How to Keep Plastic Injection Molding above the Conflict
Current global conditions have plastic injection molding in conflict with securing resources.
Ok, we don’t want to beat a dead horse…I mean why would anyone want to do that? Yuck…but the supply chain subject keeps rearing its ugly head; it just won’t go away. Even more recently, those subjects are starting to overlap without much finality from the prior. Our everyday conveniences are being uprooted by supply chain shortages, logistic delays, and price increases. Postponing family trips, reconsiderations to personal budgets, and trying to respond proactively to the ever-changing tide seems to be the new norm.
In the manufacturing world, we feel it too.
Last year, we discussed the occurrences of 2020 and 2021 in our June blog, The Perfect Storm, and how Metro Plastics was able to proactively manage the supply chain issues; but now we have the Russia/Ukraine situation adding another layer of distress. What does this mean for plastic injection molding and what are we doing to continue to provide seamless service to our customers?
First, let’s review the facts, shall we…
We started off with the infestation of the novel coronavirus in early 2020 acting as a catalyst that brought labor shortages, plant shut-downs, low demand, and logistic breakdowns resulting in major turnaround delays. The fallout from COVID-induced economics, one might say, continues to impact the flow and sequence of supply and resource access today.
What was next? Oh, that’s right, there was not one but two hurricanes along the Gulf Coast causing factory outages and disruptions to manufacturing that dragged on for months. Then, Texas experienced a late winter storm that resulted in unprecedented infrastructure damage and US ethylene production shut-downs. One of our suppliers for polypropylene, a staple in the plastic injection molding world, is located in Texas…eek! Not to be outdone by mother nature, a massive container ship wedged itself in the Suez Canal that resulted in even more delay and back up in the ocean shipping lanes and subsequent supply channels. Icing for your cake, anyone?! Locusts, who had locusts in the office pool for mid-2022? Ok, not actual locusts, but we do now have a war to add to the global economic conditions.
So, we consulted trusted sources, and this is what we are hearing about the current conflict and conditions:
Consumer inflation jumped nearly 8% in February over last year—the sharpest spike since 1982, the Labor Department reported Thursday, citing a report that didn’t include the oil and gas-price surges following Russia’s invasion of Ukraine. ~Fortune Magazine
Rising gas prices are mainly a result of severe sanctions by the U.S and its allies that have effectively taken Russian oil off the market. The move has led to the sixth-largest disruption in oil supply since World War II, according to strategists at Goldman Sachs Research.
While the U.S. purchased only 3.3% of its crude oil from Russia in 2021 and around 7% of its total petroleum products in 2020, oil is ultimately priced by the highly interconnected global commodities market. That means rising oil prices are reflected at the pump worldwide, not just in countries that import Russian energy. ~US Energy Information Administration
Russia was the world’s largest oil product exporter in 2021, according to the International Energy Agency, pumping out roughly 5 million barrels of crude each day. ~Fortune Magazine
Why do we care so much about crude oil? It is the main source from which plastics are derived. Click on the chart below to expand it. What affects crude oil pricing also affects the manufacture of plastic goods.
With such heavy facts, it can be a struggle to find the good in this situation. It makes you wonder how more manufacturers aren’t having to close their doors and lay off employees. They could be using practices like us at Metro Plastics that function out of a place of global awareness and readiness.
Here’s how we tackle the unpredictable economic climate:
- Forecasting – Per the usual, we utilize our customer-provided forecasts when ordering material. Recently, we have been placing larger orders than normal in hopes our suppliers will respond to our need quickly and put us ahead of lead times. This has helped us procure material and keep stock internally.
- Alternative Material Options – Being a custom molder, our projects tend to be customer-specified down to the last detail. However, Metro’s engineering department has been working diligently with current customers on adapting alternative materials to not box ourselves in one corner with limited supply. We can procure the alternate material, provide quality inspections with the new material, and once approved, manufacture the parts without much delay in production.
- Relationship Building – None of the above would be as successful as it is without the intentional care Metro puts into maintaining relationships. At the center of our success is people. Not machines; not robotics; not computers…it’s people. It is through supplier relationships that our procurement team can secure material allocations with little hassle. And it is through customer relationships that our engineering and quality teams can suggest alternative solutions with confidence. Our customers trust where we lead them and are open to our feedback knowing that it comes from a place of compassion and integrity for their business.
The global economy is still unpredictable. How we respond reflects how we are able to overcome the uncertainty. Do we remain reactive to forces outside of our control, or do we take proactive measures in areas that we can control to ensure success for our customers? If you are in the market for a plastic injection molding company who can offer you security during the worst of times, reach out to our experience staff. We can help change the climate of your project. Click here to contact Metro.