029.

According to Katie Tamblin, author of the report and Chief Product Officer at Achilles, “Supply chain data emerging from Q4 2021 was already indicating that 2022 would be a rocky road for global supply chains, and now with the conflict in Ukraine, the outlook is extremely concerning.”

Tambilin said that supply and cost ramifications are now rippling through industrial and consumer markets and that is expected to continue for some time.

Consequently, organisations need to ensure they have much better visibility of their supply chains so as to identify any vulnerabilities as well as alternative sources of supply.