Understanding Supply Chain Challenges
Back in April, my husband and I started the process of replacing the windows in our home. I say "process" because it turned out to be quite the summer journey. We waited for parts and then labor. Twelve weeks later, we finally had our windows.
The delays we experienced seem to be the norm these days. The supply chain isn't just broken, it appears COVID-19 grabbed hold of that chain and shook it until it shattered into a million pieces. I spoke to one chemical manufacturer who was reminiscing about the peaceful predictability of 2019 before sharing the volatility and unprecedented challenges they have experienced since the start of the pandemic.
Demands for cleaning products and equipment are at an all-time high, but distributors find themselves on a roller coaster when it comes to meeting the needs of their customers. Reliance on manufacturers with overseas factories caused shipping delays. Price fluctuations put a strain on already tight budgets. Weather disruptions made allocating commodities a challenge. And then there is the driver shortage and labor issues to contend with.
In our cover story, we explore techniques distributors can use to manage the demands, but it won't be a one-and-done fix. Shipping will continue to be a challenge as international exporters are reportedly gouging purchasers, or even keeping supplies for themselves. In an attempt to eliminate the problem, some manufacturers have shifted production back into the U.S., but the overwhelming demands coupled with national trucking/transportation shortages continue to stall the process.
In addition to delays, these new realities are coupled with hefty price tags and tough decisions for distributors. What price increases can you absorb in order to maintain customers and which fees will you be forced to pass on? Some companies have been successful with adding surcharges — a suggestion that the increase is temporary. Some continue to absorb what they can in an effort to keep customers happy. Others use COVID-19 as a crutch and pass the expense down the line — a reality already familiar to many of us.
No one is certain what the future holds for the supply chain, but unfortunately, I doubt it'll be repaired any time soon.
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