Resilience in Supply Chain Facing Raw Material Shortages

What are raw material shortages?

Raw material shortages occur when the availability of essential inputs can no longer meet industrial demand. Unlike short-term supply disruptions, these shortages have become structural, affecting multiple sectors simultaneously and lasting far longer than initially expected.

Following the pandemic, shortages first appeared in steel and copper, then spread to timber, non-ferrous metals, plastics, polyurethane, and polystyrene. More recently, highly technical components such as microchips and silicon-based elements have also been impacted. As a result, manufacturers across industries are facing limited access to materials, soaring prices, and increasing uncertainty .

Beyond availability, the most critical issue is no longer price alone, but unpredictable lead times, which directly threaten production continuity and customer commitments.

Why raw material shortages are increasing

Post-pandemic demand rebound

After the initial collapse in demand during the pandemic, industrial activity rebounded faster than expected. Many upstream players lacked the visibility needed to anticipate this recovery, creating a sharp mismatch between supply and demand. In metallurgy, for example, steel production capacity struggled to keep pace, leading to delivery delays of 10 to 17 weeks beyond normal lead times .

Geopolitical and trade disruptions

Global supply chains rely on highly interconnected international networks. When production slows or shifts geographically, the effects ripple across industries. In the automotive sector, semiconductor manufacturers redirected capacity toward consumer electronics during lockdowns, leaving carmakers exposed when demand returned, resulting in widespread production slowdowns .

Energy, transportation, and climate pressure

Energy constraints, extreme weather events, and transportation disruptions have amplified material scarcity. Severe cold weather in the southern United States halted resin production, while flooding in Europe disrupted river transport, directly impacting the availability of plastics and chemicals. These disruptions triggered artificial price surges driven by fear of shortages, even before volumes fully recovered .

Supplier concentration and upstream dependency

Many industries depend on a limited number of suppliers for critical materials. When disruptions occur upstream, manufacturers have little flexibility. This lack of diversification, combined with Just-in-Time practices, has significantly increased vulnerability across extended supply chains.

How raw material shortages impact Supply Chain resilience

Raw material shortages expose structural weaknesses in supply chains. As materials become scarce, companies face price inflation of 20–50%, unpredictable lead times, and mounting pressure to arbitrate between customers, products, or markets .

These disruptions propagate downstream, triggering an unprecedented bullwhip effect. Manufacturers struggle to secure supplies, customers demand more visibility, and uncertainty spreads across the entire ecosystem. In this context, supply chain resilience is no longer about efficiency alone—it is about maintaining operational continuity under sustained volatility.

Without visibility and synchronization, even minor demand fluctuations can destabilize production plans, inventory levels, and service performance.

Why traditional planning fails in times of material scarcity

Traditional planning approaches are ill-suited to environments characterized by high uncertainty. Tools based on static forecasts and downstream signals fail to capture upstream constraints, supplier disruptions, and real lead-time variability.

The crisis has shown that relying solely on Just-in-Time logic and fixed planning parameters increases exposure to shortages. Errors accumulate as forecasts become unreliable, buffers are poorly positioned, and replenishment decisions amplify volatility instead of absorbing it.

What companies lack most is visibility, synchronization, and the ability to adapt plans dynamically when conditions change .

Supply Chain resilience strategies to overcome raw material shortages

The whitepaper highlights several strategic levers to build resilience in the face of material scarcity:

• Improve demand forecast reliability by adopting flexible, AI-driven approaches capable of adapting to volatile environments rather than rigid models that require constant reconfiguration.
• Optimize the supply plan by integrating business constraints, KPIs, and automation to better anticipate shortages and prioritize decisions.
• Increase visibility across the extended supply chain, from factories and warehouses to inventory distribution points, treating each node as part of a synchronized internal network.
• Digitize supplier collaboration, sharing forecasts and orders to improve reliability while avoiding last-minute surprises.
• Enable secure synchronization through a trusted third party, allowing coordination without exposing sensitive data directly to partners .

These strategies shift supply chains from reactive firefighting to proactive resilience.

From shortage management to long-term Supply Chain resilience

Managing shortages in isolation is no longer sufficient. The crisis has made it clear that raw materials must be addressed as a strategic foundation of supply chain resilience, not as an operational afterthought.

Building long-term resilience requires companies to rethink how they forecast demand, position inventory buffers, collaborate with suppliers, and synchronize decisions across their network. This transformation goes beyond tools—it demands a new approach to planning under uncertainty.

Whitepaper: Raw Material Scarcity and Supply Chain Resilience

In this whitepaper, Flowlity explores:

• How raw material shortages emerged and spread across industries
• Why traditional planning models fail under sustained volatility
• How visibility and synchronization reduce the bullwhip effect
• Practical strategies to improve forecast reliability and supply chain resilience

Designed for supply chain leaders, planners, and operations teams, the whitepaper provides a clear framework to move from short-term crisis management to resilient, data-driven supply chain design.

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