As Q2 of 2024 draws to a close, we consider the factors which may impact supply chain management in the sheet metal industry over the coming months. Of course, geopolitical issues continue to cause disruption and pose challenges and inflation remains a significant consideration. However, we also consider the beneficial impact that technological advances could have on the industry. Meanwhile, here in the UK, we’re faced with a likely change in political administration which will also undoubtedly, in time, have an impact on those other factors.

We review the MHI Annual Industry Report 2024 to identify the biggest challenges reported by supply chain managers. Although this report is American-based, supply chains are global, and many of the same issues and challenges are encountered by supply chain managers worldwide.

 

Key Trends Impacting the Supply Chain

In the MHI Annual Industry Report 2024, 51% of survey respondents identified supply chain agility and resiliency as a top operational trend, highlighting the need for companies to adopt flexible strategies to manage market disruptions

In recent years the government has produced frameworks to help companies form a reliant supply chain focusing on diversification, international partnerships, stockpiling and surge capacity, onshoring and demand management.

Other trends could influence supply chain strategies, notably the adoption of AI (artificial intelligence) which is revolutionising the management of the supply chain.

The metal manufacturing industry in particular deals with various challenges and disruptions, such as geopolitical tensions and uncertainties surrounding trade policies. Along with these concerns, inflation and over-escalating costs add to the complexity of supply chain management.

 

The Influence of Technology

The MHI Annual Industry Report 2024 found that 85% of supply chain leaders anticipate integrating AI and IoT (Internet of Things) technologies within the next five years. These integrations could take the form of real-time tracking and monitoring of goods, AI-driven decision-making process, or even driverless vehicles. The outcomes of such tools could include navigating market disruptions and optimising costs.

Despite apprehensions regarding job displacement, reports reveal an optimistic outlook: 60% of supply chain leaders anticipate that AI will create more jobs than it eliminates. This shows the potential of technology in not only enhancing supply chain functions but also creating new opportunities.

 

Supply Chain Challenges and Disruptions

Disruptions to the supply chain such as Brexit, geopolitical tensions and political uncertainty have caused delays in delivery. 83% of UK businesses fear the biggest disruption from Brexit is yet to come, with Brexit already being the largest disruptor for British manufacturers.

Ongoing geopolitical tensions in Ukraine and the Israel-Palestine conflict further complicate the global supply chains, as boycotts and sanctions obstruct trade. Political uncertainty is also hindering supply chains, making it difficult to predict the impact on trade deals among potential major changes in government.

As the UK Prime Minister Rishi Sunak MP announced the general election will be held on 4 July 2024, numerous manufacturers have demanded a dedicated Supply Chain Minister from the next government to drive economic growth.

The manufacturing sector could see trends shifting further in Q3 2024, influenced by the UK general election, particularly in terms of trade agreements and tariffs. Trends may include shifts in trade policies, which can impact the import and export of goods and, in turn, cause an increase in the costs of raw materials and limit access to key markets.

 

The Impact of Inflation

Inflation remains a significant concern for supply chain managers, as highlighted in the MHI Annual Industry Report 2024. According to the report, 53% of surveyed supply chain managers indicated that rising inflationary costs are substantially impacting the supply chain, leading to increased worries about overall cost management and operational efficiency. This trend is particularly evident in the metal manufacturing sectors, where the costs of raw materials, energy, labour, and transportation are all on the rise, squeezing profit margins and challenging companies to find effective cost mitigation strategies.

 

Building A Resilient Metal Supply Chain

ADS Laser Cutting remains dedicated to proactive supply chain management solutions. Partnering with us means gaining access to real-time data and market insights, helping you to make informed and strategic decisions for your business.

 

 

ADS Laser Cutting is the Premier Metal Laser Cutting, Folding, Fabrication, Finishing and Assembly in the UK. Providing Bespoke to Volume Solutions.

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