Closets & Organized Storage recently spoke with Gary LeBlanc, Director - Major Kitchen Accounts at Richelieu Hardware to get his thoughts on supply chain disruptions, the industry impact, and his predictions for 2022.
What is causing the disruption?
The situation has many contributing factors: Covid-19 continues to play a role. Certain sections of China were completely closed. Europe faced closures of varying lengths. Companies reacted by trimming inventories in anticipation of a slowdown in business which didn’t happen. Demand, in fact, went the other way. Add to that a winter storm in Texas which laid waste to the petrochemical industry which is still in the process of rebuilding its facilities. The Suez Canal blockage didn’t help.
The world’s third-largest port, Ningbo China just reopened after two weeks due to an outbreak of Covid-19.
How long is the backlog? This is a tricky question since it depends on the country of origin and the commodity purchased. Suffice to say that Asia is experiencing the worst delays with the vessels, containers, and port backlogs.
What impact will the new surge in covid-19 cases have?
Until we reach a combination of herd immunity combined with a high vaccination rate, we will continue to see labor shortages.
What are you advising your customers?
Plan ahead, buy early, and consider alternatives. The worst situation is to have a certificate of occupancy open due to the late arrival of cabinets. Many companies wish to continue with their preferred brands which may not be available when needed. Consider “B, C, or D” options.
Have you changed your pricing structure and/or payment terms for clients? Prices continue to rise as a result of raw material increases. There is no end in sight at this time. My customers understand they have to raise prices.
If you manufacture products overseas, have you moved production either back to the U.S. or to different countries?
Since we are an importer, the cost of goods and importation are always a consideration when sourcing. We evaluate each product against available alternatives regardless of country of origin. Repatriation of stateside production is a consideration.
What mitigation strategies have you implemented?
Buy more, expedite and offer alternatives. With over 130,000 products, we usually have alternatives to build cabinets and keep production flowing.
What is the future of lean inventory and just-in-time product management?
We’ve had over 40 years of Deming-inspired theory of lean manufacturing wringing cost out of the supply chain. It took a global pandemic, the last of which was over 100 years ago, to throw a wild card into the mix. We are in uncharted waters these days.
Predictions for 2022?
We expect to emerge from this situation in 2022 but which part of the year is a question that is difficult to answer. My prediction is Europe will emerge from this quicker than the rest of the world.
Have something to say? Share your thoughts with us in the comments below.