Material shortages can disrupt production, delay customer orders, and increase costs. When steel, aluminum, copper, or other critical materials are in short supply, businesses must make tough decisions about which work orders to prioritize.
The key to managing material shortages effectively is strategic planning, clear communication, and smart resource allocation. In this blog, we’ll explore how to prioritize work orders, minimize downtime, and keep operations running smoothly during material shortages.
Why Material Shortages Happen
Material shortages can be caused by:
🚢 Supply Chain Disruptions – Delays in shipping, port congestion, or supplier shutdowns.
📈 High Market Demand – Surges in industry demand outpacing supply availability.
🌍 Geopolitical Factors – Trade restrictions, tariffs, or global conflicts affecting raw materials.
💰 Price Volatility – Rising material costs leading to procurement challenges.
⚠️ Natural Disasters – Hurricanes, wildfires, or extreme weather impacting production.
💡 Example: During the COVID-19 pandemic, supply chain disruptions led to shortages of steel and aluminum, forcing manufacturers to prioritize high-value contracts over smaller orders.
How to Prioritize Work Orders During Material Shortages
✅ 1. Identify Critical Orders First
Not all work orders are equal—prioritize high-value and time-sensitive jobs first.
✔ Orders with contractual deadlines – Avoid penalties and maintain customer trust.
✔ High-margin projects – Focus on the most profitable jobs.
✔ Strategic customers – Prioritize key accounts to strengthen long-term relationships.
✔ Regulatory compliance jobs – Industries like medical and aerospace have strict deadlines.
💡 Example: A manufacturer may prioritize an aerospace parts order over a small-volume custom job because of contract obligations and financial impact.
✅ 2. Categorize Orders by Urgency & Profitability
Use a tiered system to rank work orders based on impact and feasibility.
Priority LevelOrder TypeReason for Prioritization
🔴 High PriorityLarge customer contracts, urgent replacement parts, regulated industriesHigh value, contractual obligation, or legal requirement
🟠 Medium PriorityRepeat customers, moderate-profit orders, short lead-time jobsImportant but flexible
🟢 Low PrioritySmall custom jobs, low-margin work, speculative ordersCan be postponed or rescheduled
💡 Example: A steel supplier may postpone small fabrication projects to ensure they fulfill high-volume, high-margin sheet metal orders.
✅ 3. Maximize Material Efficiency
During shortages, every piece of material counts. Reduce waste by:
✔ Optimizing material usage – Use nesting software to cut sheets and bars efficiently.
✔ Reallocating scrap – Repurpose leftover materials for smaller projects.
✔ Adjusting designs – Modify specifications to use alternative materials or thicknesses.
💡 Example: A metal fabricator facing stainless steel shortages may suggest switching from 316 to 304 stainless steel for non-critical applications.
✅ 4. Communicate with Customers Early
Customers appreciate transparency during supply chain disruptions.
✔ Inform customers of potential delays – Provide realistic timelines upfront.
✔ Offer alternative materials or designs – Find solutions that work for both parties.
✔ Prioritize loyal customers – Strengthen relationships by working with repeat buyers first.
💡 Example: Instead of waiting for delayed aluminum tubing, a manufacturer offers an in-stock alternative alloy to meet the customer’s deadline.
✅ 5. Work Closely with Suppliers for Allocation
During material shortages, strong supplier relationships can help secure priority allocation.
✔ Communicate forecasted needs – Keep suppliers updated on material requirements.
✔ Negotiate alternative sourcing options – Explore secondary suppliers or imports.
✔ Commit to long-term contracts – Mills prioritize customers with ongoing volume commitments.
💡 Example: A distributor facing hot-rolled steel shortages negotiates a monthly allocation with multiple mills instead of relying on spot purchases.
✅ 6. Adjust Production Schedules to Align with Availability
Flexibility in scheduling helps reduce downtime and improve workflow.
✔ Stagger production – Focus on jobs that can be completed with available materials.
✔ Reschedule non-urgent work – Delay low-priority orders until materials arrive.
✔ Work on pre-assembly – Complete tasks that don’t require the missing material.
💡 Example: A manufacturer waiting for galvanized steel sheets shifts focus to assembling non-metal components while waiting for supply replenishment.
✅ 7. Keep Inventory Reserves for High-Priority Jobs
Maintaining a safety stock of critical materials can help buffer against shortages.
✔ Stockpile high-demand materials when prices are stable.
✔ Use JIT (Just-in-Time) + buffer stock for essential projects.
✔ Identify long lead-time materials and order ahead when possible.
💡 Example: A fabrication shop keeps a two-month supply of high-demand steel plates to ensure they can fulfill urgent work orders even during shortages.
Final Thoughts: Smart Prioritization Keeps Operations Running
During material shortages, businesses must strategically prioritize work orders to maximize efficiency, profitability, and customer satisfaction. By categorizing jobs, optimizing materials, staying flexible with scheduling, and working closely with suppliers, companies can minimize disruptions and maintain steady production.
🔹 Key Takeaways:
✔ Prioritize high-value, time-sensitive, and contract-based orders first.
✔ Use material efficiently to reduce waste and maximize output.
✔ Communicate early with customers to manage expectations and explore alternatives.
✔ Secure supplier commitments and diversify sourcing to improve material access.
✔ Adjust schedules and maintain inventory buffers for critical jobs.
📦 Facing material shortages? Use these strategies to keep production moving and meet customer demands! ⚙️🔩🚛
