We have talked about the difficulties involved in gaining visibility on contracts received and also those linked to identifying valid and reliable suppliers. The other major problem that we have been experiencing very recently concerns the procurement of raw materials. Steel, for example. There are certain types of semi-finished steel products that actually require 45 working days for delivery.
Some materials simply cannot be found. Others are not available in small diameters (which are, in fact, those used for the processing operations performed at MICROingranaggi).
So production is generally increasing and, similarly, so is the difficulty in finding raw materials, creating another major obstacle in the supply chain. The natural consequence, as you can well imagine, is that delivery times are further extended.
It must be said, and this is the reality, that part of the difficulty depends precisely on the specific nature of the components we produce at MICROingranaggi. Due to the fact that that the pieces are small, we often need to buy smaller quantities of material. Businesses, conversely, that need to purchase large pieces, approach producers directly, experiencing, paradoxically, less difficulty in finding the required supplies.
Companies such as ourselves that need smaller quantities of raw material are obliged to use retailers, consequently being limited to the goods currently being held in stock.
This means that when a more specific material is required, the difficulty of finding it increases as this search might also necessitate the involvement of other suppliers with all the ensuing consequences: who do I use? Is it a reliable company that can supply me in the correct timeframe? And so on.
Needless to say that – for those companies in situations similar to ours – purchasing larger quantities of material in advance is a gamble, simply because having visibility on incoming orders (and therefore on the materials and diameters needed) is increasingly complex.
The result? The result is that, in some cases (for now still sporadic) we have unfortunately been forced to warn our customers to consider lead times of four or even five months. And sometimes it is also difficult to understand why this situation is occurring.
To address at least part of this problem, on the one hand, we are trying
to pay more attention at the design phase to the choice of material, opting – where possible – for the more standard types to avoid the occurrence of delays due to the procurement of raw materials.
On the other hand, we are trying at least to ask our larger, consolidated customers for greater planning on future orders so that we can organise ourselves better. But this second route, unfortunately, is not producing the anticipated results.
Needless to say, this entire situation requires much expenditure of energy, due to ongoing discussions, which unfortunately in some cases also results in damaging certain relationships with customers.