The Six Main Reasons for the Global Balloon Shortage
(1)The disruptive nature of the Covid-19 pandemic has affectedmanufacturers.
Asthe spread of the Covid-19 virus around the world resulted in countless global lockdowns and suspensions of business, many manufacturers had to close down for weeks or months on end.The last two years since the initial outbreak in Wuhan have seen over ninety countries implement multiple lockdowns, resulting in manufacturers having to cease their operations numerous times.These recurring disruptions to the latex production line have also meant that as lockdowns have ended and production has begun again, many manufacturers are struggling to catch up with the renewed demand. The constant disruption to supply in over 90 nations across the world affected all levels of industry and has resulted in the worsening of the global balloon shortage.
(2) Manufacturers continue to suffer from staff shortages.
The continued use of work from home procedures and localized Covid outbreaks means that many workplaces are critically low on staff. These staff shortage shave resulted in suppliers having to decrease the number of hours worked as well as reduce the amount of total latex manufactured. Self-isolation policy’s for infected staff members and business means that many manufacturers have also had to shut down outside of national lockdowns, resulting in further disruption to supply chains even while world trade is moving.
These staff issues are only worsened by the fact that numerous manufacturers are struggling to find replacement staff, mainly due to the fact that many individuals moved out of the manufacturing industry during the first series of business shutdowns.Declining staff numbers continue to weaken the latex production industry and multiple manufacturing companies are struggling to find the specialists they need, worsening the global balloon shortage.
(3) New safety measures due to Covid have slowed down production.
With every global manufacturing power implementing some form of pandemic response program, the manufacturing industries around the world have had to adapt to new production safety methods.These mandatory programs have encouraged reduced staff numbers, distanced supply chains and reduced workplace contact which slows down the overall production line and worsens supply issues. These pandemic response programs have also changed multiple times throughout the last two years of the pandemic, further disrupting the workflow of many latex producers as they readjust their production lines to fit with new state or government guidelines.
Manufacturers across the world have noted a significant decline and in 2020 alone the global volume of world merchandise traded declined by 5.3%.Many manufactures have identified disrupted production lines as the primary reason for this decline, stating that manufacturing has been slowed by workplace social distancing and self-isolation procedures. Social distancing and non-contact practices mean latex manufactures are unable to secure the materials they need in a timely manner, while self-isolation practices have resulted in the loss of specialist workers, halting production entirely on some occasions.
(4) Manufacturers are suffering from global supply chain disruptions.
Manufacturers in the latex industry and event planners rely on extensive supply chains that bring materials and products from all over the world.The global pandemic and a series of disruptions to supply chains means many within the latex industry are still waiting for supplies to arrive so as to begin production, further contributing to the continued global balloon shortage. Global supply issues are affected by events such as the Suez Canal closure, resulting from the Ever Given container ship running aground and blocking vital traffic through the canal.
The400-meter long ship was stuck for a total of six days and seven hours, blocking 365 trade ships and resulting in a hold up of 3.3million tons of cargo an hour.This delay affected countless industries, including latex manufacturers, and resulted in an estimated$9.6 bn in trade hold up that could be felt through every trade and manufacturing sector in the world. The Suez Canal is one of the world’s most vital trade routes because it allows export ships to avoid traveling around the African continent. Its closer for such a long period has meant that many supply chains are still attempting to catch up with the disruption. While certainly, the most damaging, the Suez blockage is not the only supply problem global manufacturers have had to face in the last two years.
The United Kingdom and European Union are both continuing to suffer from a
shortage oftruck drivers for transporting goods, increasing the delay in global supply chains and worsening the movement of latex supplies across the Atlantic Ocean. The end of 2021 is looking no better for global supply chains as a world wide container shortage is expected to significantly disrupt the flow of goods and materials around the worlds ocean.The latex industry relies on goods being imported from allover the world and the closure of vital trade links as well as the increased disruption caused by the global pandemic means that the balloon shortage is only set to get worse in the coming months.
(5) Manufacturers are experiencing a shortage of materials to produce specialist balloons.
The above-mentioned supply chain issues and the after blows of the pandemic means that many within the balloon sector lack the necessary materials to produce the high-quality balloons that event planners require.While the latex manufacturers are suffering the most, alternative balloon suppliers are suffering from a global lack of aluminum foil and helium, worsening the global balloon shortage. The aluminum market is facing a scarcity of material due to a decline in mined material as well as a rapid increase in the cost of purchasing, prompting many industry leaders to bulk purchase aluminum.
