Battling the Supply Chain Woes
Qianyan Cheng has felt the sting of the industry’s historic supply chain disruptions.
The co-founder of INOX – the Sacramento-based supplier of decorative hardware and door locks – Cheng has reported lengthy shipment delays of international goods since the onset of COVID-19. Shipping costs, Cheng tells Kitchen & Bath Design News, have risen exponentially in the face of the public-health crisis. The growing backlog of cargo ships waiting to offload in key ports, she says, has increased more than fourfold in some cases, impacting distribution throughout the company’s worldwide network of upscale hardware showrooms. Related bottlenecks have delayed remodeling and new-construction projects for months – or postponed them entirely.
And Cheng, of course, is far from alone.
Indeed, supply chain disruptions wrought largely by the coronavirus continue to prove a major impediment across virtually all segments of the kitchen and bath industry, including dealers, design firms, manufacturers, importers and building/remodeling construction firms.
In some instances, the supply chain timeline has doubled or tripled due to increased demand coupled with port closures, worker shortages and travel restrictions, as well as vaccine and testing mandates for seafarers, truck drivers and other transport workers. Design firms are witnessing increasing lead times, raw material scarcities and double-digit price hikes for certain products. Labor rates have skyrocketed in the face of worker shortages. Cancellations and postponements have increased, with clients opting to put projects on hold until wait times and costs normalize. At the same time, a sizable number of manufacturers report ongoing capacity restraints, a scarcity of raw materials and the discontinuation of slow-moving product lines to alleviate production constraints.
Equally vexing is the likelihood that the current disruptions will linger well into 2022, and perhaps beyond, despite growing appeals for corrective action.
To wit, the Association of Home Appliance Manufacturers, the organization representing many of the industry’s leading appliance suppliers, last month lent its support to a coalition of trade associations urging government policymakers to address ongoing challenges that business leaders say are damaging the competitiveness of manufacturers, stalling America’s economic recovery and resulting in unprecedented damage to the global product supply chain. AHAM’s call for action, following a similar appeal by the National Association of Home Builders, came one day after a coalition of workers from across the supply chain warned that global trade is facing a potential system collapse if world leaders fail to restore freedom of movement to transport workers.
While some supply chain challenges – such as import tariffs – require long-term, systemic solutions, others can be mitigated by kitchen and bath dealers, designers and remodelers who are willing to temporarily alter their business approach.
For example, many design firms report that they’ve become adaptive to current supply chain challenges, ordering products months in advance to circumvent long lead times and lessen the sting of price hikes. Others say they’ve ordered materials as soon as project contracts are signed, even if a job is weeks out, or have stocked up on commonly used products in an effort to reduce delays. Still others are offering clients alternative products that are easier to obtain or already in stock. Frequent and candid communication regarding extended lead times, back orders and volatility in delivery dates has also become more critical than ever in managing client expectations and preserving relationships, dealers and designers say.
The kitchen and bath design trade has faced a multitude of challenges over the course of its existence. The advent of big box stores and e-commerce has altered the industry’s competitive set. Corporate bankruptcies, ownership changes, factory closures and divestitures have reshaped the manufacturing and retail landscape. Fast-changing lifestyles, homeowner demographics, product introductions and consumer hot buttons have exacerbated the need to stay abreast of what’s going on. Economic downturns have occasionally knocked the industry on its heels.
Astute dealers and designers, for decades, have proven resilient to these and other changes. They’ll doubtless discover ways to survive the current supply chain disruptions, as well.
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