“
“Our sales recovered during the second half of 2020, and now we’re focused on living up to our customers’ expectations in terms of timely responses and fast, accurate shipments,” he continues. Many of those shipments are fulfilled from the company’s own stock, which Clark says the company has been watching closely and replenishing regularly to meet customer demand. “If it’s in stock,” he says, “it ships like it always has.”
Knowing that customers facing limited choices may procure whatever products are accessible and available at the time, the company has worked to keep stock levels up while also offering other alternatives (e.g., products, brands, solutions, etc.) to customers when it’s warranted. “We’ve seen less brand loyalty,” he says, “and more ‘I’ll take whatever you have in stock.’”
In terms of supplier lead times, Clark says they’re particularly long right now for certain types of specialty equipment. Items that require more advanced componentry, for example, are especially hard to source. And if that componentry is made overseas, the lead times extend even longer. “This directly impacts the complete product build,” says Clark, who adds that some manufacturers are better
12 FEDA News & Views
The reality is that there’s a good chance we’re going to get worse before we get better. By and large, it could be spring or summer of 2022 before we start to see any type of stabilization.
Brad Wasserstrom President Wasserstrom Company
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than others about communicating those delays and collaborating to solve the problem.
“At this point, our main goal is to get timely and accurate information from our suppliers. And while that may not necessarily translate into a shorter lead time, it does help us understand where we stand,” Clark says. “If we can’t convey that to the customers, we’re going to look bad and so is the manufacturer’s brand.”
The low supply-high demand environment combined with the raw material shortages has also been driving up product pricing. Clark says these increases are “fairly constant” at this point, and that Clark Associates takes a very transparent, open approach when communicating those changes to its customers. “I’m amazed by how many notifications I’m getting about price increases,” he says. “We’ve been trying to stay ahead of that curve and not fall behind it.”
FLIPPING THE SWITCH
After months of dealing with low demand and a customer base that was forced to shut down or scale back due to the pandemic, the light switch was flipped on in February
2021 and hasn’t waned since. “All of sudden we came out of the slowdown and business was robust,” says Brad Wasserstrom, president at The Wasserstrom Company.
“Manufacturers were caught flat-footed and then hit with raw material, component part and labor shortages,” Wasserstrom continues. “Keeping up with demand was nearly impossible; once you get behind in a tight labor market, it’s really hard to get caught up.”
To avoid this inevitable issue, he says the company tried to preserve as many jobs as possible during the pandemic-driven slowdown, even if it means having to cut work hours and wages for current employees. “We were able to hold onto people that way,” Wasserstrom says. “As business activity ramped back up, we had the people in place and were able to add hours back in without having to recruit new people.”
For customers befuddled by the longer manufacturer lead times, Wasserstrom says his team works to set realistic expectations early in the process. “We’re far enough into this that we know which factories are struggling more than others,” he explains, “and/or the types of products that are taking longer to get.” For example, one company division that works with national restaurant chain franchises is asking customers to sign contracts and order equipment for their new locations before orchestrating the rest of the contract. “We’re letting them know this isn’t just a few extra days or weeks; in some cases it’s months,” Wasserstrom says. “We’re placing some POs now that have expected delivery dates in 2022, and we don’t
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