Manufacturers Experiencing Supply Chain Disruptions

Many Canadian manufacturers are experiencing severe supply chain issues, according to a new survey.

The survey was conducted by the Canadian Manufacturers & Exporters (CME) organization.

Of the nearly 900 manufacturers that took part, nine in 10 said they are experiencing supply chain disruptions, of which over 60 per cent rated the turmoil as major or severe.

Ron Marcolin, divisional vice-president of CME, said New Brunswick manufacturers are still getting supplies to build goods, however, it is slower for them to get those goods, and sometimes the goods are over budget.

“So, what that means is there’s a bottleneck, meaning production is lower, production has decreased, production is also taking its time, unfortunately, it’s late, and that means the goods that New Brunswick producers make are slower to get out to market,” said Marcolin.

From the survey, 28 per cent of manufacturers mentioned that they are likely to relocate or scale up production in Canada to mitigate supply chain bottlenecks.

As well, 18 per cent of manufacturers plan on moving more volume to Canada in response to disruptions.

“With many blaming this on the fact that there are no Canadian suppliers of their critical inputs, or at least they are not aware of any,” reads a release from CME.

However, if manufacturers cannot produce goods on time and budget, the end-user could easily turn to other markets.

“We’re already playing catch up when it comes to manufacturing, we’re already very much into a globally competitive marketplace, so this supply chain disruption moves us backward not forwards,” said Marcolin.

He said the COVID-19 pandemic and Russia’s invasion of Ukraine have also impacted the price of goods.

“Also, the cost of transporting the goods, not just into New Brunswick if they are raw materials, but outbound to the market,” said Marcolin.

Marcolin added respondents are estimating they have suffered a combined $10.5 billion in lost sales and nearly $1 billion in increased costs.

While most manufacturers predict these disruptions will not end until 2023.