Here’s a question no one wants to answer: do you remember March 2020? You know the month that lasted a decade, and the whole world was essentially ending? Well, for businesses, as you were all painfully aware, having no ongoing production meant there was no active material sourcing or distributing. Flash forward ten years and fourteen months, and the effects of this are still causing major issues. So today, we are diving into why we have a raw material shortage and how businesses explain their efforts with customers to fulfill orders and services.
In the wake of production setbacks, many businesses have stressed to their customers to be patient and acknowledge the consequences of going through this global pandemic. So let’s look at how we got here:
Why is there a shortage?
Since the world is returning to its former operating practices, many business owners, as well as customers, may be asking, “Why is there still a material shortage?” The world didn’t stop needing these materials just because distributors and manufacturers could not source them. The demand for these supplies just kept growing, and the number of materials collected to meet it was stuck at zero. This increase in demand also birthed a sharp uptick in product pricing and freight shipping problems.
The CEO of Detroit Bikes, Zak Pashak, recently stated in an interview that “COVID had a huge impact on the bike industry. On the one hand, we were filling orders and had to furlough the entire staff, but as that was happening, our online sales exploded… so we sold out of all our inventory, and sales were up 7000% over the past year at one point.”
Think back to last year again, when there was a shortage of Clorox wipes, not just because people bought them in bulk. There was no plastic manufacturing for their containers, and no one could get them once the availability disappeared. So while it’s true that you can buy disinfecting wipes now and businesses can start filling orders again, they’re still working with the available supply of materials for all industries and distributors. As the shortage of materials continues, several markets are examining alternative options for helping the supply chain along.
How are businesses explaining these shortages?
Many people are being kept aware of the specific raw materials facing a shortage. So when they receive news from a business regarding a delay in production or cite a lack of availability, very few customers are caught off guard. ‘There’s no silicone in Silicon Valley!’ That said, not all businesses choose to be open with their customers about why they have a backlog of orders or why something isn’t available.
Letting your customers know you may not complete an order or perform a service is a massive risk with customer service opinions. Some customers may react poorly and demand a refund. In contrast, others will appreciate the transparency and respect your request for patience.
Your decision about letting your customers in on your production efforts and potential obstacles will boil down to whether you believe honesty about the situation is worth the risk in customer perception. Can this problem be resolved in a timeframe that doesn’t deter customer loyalty? With no clear end to the shortages of raw materials and the dwindling ability to access them, your business may be in the weeds for quite some time.
The shortages of raw materials are affecting all industries and countries worldwide differently. Depending on your access to raw materials and connections with distributors, your approach to informing your customers may differ from others. The important thing to remember is that your efforts are ongoing and that you will find a way to continue doing business with your customers.