Industry Wide Supply Chain Challenges : Update January 2022

 

Further to our last update in September, this article is intended to summarise the latest situation with regard to the pressures that the Double Glazing industry is facing in the wake of the return to business post Covid 19 lockdown.

The huge rise in demand for Double glazing, conservatories, home improvement products and services continues unabated. This is extremely welcome news. The fact that homeowners are feeling so confident that they are investing their money in their homes in their droves is very encouraging. All trades are reporting the same trend. Anybody who knows a plumber, tiler, electrician or roofer will tell you that everybody is extraordinarily busy at the moment – with most trades already fully booked up until way into mid 2022. This is unprecedented.

As always, a huge upsurge in demand produces many challenges. The double glazing industry is in the grip of many evolving challenges currently – mostly in relation to the supply chain which feeds the whole process. We have written before about the issues that we have been facing. Over the last few months these challenges have become even more pronounced. All of our suppliers are struggling and we sympathise with their current situation as we can all understand their predicament. In order to highlight how difficult things are currently we have picked out just a few examples of things that have happened over the last few months which help to illustrate the current situation:

 

Examples:
Sand & Cement - we have had to start stocking even the most basic building materials such as sand and cement. This is as a reaction to the news that these items are in short supply. We have never carried stock of sand and cement before. Basic items such as these have always been in plentiful supply to pick up on an as & when needed basis

Chrome Hardware - which has been fairly easy to source for years since its introduction is now extremely difficult to get hold of. Our suppliers are all reporting that all coloured products in particular are subject to extraordinarily long lead times. Profiles in special colours that we could source within a day or so are now being quoted on 6 week lead times. Bizarrely and conversely it’s sometimes the case now that we place forward orders for goods which we are told are out of stock – only to find that we then receive the goods the following day. All of this suggests that our suppliers are struggling with their own suppliers and there is a lack of communication throughout.

Silicone - has risen in price by 300% over the course of 2021. This is due to a severe lack of global raw materials and this trend seems set to continue. We cannot source enough silicone currently to keep all installation teams fully stocked. We find that all our suppliers are in the same position and they have all decided to ration supplies to each of their customers to ensure everybody has some product to function with. 

Force majeure - is a contractual clause [which to be honest we have never come across previously in our 40 years of trading] which is used to describe a situation which essentially frees companies from liability or obligation from each other when an extraordinary event or circumstance beyond the control of the parties prevents them from fulfilling their obligations under the contract. This term is being used frequently in our supply chain nowadays. In our opinion, the fact that this term is being bandied around so frequently is a good indication that things are nowhere near getting back to normal any time soon.

Glass, Steel & UPVC - which are the basic fundamental ingredients of the double glazing industry have been difficult to source in a predictable way for a number of months now. Basic lack of raw material supply coupled with a strained transport network and a huge upsurge in demand is proving to be a perfect storm for the supply chain to cope with. Suppliers have almost retreated into their bunkers and re-focussed on their basic product offering. The upshot of this is that anything that would be considered a ‘special’ item is not getting prioritised any more by them. Out of pure necessity, suppliers are simply refining and consolidating and concentrating on the 80% of their business that keep them running and giving less attention to the 20% that causes them huge extra challenges.

 

Overall:

The whole supply chain needs to be synchronised and joined up – however, due to the deep lull in 2020 and the subsequent explosion in demand in 2021 it’s obvious that the supply chain simply can’t cope and is creaking under the pressure. The following is directly copied from a statement from one of our suppliers and gives a good insight into the way things are currently:

 

“The volatile climate the world still finds itself in has brought many challenges to our industry and continues to do so on a daily basis. Global supply shortages caused by an extremely high demand of raw materials, packaging and transport have all contributed to these challenges with no definitive answer as to when normal service will resume. During these extreme circumstances, Sika Everbuild has received hundreds of force majeure price increases on a wealth of raw materials, with these exceptional increases having a great impact on the business.”

 

 

How does this affect me?

At Finesse, we pride ourselves on the predictability of our service. Our aim is always to plan our work with precision & fulfil it with professionalism on time every time. However, due to the severe lack of predictability in the supply chain we are simply not able to provide our usual level of predictable service currently. This is extraordinarily painful for us at the moment. As with many things post Covid 19 – we are constantly having to react and reinvent our processed in order for us to stay at the forefront of our industry in terms of quality of product and quality of service. Everything we do is implemented with our customers’ experience firmly in mind and is purely designed to improve the service that we are able to offer in these exceptional circumstances. We recognise that this may cause some challenges for some customers and we are very keen to discuss this with anybody that requires some further information, please contact us directly on 0121 451 3724 if you require further information on any of the issues discussed here.

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