In today’s global‐supply-chain environment, ingredient shortages are not a “what if” — they’re an inevitability. At DMI Solutions, we’ve structured our formulation and manufacturing capabilities around this reality. By proactively finding alternatives, leveraging technology to monitor costs and regulations, and acting in real time, we help our brand-partners stay ahead of disruption and keep their products moving.
Why ingredient shortages are more common than ever
Several trends have combined to make raw material sourcing materials, particularly for contract manufacturers in the beauty and personal care space more challenging:
- The lingering effects of the pandemic, combined with logistics-bottlenecks, continue to ripple through global ingredient flows.
- Trade‐policy dynamics, including expanding tariffs and import-duties, raise costs and limit sourcing flexibility. For example, the average effective tariff rate rose from ~2.4 % at the beginning of the year to ~10-11.5 %.
- Ingredients and component sourcing (including chemicals and feedstocks for formulations) face extended lead times and elevated risk of shortage.
Put plainly: Suppliers of contract manufacturers must assume disruption, price volatility, and sourcing risk as baseline operating conditions, and therefore contract manufacturers must also assume and prepare for the same.
How DMI Solutions addresses this from day one
At DMI Solutions we’ve built a multi‐layered strategy to ensure our partners’ formulations remain resilient, transparent and ready for substitution without losing speed to market. Here’s how we do it:
1. Finding Alternatives and Substitutes
We treat every ingredient we utilize in formulations as having a “Plan B” (and often “Plan C”). This means:
- For each key functional or active ingredient, our R&D and sourcing teams map out equivalent alternatives when available (same INCI & performance) ahead of time, so if an ingredient discontinuation, lead‐time delay, extreme price increase or quality problem arises, we are not caught flatfooted.
- We maintain relationships with multiple qualified suppliers across geographies — reducing single‐source risk.
- We work closely with our brand-partner clients to prequalify these alternatives so that any substitution is rapid and maintains regulatory compliance and brand claims.
2. Using Technology to Monitor Regulation and Suggest Alternatives
We partner with tools like The Good Face Project to keep a constant eye on the regulatory landscape (both domestic and global) around ingredient listings, banned substances, restricted use, and emerging “clean/green” claims compliance. Some of the ways this adds value:
- AI-driven scans alert us when a previously acceptable ingredient may become restricted (in a particular region or market) or subject to regulatory review.
- The tool also suggests potential substitutes that already meet the regulatory profile, meaning we can proactively qualify those substitutes ahead of when the disruption hits.
- Because this work happens in the back end (in our R&D/sourcing infrastructure), our clients are typically informed before major disruption; we always inform them with a proposed solution.
3. Monitoring Cost Fluctuations with the Sleek Flow Labs Costing Tool
Cost‐inflation and ingredient price shocks are just as risky as outright supplier shortage because they affect brand profitability, may force re-formulation, and can erode margins. At DMI we leverage the Sleek Flow Labs Costing Tool to:
- Continuously track ingredient cost fluctuations and alert us when a cost change is material enough to warrant action.
- Trigger internal thresholds: at what price rise do we notify our client? At what point do we initiate substitution or reformulation?
- Maintain full transparency with our clients so they know exactly how much price fluctuation is impacting their product line in order to enable timely business decisions.
- Respectively, when we detect the “time-to-change-out” (i.e., the cost and risk profile for the existing ingredient is unsustainable) we bring a prepared alternative that is already qualified.
Why we can do this mostly ‘behind the scenes’
One of the key differentiators for DMI Solutions is that much of the sourcing, alternative‐map, regulation‐monitoring and cost-surveillance work is done proactively in the background, so when we notify a client it’s not just “we have a problem” — it’s “we have a problem, and we have a solution ready.” We believe this gives our clients a competitive advantage by reducing downtime, eliminating reactive scrambling, and protecting brand reputation.This invisible layer of preparedness includes:
- Alternative ingredients solutions identified and ready if needed.
- Regulatory intelligence feeds keeping tabs on banned substances, emerging legislation and claim trends.
- Daily cost-analytics so we can model price fluctuation impact fast.
What this means for brand-partners
For brands working with DMI Solutions, the benefits include:
- Faster response when ingredient shortages or cost shocks occur (rather than waiting for emergency sourcing).
- Reduced risk of production delays or product discontinuation due to ingredient unavailability.
- Better business intelligence about when ingredient cost changes require strategic action.
- Stronger market resiliency and brand continuity in an environment of rising trade-barriers, tariffs and sourcing complexity
The bottom line
Ingredient shortages are no longer a remote risk — they are part of the operating reality. From new tariffs and global trade complexity to regulation shifts and cost inflation, the contract manufacturing supply chain is under increasing stress.
By building alternative-maps, leveraging AI/regulation-monitoring tools (like The Good Face Project), and deploying cost-analytics (via Sleek Flow Labs Costing Tool), DMI Solutions empowers brand-partners to stay ahead of disruption, maintain continuity, protect margins and bring products to market with confidence.
If you’re a brand looking to lock in supply‐chain resilience in this era of squeeze, DMI Solutions is prepared — proactively.
DMI SolutionsThe Name Behind The Names You Trust.www.dmisolutions.com
Written by Steven Mason, VP of Sales DMI Solutions