As the COVID-19 pandemic continues, MJS Packaging reports key insights regarding the current state of the supply chain industry. With lead times having unforeseen factors, companies should revise how they communicate their needs with their packaging partner.
Supply Chain Industry Observations with Bill Schmude
To continue to push your company in the right direction, our Senior Vice President of Global Supply Chain, Bill Schmude, discusses 5 key insights on the current state of the supply chain industry, along with some recommendations to ensure your company remains competitive.
5 Key Insights
Extremely Tight Capacity
The industry’s domestic supply for many items is at capacity. However, there are immediate and short-term opportunities within the international supply chain markets. MJS Packaging proudly partners with international manufacturing companies to fulfill their packaging needs. We continue to offer a wide range of packaging items from bottles and closures to pouches and tubes.
Supplier Lead Times
We have been seeing lead times at historic levels since earlier this year. Some lead times are as far out as June 2021 on certain items, with one manufacturing partner scheduling for 2022. Our Supply Chain team is constantly scouring the globe for manufacturing and supply partners to meet the customer-specific price, quality, and lead time requirements. This is the advantage of working with MJS Packaging: as one door closes, we quickly pivot to provide viable alternatives.
Forecasting is critical for the success of our customers. We will work with your company’s packaging needs to ensure we can meet the demand in a timely manner. Our knowledgeable packaging solutions specialists are ready to assist with finding alternative packaging materials, addressing order concerns or learning about future order needs.
Our Warehouse Stock Program
Our MJS Packaging Stock Program at our Livonia warehouse is restocked with common packaging items. Our fill rate, the proportion of customer orders we can satisfy without backorders, is 96%. We are able to immediately process orders as they come in.
View our stocked hand sanitizers and disinfectants packaging list - these items are ready for purchase immediately. If your company is in need of different items, contact us for a quote using the information at the end of this post.
MJS Packaging has seen price increases due to machine capacity and labor shortages. The pandemic has left entry-level jobs unfilled, in part due to government unemployment programs. Other materials, like resin and raw materials, have returned to or are beginning to exceed historic spot market pricing.
We are also seeing inflationary pricing from key suppliers. Currently, we are in negotiations to minimize the impact on our customers.
International air travel is seeing a 90% decrease year over year, which is leading to belly capacity, the storage area underneath the main deck of an airplane, down 70%. The lack of capacity is leading to split shipments and overall price increases around the nation.
With sea travel, the freighter capacity is up 24%, but rates are expected to increase as we head into peak season. There are no significant port delays or custom concerns affecting our customers at this time.
Lastly, for domestic truckload and LTL travel, local availability is beginning to tighten, but there are no drastic fluctuations in price at this time.
MJS Packaging Recommendations
While labor shortages are expected to continue, we want our customers to forecast and conduct demand planning. It helps us maintain packaging supply and minimize pricing risk.
Let MJS Packaging Help Your Company
We are committed to your success! Again, we encourage you to communicate your packaging needs to us early and often. Knowing your company’s needs helps us position ourselves to solve most packaging issues and challenges. We will continue to get through this difficult time together.
Contact one of our knowledgeable packaging solutions specialists online or call us at (800) 915-2262 today!