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Supply Chain Weekly Wrap-Up 05/06/2022-05/12/2022

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Drug producers supplying NHS face supply chain crisis

The National Health Service (NHS) in the United Kingdom is facing a shortage of medicines which are relied on by hundreds of thousands of patients. The companies that supply the UK with these medications are dealing with “unprecedented pressure” on supply chains, according to an industry body.

It has been discovered that manufacturers of commonly used drugs in Britain, called generics, are struggling with a “perfect storm” of challenges, including increased costs of raw materials. The British Generic Manufacturers Association (BGMA), whose members supply the NHS with 2.2 million packs of medication per day, claim there is a “real risk” that the service will face more shortages for months to come.

As well as the current HRT shortage in the UK, other products likely to be affected by these disruptions include hay fever medication, anti-depressants and painkillers. The chief executive of The Association of Independent Multiple Pharmacies (AIMP) said “we are asking for better transparency in the supply chain… because we don’t want to reach a point where there is a threat to an important medication, and we are left facing a life-threatening issue.”

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 China’s trade slows due to lockdowns and decreased demand

Supply chain pressures coming from COVID-19 lockdowns damaged China’s trade statistics for April. China’s exports showed the lowest increase for nearly two years, highlighting how high inflation is affecting global consumer spending. Rory Green, head of China and Asia research at consulting firm TS Lombard in London said that this weakness “is a massive headwind for global growth.”

The heavy restrictions imposed by China on key cities such as Shanghai have taken their toll, with exports falling by 0.9% and imports falling by 2.7% from the March figures. Chinese output has been hit by transportation delays, production suspensions and goods shortages. Economists are concerned about the slowdown in China amid other global problems, including surging energy prices and the slowdown in manufacturing.

Surveys of managers in the services and manufacturing sectors pointed to a sharp slowdown last month, with 60% of people saying they are still unable to operate at full capacity and over half have delayed or reduced investment in China. In response to the ongoing problems, China’s central bank said it would step up its support, while The People’s Bank of China said it will divert liquidity towards weaker parts of the economy.

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Stellantis boss warns of future electric car battery shortage

Carlos Tavares, chief executive of Stellantis, the automotive manufacturer has warned that battery shortages could affect the industry starting in 2025 as more people will switch to electric vehicles. The automaker has said that the current plans for battery production may not have the capacity to deal with the demand from carmakers in the coming years, even with new initiatives to increase production.

Tavares believes that battery supply could be the next bottleneck facing the industry, despite new investments in European “gigafactory” battery plants and suppliers increasing their scale in China, South Korea and Japan. The chief executive also warned that the shift to electric production could create “geopolitical risks” because of dependence on minerals mined in countries which could be classed as strategic rivals.

His prediction comes after a long stretch of supply chain challenges for the industry including chip shortages. In a conference this week, Tavares said “I can anticipate that we will have around 2025, 2026, a short supply of batteries, and if there is no short supply of batteries then there will be a significant dependence of the western world vis-a-vis Asia.”

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  • Source: https://www.allthingssupplychain.com/supply-chain-weekly-wrap-up-05-06-2022-05-12-2022/?utm_source=rss&utm_medium=rss&utm_campaign=supply-chain-weekly-wrap-up-05-06-2022-05-12-2022

This Post was originally published on All Things Supply Chain

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