The beginning of 2020 also saw a historic rise in the cost of helium which prompted a shortage of this rare element. While this shortage has stabilized in the latter part of the year, it has meant a knock-on effect in the production of specialized pre-inflated balloons and further disrupting the services that party planners can provide. This bulk buying, rise in the cost of goods and physical scarcity means that specialized foil balloons and pre-inflated balloons are becoming more difficult to acquire. Further worsening the global balloon shortage in its more specialized non-latex areas and increasing the disruption to event planners services.
(6) Balloons are in higher demand than last year.
While the global pandemic certainly has had a profound effect on the entire world, the successful rollout of vaccination programs is allowing many of us to seethe light at the end of the tunnel.As pandemic response programs have been reduced across the globe, we have seen the return of events like weddings, concerts and especially parties, a very welcome breath of fresh air after the last two years of social confinement.
However, while the return of events is certainly cause for celebration, it has meant a significant increase in demand for party materials, including balloons. This increased demand means that when suppliers are able to secure stock, they are quickly being sold out as event planners snap up what’s available in the increasingly supply restricted market. The global production and supply chain issues combined with the ever-increasing demand for event planner materials has only further worsened the global balloon shortage. This shortage is affecting everyone within the industry, from wholesale retailers to small local businesses, and many suppliers are out of nearly 90% of their stock levels.
Tohelp event planners and coordinators prepare for this worsening balloonshortage, we have put together a selection of the top five tips to help thosein the parties industry counter the worsening global balloon shortage.
(1) Develop a supply shortage response team.
Being properly prepared for a shortage is one of the best ways to respond to supply chain stoppages.Establishing a shortage response team is key to helping any business navigate supply shortages quickly and efficiently. These teams can monitor stock levels, contact suppliers for updates and develop amore established relationship with the manufacturing team.
Most importantly, a shortage response team can develop a supply chain risk matrix that allows for assessing probabilities for supply chain disruptions and so mitigates and monitors the risks of your business running out of stock. By establishing a shortage response team, your business can determine an effective model to manage supply chain problems and ensure you have enough stock for your lients parties.
(2) Develop communication with your suppliers.
It is essential to have effective communication with suppliers for several reasons. By having a good relationship with suppliers, you can establish an association of mutual collaboration that results in benefits for both parties, setting your business up as a priority in the eyes of a supplier. Establishing a solid contact point between you and a supplier like Candy Spot ensures that you as an event planner can protect your business and customers against significant variations in demand.This also allows event planners to avoid suffering from price spikes by having pre-established contact with their suppliers, providing warning of any changes in supply and demand.
(3) Keep accurate records of your supplier's stock level.
Keeping some form of record or ledger on your supplier's stock levels can help you pre-plan for a shortage.Whether you use an excel spreadsheet or a complex analytics program, an accurate record helps you spot the beginnings of a supply shortage and prepare accordingly.It also allows you to pre-plan your purchasing patterns, improving on the reliability of your supply levels and ensuring you never lack the necessary equipment for an event.
(4) Don't be blinded by the costs.
Cost is the underlying factor of any business negotiation for many buyers and suppliers. The fear of over-purchasing price hiked goods during a supply chain shortage leads many buyers to delay and usually means that their production and bottom line suffer for it.Focusing only on cost can lead to being left with lower-quality products, less responsive suppliers, exhausted stock levels and a myriad of other business disruptions.While sale price will always be a dominant factor in the equation, today's best practices suggest you should look at other factors, including stock access and flexibility, risk management procedures and the supplier's product quality to ensure the best response during a supply shortage.
(5) Plan ahead for shortages and buy in bulk when stocks are available
One of the best ways to plan for a shortage is to buy in bulk when there is any disruption to the global supply chain or when your supplier has the items you require in stock.By buying in bulk, you can develop a stockpile of items for any event and so ensure that your bottom line is unaffected by any form of shortage. Buying in bulk within the event planner industry means you will never have to worry about turning down a client due to a lack of supplies, allowing your business to be easily up and running while others that failed to prepare miss out.
The global balloon shortage has resulted in a tough hit to the latex industry after the last few disruptive years, however event planners and businesses can be prepared through proper planning and a strong supplier relationship.Taking all these factors into your supply chain decision-making process will give your business the power to prevent shortages and increase margins.The fact is that supply shortages will never completely go away but the ability to reduce them can give you an advantage over your competitors.
