5 Industries Feeling the Strain of Supply Chain Delays
More than two years after the COVID-19 pandemic first disrupted the global supply chain, businesses around the world continue to feel the effects of supply chain delays. A wide variety of industries are impacted by these supply chain disruptions.
Experts predict that delays are likely to continue well into the future, meaning affected businesses should prepare to adapt to ongoing supply chain challenges.
1. Bars and Restaurants
While demand for bars and restaurants is on track to recover from pandemic lows, the restaurant industry faces several new challenges, including a difficult labor market and ongoing supply chain challenges.
Restaurant owners are struggling to source essential kitchen equipment and replacement parts as well as disposable items like cups, plastic straws, and to-go containers. Crucial kitchen appliances, like ovens, have become “almost impossible” to source. When owners can source these appliances, they regularly face wait times of six months or more.
Existing and emerging gaps in the global food supply chain have also been causing problems for restaurants around the country. Meat shortages are likely to impact restaurants, along with grocery retailers and consumers, in mid-to-late 2022, along with shortages of dairy products and eggs. Other ingredients that may be in short supply include plant-based proteins, fruits, vegetables, and canned foods.
Experts have also predicted a potential alcohol shortage to strike sometime in 2022, though a similar shortage predicted for 2021 failed to materialize.
Relief for restaurant owners and the food supply chain could be coming soon. In early June, the USDA announced a new framework for “transforming the food supply chain to be fairer, more competitive (and) more resilient.”
Under the framework, the USDA aims to improve food access for rural communities, strengthen the U.S. food supply chain, and make nutritious food more widely available to consumers. The framework is part of the Biden Administration’s larger effort to strengthen critical American supply chains.
2. Aviation and Air Travel
Global air travel is rebounding from lows hit during the pandemic, but there are signs that supply chain disruptions could slow the industry’s recovery even as demand rises above pre-pandemic levels.
Aerospace manufacturers are struggling to ramp up production to meet the aviation industry’s growing demand for planes and plane parts. Manufacturers are also struggling with a variety of supply chain disruptions that have hampered their ability to spin up new production.
Essential airplane components of all kinds may be impacted – from engine components to fire extinguisher cartridges and other key airplane safety equipment – pushing manufacturers to stock up on important components sooner rather than later.
Airlines appear to already be struggling with these supply chain delays. Boeing, for example, has been forced to delay deliveries of the company’s 787 Dreamliners by at least a year, according to Emirates Airlines.
Airbus is similarly delaying the delivery of new planes, a move that forced Canadian airline Air Transit to lease planes short-term to ensure the company can fulfill its summer schedule.
As with most other industries facing supply chain disruptions right now, aerospace manufacturers appear uncertain as to when the sector will be able to meet the growing demands of their customers.
3. Electronics Manufacturing
Semiconductor chips are one of the most important components in a variety of electronics. They’re also essential for any product that needs on-board computers to function correctly, like cars.
For the past two years, electronics manufacturers, automakers, and related businesses have been struggling with a steadily worsening chip shortage, as COVID-19, raw material costs, and a tight labor market have pushed chip manufacturers to increase lead times and raise chip prices.
The result has been serious downstream production delays and price increases in a variety of sectors. Production of new cars, for example, remained below 2019 levels in 2021 despite high demand for new cars both in America and around the world. Manufacturers primarily blamed the chip shortage for the production slowdown.
Some manufacturers have been forced to strip features and car systems from new cars to reduce the number of chips needed for each vehicle.
Other product categories that are likely to struggle with the chip shortage include smartphones, data center hardware, video games, LEDs, and renewable energy equipment (like solar panels). Chipmakers say they are struggling with rising raw material prices and a tough labor market.
Until these manufacturers feel more confident in the state of the market, price increases and chip delays will likely continue. In the meantime, consumers and businesses that rely on electronics and semiconductor chips should prepare for rising electronics prices and production delays.
4. Construction and Building Services
Construction starts are up for both residential and commercial building projects, but shortages of key raw materials and building components could slow the construction industry’s recovery from COVID-19.
Lumber, for example, is commonly cited as being in short supply. Steel, electrical supplies, copper wire, and lighting supplies shortages are also likely contributing to construction project delays and cancellations.
In addition to the construction industry, a wide variety of building services industries are also feeling the effect of supply chain delays and production slowdowns.
The roofing industry is reportedly struggling with shortages of key components – including semiconductor chips – as well as important raw materials, like methylene diphenyl diisocyanate (MDI), a chemical essential for the manufacture of roofing insulation.
Industry leaders cite the labor market, port congestion, the 2021 North American winter storm, and COVID-19 as the top reasons for roofing’s current supply chain issues.
HVAC contractors along with plumbers, electricians, and renovators forecast similar shortages that may lead to project delays and price increases.
Supply chain disruptions are impacting the performance of hotels around the world. Most hotels depend on a complex supply chain that enables the procurement of a variety of goods needed for daily operations, from cleaning supplies to foods and beverages to new linens. Supply chain slowdowns are making it much harder for managers to source and secure these essential hotel goods.
Hotels may also struggle with shortages of essential appliances and equipment components – like microwaves, televisions, and laundry machine parts – so long as supply chain disruptions remain a major challenge for the world.
How Current Supply Chain Issues May End
Experts aren’t sure yet when the supply chain issues faced by these industries may resolve themselves. Most current forecasts are conservative, predicting a return to normal to begin towards the end of 2022 or the beginning of 2023 at the earliest.
In any case, consumers and businesses should prepare for the supply chain slowdown to remain a problem well into the future. Price and lead time increases will likely continue through the end of this year and potentially into 2023.
About The Author
Emily Newton is an industrial journalist. As Editor-in-Chief of Revolutionized, she regularly covers how technology is changing the industry.