The market forces us to be flexible. That’s how we managed to win new challenges.
Another problematic year has passed by for Benincà’s Operations Department. After the pandemic, we had to deal with the global supply chain crisis, which caused unprecedented effects. In October 2020, we realised that procuring raw materials was getting increasingly complicated.
Initially, this crisis hit the electronic industry. For example, delivering a few microprocessors took 8 to 52 weeks. Sometimes even 80 weeks! In 2021, this crisis involved all sectors, including electric motors, plastics, wood, and paper. Usually, an electric motor was delivered in 40 days. Now it can even take 10 months.
Moreover, the sudden industrial production recovery at a global level played its part in this scenario.
As a result, since 2021, prices have kept growing, and we don’t know when this is going to stop. In less than a year, we saw the cost of materials increasing as never before: electric motors, aluminium, ferrous materials, wood and paper have increased by 90%, 58%, 72%, and 45%, respectively.
What are the consequences of this phenomenon? How did we deal with it?
First, we increased our stock to have all the materials needed and thus meet our client’s needs. Then, we developed an algorithm to predict material consumption 15 months earlier so that we could share our corporate plans with our suppliers and consolidate our partnership. We need suppliers who can use the information we provide them in advance and. In the meantime, we have to collaborate with our clients to know their medium-term needs.
The time when the client-supplier relationship was based on placing an order and receiving payments is over. Today, we need to support each other to overcome
these new challenges. For example, we have been working on our 2023 strategy since March.
Everybody from the production and logistics departments has faced these difficulties in the best possible way, managing the lack of personnel in increasingly narrower spaces and without stocking capacity. We’re working on it, creating structural solutions for the company. Moreover, we think that working together with our clients and suppliers is the only feasible solution to pursue.
Marco Pesavento - Group Operations Manager
