Shortages will impact supply chains ‘for years’

Global supply chain resilience has plunged over the last year, with the Ukraine conflict set to make matters still worse warns a key market report.

The annual Achilles Global Supply Chain Resilience Index showed that the index score for the last quarter of 2021 was under 45 points.

A level of 40 points marks the crucial high-risk threshold and the calculations largely pre-dated the first indications of the Russia-Ukraine conflict.

This has produced growing concern over the likelihood of additional material shortages that will take the index score below the 40 mark when the first quarter of 2022 is completed at the end of March.

Report author, Achilles chief product officer Katie Tamblin’ commented that data emerging from Q4 2021 was already indicating that 2022 would be a rocky road for global supply chains. With the additional conflict in Ukraine, the outlook was extremely concerning.

“The Achilles Supply Chain Resilience Index (ASCRI) has, throughout the whole of 2021, flagged commodity prices and energy supply as bellwethers for global supply chains,” said Tamblin.

“Pummelled by so many challenges over the last two years, supply chains have not had time to recover, and we now face a critical tipping point that could have both supply and cost ramifications rippling through industrial and consumer markets for years to come.“

She added that data demonstrated that, to weather the crisis, organisations needed visibility across their supply chains to identify vulnerabilities and alternative sources of supply.

Shortage of tin and molybdenum – a trace mineral used in energy creation – and other materials such as nickel, zinc, copper, oil and gas, will likely impact downstream global supply chains says Achilles.

It warned too that a scarcity of lithium, essential to the production of batteries for electric vehicles and electrical storage, could result in 20 million electric vehicles taken out of production between 2022 and 2029.

PhotoWhile firms such as Mersen on Teesside are well stocked, some companies fear supply chain limitations