Price and Supply Risk Forecasting May 2023 Arthurnelle Wade Life Science Commodity Manager Systemwide Procurement, UCOP 1.U.S. Bureau of Labor Statistics April 2023 release May 2023. 2.BLS releases data for San Diego, Riverside Area, and
"Price and Supply Risk Forecasting May 2023" is the property of its rightful owner. Permission is granted to
download and print the materials on this website for personal, non-commercial use only, and to display it
on your personal computer provided you do not modify the materials and that you retain all copyright
notices contained in the materials. By downloading content from our website, you accept the terms of this
agreement.
Presentation Transcript
01
Price and Supply Risk Forecasting May 2023 Arthurnelle Wade
Life Science Commodity Manager
Systemwide Procurement, UCOP<br>
02
1.U.S. Bureau of Labor Statistics April 2023 release May 2023.
2.BLS releases data for San Diego, Riverside Area, and San Francisco every 2 months. CPI Data Summary CPI West Region
+4.9% +0.5%<br>
03
1.Per Engineering News-Record. The BCI uses 68.38 hours of skilled labor, multiplied by the 20-city wage- fringe average for three trades–bricklayers, carpenters and structural ironworkers. The MCI uses 25 cwt of fabricated standard structural steel at the 20-city average price, 1.128 tons of bulk portland cement priced locally and 1,088 board ft of 2x4 lumber priced locally – May 3, 2023 Data Index Data Summary Construction 2. The California Department of General Services publishes the California Construction Cost Index (CCCI) which is developed based upon Building Cost Index (BCI) cost indices average for San Francisco and Los Angeles ONLY as produced by Engineering News Record (ENR) and reported in the second issue each month.<br>
04
3. Source: Gartner Monthly Supply Chain Alert Supply Chain Risk Summary Current Conditions 3 Labor Logistics Materials Decreased Strain Decreased Strain Decreased Strain Food prices rose by 1.9% and beverage prices increased by 5.5%, thus some easing in the food production sector still households globally are struggling with price increases.
Energy prices increased again by 5.7% in April, led by crude oil (+7.8%) and coal (+3.8%).
Raw materials has a moderate increase of 1% and a slight decrease in metal prices of 1%.
Commodity prices are projected to fall by 21% in 2023 and remain stable in 2024. Demand for transportation services continues to soften.
Warehousing capacity still is constrained as inventory levels remain at some of their highest levels, meaning costs will remain high until utilization and availability improve.
Demand for road services in the US and EU has softened, and lower diesel costs are a welcome relief. The job markets in the US and UK showed some signs of cooling, as job openings fell to the lowest level in almost two years. Hence, may be a sign that higher interest rates are beginning to impact the labor market.
After the round of tech layoffs in late 2022 and early 2023, companies across other sectors are moving to slash jobs and cut costs amid a difficult economic landscape.
Fewer jobs were added to economy as effects from the Fed’s interest rate increases take hold.<br>
05
5/22/2023 5 Summary: KEY highlights with potential UC impacts: IMPORTANT - THIS IS A SUMMARY, PLEASE BE SURE TO READ SLIDES 6-10 FOR ADDITONAL DETAILS AND MITIGATING ACTIONS. High Risks: Moderate Risks: Construction:
Long lead times and a cost index increase of 10.4% from 2023 and 2024
Food:
Supply shortage in all Northern California for crops due to weather Food:
Shortage in supply of potatoes and shelled eggs
Increase in feed and grain cost
Logistics:
Driver turnover and fuel prices recently improved, but remain high
MRO:
Shifts from plastic to paper options and pulp production are affecting the paper industry
Energy/Utilities:
Energy pricing has been stabilizing
Life Sci Clinical/Campus:
MS: Chemicals price increases (10-20%)
Controlled substances and Adderall shortages
We remain on 60% allocation w/gases, but helium supply will be worse in summer
Infant formula allocation affects animal care. Medline for alternatives/process
IT:
Supply shortages appear to be easing
Professional Services:
Labor shortages with low unemployment rates, decreased labor force participation rates, and higher labor rates New Additions: Construction:
Continued demand is causing strain on qualified contractors and corresponding workforce
Materials costs leveling with focus on manufacturing facility construction
MRO:
Lack of drivers, higher fuel costs, China increase on demand affect availability and pricing
Life Sci Clinical/Campus:
VWR: Expect many impacted categories but some supply improvements in selective categories<br>
06
5/22/2023 Current Supply Chain UC Risks and Actions Risk probability Risk Impact NEW NEW<br>
07
5/22/2023 Current Supply Chain UC Risks and Actions Risk probability Risk Impact<br>
08
5/22/2023 Current Supply Chain UC Risks and Actions NEW Risk probability Risk Impact <br>
09
5/22/2023 Current Supply Chain UC Risks and Actions Risk probability Risk Impact<br>
10
5/22/2023 Current Supply Chain UC Risks and Actions Risk probability Risk Impact New<br>
11
Thank You Questions or Feedback, Please contact Arthurnelle Wade Arthurnelle.Wade@ucop.edu<br>
