The Covid-19 pandemic has strained the label and packaging supply chain greater than ever before. Procurement has been more challenging, and there has been heightened demand across most pressure sensitive label segments. Material suppliers have been confronted with raw material constrains, logistic capacity issues and capacity challenges in production.

The exhaustion of global supply chains has extended beyond the pandemic, too. The Texas winter storm, for example, added to supply chain complexity. UPM Raflatac, however, has worked diligently to effectively respond to these challenges. According to Tim Kirchen, senior vice president, Americas region, UPM Raflatac, the supply imbalance has challenged the industry and the traditional “short lead-time model” for materials. UPM Raflatac’s procurement, supply chain-, operations- and customer service teams have to be extremely agile to service its customers effectively during these times.

“The supply chain has been continually strained over the last 1.5 years,” explains Jeff Buchanan, director, Paper Laminates Americas at UPM Raflatac “We’ve had unpredictable surges in demand, with the initial Covid surge related to lockdowns, massive uptick from shop at home and package delivery, and then this year with the re-opening of the economy.

“On the raw material side, there have been several events that have impacted supply,” he continues. “Months of high demand have prevented paper mills from building any inventory which has steadily made supply tighter. With the return of the economy in 2021, we’ve seen significant additional demand across the paper industry. With many mills producing both Specialty and Packaging or Communication grades, the demand on grades other than label have only tightened labelstock specialty grades even further.  Adhesive supply has been under significant pressure throughout 2021, too. The freeze in Texas in February started the supply issues, with major impacts to base polymers for adhesives. Supply was further constrained in August with Hurricane Ida.”

These challenges have impacted both global and local supply chains. Demand for road and ocean freight has exploded after almost closing down during the outbreak of Covid. “The procurement of freight outside fixed contracts has proven really difficult in a carrier’s market, where prices have been increasing week to week,” comments Chris Mincher. supply chain and terminals director, UPM Raflatac. “UPM Raflatac planning teams have had to adapt to ever-changing schedules for ccean freight and availability of road freight. It has always been assumed that a booking was a guarantee of service, but that is no longer the case. Our teams spend hours scheduling and rescheduling the same deliveries for our customers as we try to keep our customer promise.”

The supply chain challenges have necessitated greater communication. UPM Raflatac has emphasized keeping its customers, suppliers, and employees at the forefront of all plans and decisions. Having instituted these plans over the course of the last two years has helped UPM Raflatac manage more effectively.

“We request a clear understanding of both short-term and long-term demand needs from our customers,” states Gabrielle Whittaker, director, Films & Specials Business Americas, UPM Raflatac. “Requesting advance notice of demand, either by forecasting or by advance purchase orders, helps UPM Raflatac plan for materials with the supplier base, as well as production planning. We work with suppliers to understand their challenges in order to optimize results and mitigate risks. In normal times, we developed contingency plans so that we could manage better in difficult times. This is an area that many forget. Another factor is safety especially in crisis. Employees can get tired and you may have to change production hours and increase overtime. You must balance the increased production needs with the health and well-being of your employees.”

“Advance notice of demand, either by forecasting or by advance purchase orders, helps UPM Raflatac smooth out our supply chain,” adds Mincher. “In this market this is not an absolute guarantee of service, but it will help us and our suppliers.”

In order to effectively manage the supply chain, UPM Raflatac has relied on the contingency plan and risk management strategies in place that the company has in place. It’s also critical to have strong relationships with suppliers, customers and end users, which allows for transparent and proactive conversations.

“We do a really good job in supply chain planning and having backup plans in place,” says Buchanan.  “We’ve had to go to those backup plans many times across the last 18 months. “Also of note here is the performance of our partner suppliers. We’ve had great support behind us throughout this period, and with their support we believe we have maintained the best service possible given the conditions.

“We’ve gotten a lot of compliments through this period about our communication,” adds Buchanan.  “We’ve tried to over-communicate when we could with the belief that if we shared everything we could, we could make better joint plans. We’ve had daily and weekly planned and impromptu communications with both customers and suppliers as needed, and that effort has been appreciated by our suppliers and our customers.”


It will take some time for the supply chain to rebound from the challenges faced due to the pandemic, winter storms, hurricanes, logistic challenges, and other market impacts. According to Whittaker, the supply chain is likely to remain very tight due to capacity and availability issues. “We must begin to look at how we operate differently, as not all aspects in the supply chain will stabilize at the same rate,” she says.

Despite the challenges that have impacted the industry, UPM Raflatac is optimistic for the future.

“Some of the growth we see in pressure sensitive materials, in particular variable information materials, is structural and long-term,” concludes Kirchen.