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One of the most significant challenges brought by the supply chain contractions is the fact that it has occurred at the same time the economy has grown. During 2020 and 2021, consumer packaged goods companies have seen significant growth with consumers demanding more products. This extends to the wholesale baking and snack industries, which have also seen significant sales jumps in the past two years.
This has led CPG companies to need more automation to increase manufacturing capacity. That leaves the manufacturers of processing and packaging equipment, scrambling to fill those equipment orders in spite of scarce raw materials and components and long transportation delays.
“We run a survey among our members asking about several aspects of their business, and one of our questions is about supply chain,” said Jorge Izquierdo, vice president, market development, PMMI. “And I can tell you basically all of our members are facing problems when it comes to supply chain.”
In this episode of Since Sliced Bread, Mr. Izquierdo provides insight into how PMMI members, those processing and packaging OEMs, have gotten creative in meeting those needs within the limitations today’s supply chain imposes on the marketplace. That has required more transparency, designing equipment to be more flexible in regard to components and replacement parts. It has even had an impact on how CPG companies evaluate their investment priorities.
“As we hit 2021, they still need to increase their manufacturing capabilities, but because of the supply chain challenges, now it’s not just the performance of the equipment that’s important but the lead times,” Mr. Izquierdo explained.
Listen to the episode to find out the lay of the land when it comes to supply chain and capital investment.
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