Effects of Global Supply Chain Challenges on Digital Ink
It’s a tale that’s being told repeatedly these days. Across the globe, shipping delays, supply chain issues, and product shortages continue to plague nearly every industry. These problems are no less prevalent in the wide-format printing industry. Within that segment lies a crucial piece of the puzzle experiencing issues: ink.
It’s the shortage of factory workers. It’s the lack of availability of raw materials, like pigment. It’s the containers used to store the ink and the cargo ships carrying it. It’s the backlogged docks … it’s everything. The ripple effects of this are felt everywhere, with one specific pain point being price. As announcements of price increases continue to roll out on both raw materials and ink itself, the surge in dollar signs has immediate effects on printing shops everywhere trying to fill an onset of orders.
Pricing Pain Points
Thankfully, most print service providers (PSPs) were able to keep their doors open under the essential business label when COVID hit the industry head-on. As life began to open and orders for other items beyond personal protective equipment (PPE) flowed once again, everyone was ready for things to trend upward. But now, the effects are hitting hard in other areas, particularly when it comes to ink and raw materials.
Companies – such as Clariant, a specialty chemical company – have announced price increases across the board. The company states that its increases will take place across its Quinacridone product portfolio, including pigments and pigment preparations, drawing attention to the issues surrounding raw materials. And they aren’t the only ones.
In a press release that was recently published, Sun Chemical also announced an increase on inks, coatings, and adhesives in North America. While the company declined to directly comment, Chris Parrilli, president of North American Inks, said in the release, “Sun Chemical’s top priority throughout 2021 has been to maintain the supply of our products to our customers. We have absorbed the higher costs of expedited freight, raw materials, and other key inputs in order to achieve that objective. The recent pace and magnitude of these costs have exceeded our ability to mitigate their impact and, despite various actions to help offset, it is crucial that we implement further price increases across our entire portfolio of products to continue to meet the needs of our valued customers.”
It's a trend that no one wants to be a part of, and it’s tough to say when it will taper off.
“Earlier in 2021, we thought shortages would be resolved based on our historical expectations,” says Laura Maybaum, director of product marketing at Nazdar. “We are now looking into 2022 for supply and lead times to become more predictable, but it may not be better. We are in uncharted territory.”
When talking raw materials to produce ink, Maybaum lists problems in the supply chain stemming from plant shutdowns due to weather, operations disruptions, allocations based on last year’s COVID impact, and even reductions in quantities and labor shortages. “Not only is finished ink impacted, but also the packaging, including buckets, bottles, lids, pouches, bags, boxes, chips, nozzles, adapters, etc.,” she continues.
In addition to those factors, Sun Chemical also lists a steady climb in international and domestic logistics costs as a factor in price increases.
Michael Maxwell, senior manager of corporate strategic development for Mimaki, states that while the company is in relatively good shape with ink itself, they’ve also seen issues on the raw materials side, mostly due to shipping challenges.
“Overall, the shipping issues are causing the most stress — getting the pigments, the fluids, or anything we might need to make the ink,” he says. When issues start at the source, he notes that it can be a downward cycle from there.
“If we can’t get our raw materials, we can’t deliver to our dealers, they can’t deliver to their customers (print shops), and then it compounds into a traffic jam,” Maxwell explains. From there, orders for end products like stickers, wall graphics, vehicle wraps, and others are affected. It’s here that the PSP starts to feel the effects in both inventory and cost.
Ways to Soften the Blow
With lower inventory levels and higher prices, PSPs need to constantly keep on top of updates when it comes to digital printing inks. While no one wants to experience these challenges, much less pass them along to the end-user, there are a few things shops can do to soften the blow.
It starts with inventory management. “Pivoting and having back-up solutions remains key,” Maybaum emphasizes. She suggests staying in contact with your typical supplier as well as others around the industry to know what’s in stock, when, or what won’t be in stock for a while. Even still, she notes that specific time frames and answers will be hard to come by: “The issues are unprecedented and extremely complicated for a supplier to provide specific timelines and quantities per series or item.”
Maxwell advises to keep at least a month’s worth of ink on hand if possible. “What I suggest to shops is to think ahead,” he says. “It’s the old adage: expect the best, prepare for the worst. Know how much you use, and try to even keep an extra set, because you never know when you won’t be able to get something.”
This can feel easier said than done, especially when shops are trying to pass along unpleasant news to their customers. At this point, even if it’s not great news, communication is essential in both expectations of order delivery and price. “Pricing has been a bit of a challenge for most shops,” acknowledges Maxwell. “The best thing I can suggest is to look at pricing in general and try to find a way to level it out. … If your customer comes in on Tuesday to order but your price goes up on Thursday, you need to adjust for that.”
Maybaum encourages PSPs to set expectations from the get-go, letting end-users know there may be delays or price changes in the future. In a world where the Amazon mentality of instant gratification is prevalent, this consideration can’t be taken lightly.
When a shop isn’t able to fulfill an order due to issues getting ink, there are some outside options. Maxwell has two suggestions: shop camaraderie and new equipment. “Look within your network of people,” he says. “Ask for help — if another shop has ink, see if they’ll help with an order.”
In his opinion, asking for help to get an order fulfilled is better than losing a customer altogether.
And when things really get tough, Maxwell explains that Mimaki has seen an upward trend in new equipment purchases. But he cautions this isn’t always the best option to bypass not being able to get ink; it’s all about evaluation. “Even though cash is flowing, be careful on how much you put yourself in debt,” he states. “At the end of the day, don’t just look at the cost of the ink, look at every cost surrounding a machine and business operation, like parts and maintenance, amount of energy required to run it, etc. Look at the amount of ink the machine consumes per print (efficiency) and use the machine that’s most efficient and will yield more.”
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