Over the course of the past few months, General Data Healthcare has been keeping a close eye on all of the raw material and supply chain challenges that are currently impacting the global economy. These challenges have reached virtually every sector of the economy – and healthcare is no exception. Product shortages and stockouts, extended lead times, and freight issues are now part of the “new normal” for the foreseeable future.
What’s Causing All Of This?
There are many factors at play here – too many to list in this blog post. They are all interdependent and as one impacts others, it creates a snowball effect with unforeseen consequences. For the purposes of this blog post, let’s focus on two main areas:
Raw Materials
COVID and its aftermath are continuing to cause significant disruptions and chaos in global supply chain dynamics. Raw materials and resin manufacturers have been hit with a surge in demand for their products while at the same time facing labor shortages and increased downtime due to sickness, quarantines and new safety protocols. This has created a situation where inventories are low and lead times for orders continue to increase on a daily basis.
Transportation
The transportation industry is also experiencing its share of problems. Truckload and LTL transport rates are rapidly increasing, driven by the continued driver shortage, increasing fuel costs, and the surge in e-commerce demand by consumers and businesses alike. Because of this, domestic truckload rates are up between 11–36% year over year, and LTL rates have increased ~5% in 2020 and are expected to increase another 8-10% in 2021.
We’re All Feeling It Right Now
Everyone in the healthcare sector is feeling the impact of these disruptions. Despite falling COVID-19 cases, hospitals continue to experience staffing shortages. New construction projects are being delayed. Bottlenecks in both production and logistics have slowed the distribution of medical supplies, and a surge in demand continues to create upward pricing pressures.
General Data Healthcare is also experiencing a number of direct and indirect cost increases due to COVID-related labor shortages, as well as increased costs for transportation, new costs for cleaning and sanitizing equipment and workspaces, and increasing costs for raw materials and other items such as stretch film, corrugated cartons, and pallets.
Price Increase Announcement For General Data Healthcare LaserTrack™ Cassette Products
General Data Healthcare has intentionally held our LaserTrack cassette market prices stable for over 12 years without the need for a price increase to our customers. Unfortunately, over the past year we have incurred significant raw materials cost increases for many components of our cassette products, including resins and packaging materials. In addition, domestic and ocean freight costs have steadily risen and are expected to continue.
We are diligently working with our suppliers and logistics partners, as well as implementing internal productivity and cost reduction initiatives, to minimize the impact on our customers while continuing to consistently provide the high quality products that General Data Healthcare is known for.
Going forward, we can no longer absorb these increased costs. Effective July 1, 2021, General Data Healthcare will increase pricing for all LaserTrack cassette products. The increases will range from 3% to 7% depending on the SKU, with the average being 5%.
Going forward, we can no longer absorb these increased costs. Effective July 1, 2021, General Data Healthcare will increase pricing for all LaserTrack cassette products. The increases will range from 3% to 7% depending on the SKU, with the average being 5%.
What Happens Next?
If you are a General Data Healthcare customer, your account manager will be contacting you in the near future to discuss the specifics of this price increase, and how we can work together to minimize any disruption and impact it may have on your facility and operations.
As always, General Data Healthcare is committed to providing our customers with unparalleled quality in our products, customer service and support, and we thank you for your continued business as we navigate these unusual times together.
