Here we are in the early fall of 2022 and seeing gradual improvements in the global supply chain issues. At this point, many have received emails or texts informing us that deliveries have been “delayed” or discovered that alternate options are out of stock. Few companies have avoided these challenges, but some are doing better than others.
Among those most impacted by delays in shipping are the commercial and residential building industries. First, wood and steel continue to fluctuate. Then, doors and windows of all sizes fail to arrive on time. Finally, when the building is close to completion, you may discover that door locks have a lead time of over six months.
In addition to supply chain issues, building materials prices have increased 19.22% since May 2021, and 35.6% since the pandemic began. Ask any construction management team about materials, and you will hear about inflation, delays, back orders, or out-of-stock issues. Finally, the cost of materials has trickled down to manufacturers, resulting in price increases or surcharges that have left apples-to-apples products at lopsided pricing and varied availability. While this wild ride has no clear end in sight, it is clear that the time has come to shore up who your suppliers are and what is most important about these relationships.
The Port of Los Angeles strongly indicates a more extensive global outlook
When we check in with the Port of Los Angeles website, we see a snapshot of their challenges. For example, there are articles about continued COVID restrictions overseas, the ongoing shipping backlog, and the labor negotiations between a big longshoreman union and its employers.
The good news is that the flow at the Los Angeles Port is improving and supply chain issues aren’t as severe as they were. The backlog of cargo ships to unload was 109 in January of 2022. In May of 2022, there were just 32. In addition, the negotiations between Pacific Maritime Association and the International Longshore and Warehouse Union have been extended, and employees have continued to work with no walkouts.
On top of that, POLA had the best June in the port’s 115-year history and moved 875,711 Twenty-Foot Equivalent Units (TEUs).
“We’ve been able to reduce the number of vessels waiting to berth by 75%, allowing dock workers to efficiently process more vessels,” said Port of Los Angeles Executive Director Gene Seroka. “We’re handling back-to-school, fall fashion, and year-end holiday goods. Despite inflation and higher-than-usual inventory, we expect cargo volume to remain robust in the second half of the year.”
When we venture away from the Port of Los Angeles and listen to some of the voices within the building industry, it also appears that the ability to schedule and plan projects is challenging. A few issues creating these difficulties are supply chain issues, price fluctuations, and warehouse space.
How We Respond to Supply Chain Issues at TownSteel
Amongst the many unknowns and fluctuations of the door hardware industry, TownSteel’s leadership employs an assortment of practical solutions. For example, using high-density racking systems to buffer inventory when lead time gets stretched out, Co-Owner Dennis Ma simply states, “I think I’d be better stocking more and being ready to take orders.”
TownSteel is among many manufacturers that are having conversations about practical solutions to the current supply chain issues. Here are a few options to weather the storm:
- Sticking to developed relationships with few forwarders instead of jumping from one to another to save a few dollars on ocean vessel cargo space
- Leveraging long-term partnerships for preferential production scheduling
- Improving warehouse racking and storage capacity
- Increasing stock on hand to avoid delays getting product into the marketplace
- Supplying customers with information in real-time and understanding the urgency of the needs of customers
We have all heard that patience is a virtue, and those of us in the building hardware industry must be virtuous. While we collectively may not be enjoying balanced supply and demand around the globe in the immediate future, it is time to adapt and look ahead further.
If your efforts to leverage long-term relationships have not improved your lead times, find someone who has: it may be the fresh start you have been looking for.
