‘Inflation, war pose risks to supply chain’


Businesses and logistics providers will continue to grapple with rising consumer prices as well as the Ukraine-Russia conflict, according to officials from top local firms.

Officials from companies, including Ace Hardware and United States-based multinational conglomerate Honeywell, and the Procurement and Supply Institute of Asia (PASIA) spoke about the impact of geopolitical tensions on the supply chain during a forum held last March 15 in Taguig City.

Arnel Gamboa, Vice President for Logistics at Ace Hardware, said geopolitical tensions, such as the war between Russia and Ukraine led to a sudden halt in the movement of goods, including rare earth metals, flour, oil and fuel. This, he said, had an immediate impact on supply chains and inventories.

“If you look at strategic sourcing, that’s also going to be quite a problem because we cannot readily shift to alternative sources when you have something happening immediately,” Gamboa said.

He noted that it is also difficult to enforce contracts because during a war, “contracts are not enforced anymore.”

“So if you have an artificial shortage of supply…what happens to your supply chain? You will have some scarcity and thereafter you see an increase in prices which I think all of us have experienced since last year,” he added.

Brad Santiago, Country Business Leader of Honeywell, said the conflict in Eastern Europe is delaying the delivery of required goods.

Prior to the war in Ukraine and Russia and the pandemic, Santiago said companies can expect certain deliveries in 30 days.

“These days it’s not the case already because sometimes you have to consider potential delays,” he said.

PASIA President Charlie Villaseñor said developments in the international arena have resulted in “a lot of demand volatility.”

“It’s very hard to predict what’s going to be in demand and more importantly, what we hear from CEOs nowadays is the biggest problem that they’re actually facing is trying to make the products available…to be sustainably, be on inventory, to actually serve the market,” he said.