Taylor Healthcare - Supply Chain Update

Overcoming the Global Supply Chain Crisis Market/Supply Update Fall 2021

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The Challenge: Surging Demand A PROACTIVE APPROACH TO A GLOBAL CRISIS Material Constraints and Allocations Demand for raw materials has reached historic levels, causing manufacturers of healthcare products to experience bottlenecks in their supply chains.

Many printing substrates and critical raw materials are becoming increasingly difficult to source and are subject to allocation restrictions in some cases.

Though expected to gradually normalize in 2022, certain supply restrictions and allocations currently still apply.

Your Taylor Healthcare representative can answer questions about the availability of materials needed to produce your specific healthcare products as well as the steps we’re taking to reduce the risk of delayed shipments.

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The Challenge: Supply Chain Disruption A PROACTIVE APPROACH TO A GLOBAL CRISIS Extended Deliveries

Global Shipping Rates $10,360.87 $1,383.00 $12,172.00 $1,105.00 $6,192.00 $1,625.00 $14,558.00 $13,618.00 $15,849.00

Composite Container Index Los Angeles to Shanghai Shanghai to Los Angeles New York to Rotterdam Rotterdam to New York Rotterdam to Shanghai Shanghai to Rotterdam Shanghai to Genoa Shanghai to New York

14,000

Delivery delays have become commonplace on raw materials and finished goods and are expected to continue for several months.

12,000

There are several reasons for this:

10,000

● A shortage of drivers is contributing to extended delivery times.

16,000

8000 6000 4000 2000 0

2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022

● On average, five shipments need coverage for every one driver. ● The demand for ocean transportation has increased 30% and outpaced supply due to container shortages. ● This has resulted in long delays, port congestion and significant cost increases. ● Global shipping rates (see chart) are up dramatically in 2021.

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The Challenge: Rising Costs A PROACTIVE APPROACH TO A GLOBAL CRISIS Price Increases NBSK List Pulp Pricing (RSI 10-Year History)

$1600

Most material suppliers (labels, paper, films, adhesives, packaging, pallets, etc.) have announced significant price increases with more expected this year.

U.S. Dollar per Tonne

NBSK pulp prices are at their highest point in the past two decades, having climbed steadily over the past three months.

$1400

Other materials — such as liners, films, adhesives and even corrugate — are experiencing similar increases due to supply and demand imbalances resulting from raw material shortages.

$1200

$1000

Your Taylor representative will be able to provide you with updates on how this might impact the cost of your labels.

$800 Jan. ‘11

Source: RISI Fastmarkets

Jan. ‘16

Jan. ‘21

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Other Factors In Play A PROACTIVE APPROACH TO A GLOBAL CRISIS

Historic Demand

Force Majeure

Labor Constraints

Container Shortages

Direct Thermal Anti-Dumping Case

Label demand driven by explosive growth of packaged food and beverages due to the pandemic.

Severe weather events have hit suppliers hard, especially those distributing polypropylene and ethylene.

Massive ongoing shortage of truck drivers and factory workers.

Containers are stranded in ports and rail yards due to the labor shortage.

Pending anti-dumping investigation is limiting imports into the U.S.

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Now For The Good News A PROACTIVE APPROACH TO A GLOBAL CRISIS Our Planning Has Paid Off Taylor Healthcare has largely mitigated these challenges through strategic forecasting and sourcing decisions that were many months in the making.

Production continues for: ● Labels ● Wristbands ● Hospital signs and graphics ● Promotional marketing products ● Patient discharge folders ● Patient communication boards, and much more Ask your Taylor Healthcare representative for the latest information on the availability, cost and delivery timeframes for our entire line of healthcare products.

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How We Can Work Together A PROACTIVE APPROACH TO A GLOBAL CRISIS The Power of Partnership By working together, there are three things we can do to help “hold the line” on costs and maintain product availability going forward.

1. Demand Forecasting Obtain forecasts for three to six months out and review with your Taylor Healthcare account representative.

2. Ordering Get future orders submitted in a timely manner and plan for extended lead times.

3. Risk Mitigation Be available to review and approve alternative materials where appropriate to increase supply chain flexibility.

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Contact Us A PROACTIVE APPROACH TO A GLOBAL CRISIS Please contact your Taylor Healthcare representative if you have any questions about the steps we are taking to address the ongoing global supply chain crisis on your behalf. As always, we remain focused on delivering unmatched quality, service and value, and we greatly appreciate the trust you place in us each day.

Chris Weber Senior Vice President Sales

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Thank You

CONFIDENTIALITY NOTICE: This document contains confidential information intended solely for the recipient(s) named herein.

The information set forth in this document may not be reproduced or disclosed by the recipients(s) without the prior written consent of the author.

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