The plastics and rubber industry are a major contributor to global market revenue with a market cap of $1378.6 billion. Plastic and rubber are interconnected because plastic is being used as an alternative to rubber in many businesses. The major categories of rubber used by the businesses are natural rubber, synthetic rubber, and reclaimed rubber. The main components of the plastics industry are polymers and performance plastics.
Also read about How to seperate recycling from junk when moving.
Plastic and rubber manufacturers demand the same development as other industries. This industry facilitates other industries by providing raw materials. If you think this industry is only about raw materials, get your facts straight. The industry includes plastic bags and bottles, rubber pipes, tires, plastic foam and more.
Plastic and Rubber Industry in Different Regions
With 40% of the market share Asia Pacific is the largest region. Accounting for 27% North America is second in this race. Europe is third with 25% and Africa is the least contributor. Currently, the major exporters of plastic and rubber include the United States, China, Germany, and Japan.
Resource: https://images.app.goo.gl/5i3DWSTHUBfj1EEC8
The major importers of plastic and rubber include the United States, China, France, and Mexico with the ratio given below.
Resource: https://images.app.goo.gl/5i3DWSTHUBfj1EEC8
According to a report by Research and Markets (2020), the global plastics and rubber market is expected to experience a decline in the Compound Annual Growth Rate (CAGR) of -2.5%. This decrease is due to many factors. Let’s discuss these factors to understand the situation.
COVID-19
The covid-19 pandemic has affected the plastic and rubber industry the same way as it almost ruined the other industries. If you examine the above charts you can see that the USA and China are the major players in this industry. These two countries are severely hit by this epidemic. It devastated the supply chains and manufacturers. The result is a massive drop in business.
Environmental Concerns
Fish in the North Pacific consume 12,000 to 24,000 tons of plastic each year. Not only does it cause injury and death to fish, but it also transmits harmful substances to humans. Synthetic plastics are facing ban movements around the globe. Like plastic rubber also contributes to environmental pollution. Anti-plastic and rubber movements affect businesses on a large scale.
Poor Inventory Management System
Many businesses are still using outdated and old techniques to manage their inventory. They still rely on their excel sheets and register for business. This method is prone to errors. These errors result in big losses and bring harm to the business. You cannot to make a single mistake in a market where giants are fighting for the crown. Your ignorance is enough to keep you out of the race.
How Plastic and Rubber Businesses Manage Inventory
Over the past few years, the industry has embraced and adopted advanced innovative methods for inventory management. But the process is still ongoing because most businesses have been using old and outdated techniques for years now.
- Manual Handling
Manual handling of stock is tend to mistakes and can cause shrinkage, loss, and damage. Many businesses face shrinkage issues due to miscounting. More than half of the businesses in this industry are dealing with the raw material and they think for managing raw inventory they do not need any advanced and automated inventory management system. According to a survey conducted by Research and Markets (2019), businesses prefer manual handling as they believe they do not have any physical goods and the same type of inventory can be managed manually. With this mindset, businesses stick to old rotten inventory management systems and usually face financial losses.
How to Manage Plastic and Rubber Inventory?
We are not just talking. We believe in identifying problems and finding solutions through healthy communication. Let’s discuss what the rubber and plastics business needs, and how to manage inventory to grow the business at this crucial time.
- Operational Visibility
As a plastic and rubber business, you need to improve operational visibility. It removes unnecessary details and makes the process easier. From marketing to sales and production to shipping you must have an integrated Inventory Management System. An efficient inventory management system is what your business needs to grow.
For the sake of the argument, imagine your marketing team has no idea about the stock and they promise your customer something which is not available. What are the outcomes? Either order will be canceled or delayed. In this situation what is going to affect? Your reputation and your business in the long run. Now reverse the situation. Your marketing team knows what they are offering and where they can find the product. What are the results? Quick and efficient delivery and satisfied customers.
- The Grip on Your Inventory
In case you are involved in the tire, plastic bottles, or any other business where you need material for production as a manufacturer or to sell it directly like a retailer. In both cases, you need to have full knowledge of your inventory. The best way to keep a check on your inventory and decide when to reorder is by setting a reorder level.
An effective inventory management system allows you to set a reorder point following your requirements. You will get the notification in case of low inventory. This saves you from overbuying and overselling happenings.
- Forecast Demands
In a competitive market where not only, businesses are in conflict but environmental NGOs are also causing problems, you cannot lose your customers. It is important that you cater to your customers and provide them with everything they ask for. This is only possible if you have detailed information about your inventory. If you’re wondering why these reports are necessary to keep your business safe. Here is the simple answer.
Your inventory reports are your strength. What is trending and which product can be a successor? These two questions are the backbone of your business and help you anticipate demands. With an inventory management system, you can find out what you need and what is just a burden on you.
The Icing on the Cake
We have reviewed the plastic and rubber industry with its challenges and methods to manage inventory. We even discussed what business needs when it comes to inventory management. After all this long-winded yet informative conversation we hope you are able to choose an efficient inventory management software. Many software offers free premium trial to its users. It automates the entire inventory process to make your business easier.
With these tips, we tried to help you understand plastic and rubber inventory management. If you have any suggestions or recommendations, you can leave a comment to enlighten other readers.
