NEW YORK, Sept. 21, 2023 - The global landscape of crude oil production and supply has never been more complex, impacting industries far and wide. For a leading North American manufacturer of packaging solutions, reliant on polymer production, the challenges posed by the current state of the oil and gas supply were significant.
Client's Diversified Manufacturing Reach
Our client, a North American packaging solutions manufacturer, operates across multiple locations in the United States and Canada. With over 50 production facilities and a worldwide sales presence, they serve a diverse client base spanning industries such as aerospace, automotive, real estate, e-commerce, food, and beverages. Their product portfolio, including shrink wraps, stretch films, and protective packaging, relies heavily on crude-oil derived raw materials like polyvinyl chloride (PVC), polyethylene (PE), and polyolefin (POF).
Navigating Supply Chain Challenges
As a polymer manufacturer, our client's operations were critically dependent on raw materials like ethylene and propylene. The prices of key raw materials, including polyethylene and polypropylene, had surged to all-time highs. Ongoing oil and gas supply issues, particularly concerning key input materials originating in Russia and Ukraine, posed a significant threat to the client's supply chain. Sanctions on Russia and heightened geopolitical tensions exacerbated these concerns.
The Shift from Single Sourcing
Recognizing the risks associated with a traditional single sourcing strategy, the client sought to pivot towards a more predictable procurement approach. They explored the potential of dual sourcing to mitigate supply chain vulnerabilities, especially in the face of uncertain oil and gas supply dynamics.
SpendEdge's Swift Expertise
In early 2022, the client engaged SpendEdge's experts to gain a comprehensive understanding of the evolving global crude oil production landscape and its potential impact on their business. Our experts swiftly embarked on this mission and conducted an in-depth study spanning 2022-2028.
Key Insights and Recommendations
Our study encompassed a wide spectrum of activities in the dynamic oil and gas sector, including historical crude oil price movements, supply and demand dynamics, refining operations, and downstream effects on raw material prices. The outcome was a wealth of insights and actionable recommendations for the client.
Paving the Way for Dual Sourcing
Armed with our insights, the client is now in the process of solidifying a dual sourcing strategy, aimed at reducing risks without compromising quality and product consistency. This strategic pivot positions the client to navigate the uncertainties of the oil and gas supply landscape and ensure uninterrupted operations.
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