In this post, we highlight some of the reasons behind the recent slew of material price increases and look at some of the things you can do that might help limit their impact.
It will not have escaped your notice that we have recently been experiencing a number of price increases from various suppliers. These have been across a wide range of products.
There are many factors currently affecting prices and most are related to the Covid pandemic. These include raw material shortages, high product demand, reduced shipping capacity, increased delivery costs and even staff shortages leading to reduced production capacity.
These factors have all been covered in the press over the previous weeks, some of which can be found below.
- Covid Vaccination programs around the world
- Raw Material Shortages
- Shipping Container Availability
- Packaging and Delivery
- Staff shortages due to NHS Test and Trace
Manufacturers can often absorb some of these costs in the short term, at least partially, but while margins continue to be eroded, it is inevitable that price increases will continue to be introduced.
Regretfully, in these uncertain times, it is not always possible to predict or mitigate these increases. At the moment we are certainly not dealing with 'annual' or 'inflationary' type increases. If we were, there would be perhaps more room to challenge internal manufacturing costs and efficiencies. Nevertheless, Cadillac Plastic will continue to work with its supplier partners to minimise and delay price increases.
It is also Cadillac Plastic policy to to give advanced notice of price increases to any affected customers, by letter or email. We will continue to give a 30 day notice period of any increases, even where our own prices increase immediately.
What we can all do?
Many of these factors are outside our control, but there are practical steps we can all take to help the situation. Here are our top 5 tips that may help to manage and reduce the impact of price increases and material availability.
1: Plan ahead
Some of our largest customers plan deliveries up to a year in advance, and while not everyone is able to do this, we recommend that you talk to key customers about extended lead times and demand forecasts. Whilst we pride ourselves on excellent service and short delivery times, we are always happy to work to scheduled deliveries ahead of time.
2: Understand Future Demand
Understanding and anticipating future demand increases gives confidence to hold working stock of key items. After all, you cannot sell what you don’t have. Increasing your stock holdings and anticipating demand, means you are better placed to manage longer lead times from suppliers.
3: Minimise Wastage
Cadillac Plastic converts many products from master rolls and supplies custom sizes, reducing waste and generating cost savings. We do not charge for this service. Check the sizes you are buying. If you are ordering standard sheet sizes, you may be wasting more than you need to. Speak to us for advice on material yield and wastage. We will check to ensure you are getting the best yield possible for your requirements.
4: Alternative Materials
We hold stock of hundreds of types of material, from some of the biggest and most trusted manufacturers. Materials are available in a wide range of thicknesses, finishes and material properties. There may be an alternative product available, perhaps better suited to your application. Alternatives may also provide reduced lead times or increase cost savings.
5: Speak to Us
We are real people at Cadillac, and our knowledgeable Internal Sales Team are always happy to discuss your requirements. Remember, we are experts in all types of filmic and adhesive materials and will recommend the most suitable materials. We work closely with our suppliers and material manufacturers to provide information and insight about products that would best suit your application.
What Happens if Material Prices Fall?
Finally, we hope and expect that some of the factors leading to price increases will eventually relax and prices will start to come down. It is Cadillac Plastic policy to pass on price reductions in the same way, so as a customer, you can be assured of fair pricing combined with our trademark excellent service.