INSIGHT | Supply chain health check
‘GETTING
Retailers have been adapting to supply chain problems since Covid struck. Three years on, the consensus is that things are getting better even if they are not fully back to normal. Chris Frankland looks at the steps manufacturers have been taking to overcome the challenges
KBB supply chain that we are still feeling the effects three years later? The good news, however, is that according to leading KBB experts and retailers, the situation seems to have got better and is steadily improving.
W
Appliances were hit hard by the closure of the factories in China that supplied the vital chips and components required. Raw materials used in manufacturing furniture, appliances and bathrooms were also affected, while manufacturing in Europe and the UK was also temporarily disrupted. Then the war in
Ukraine added
disruption to the supply of china clay (tiles) and urea (chipboard). And when showrooms began to open up again, the industry was hit by the double whammy of house-bound
30
ho could have foreseen that a microscopic virus would so devastate the
consumers on a home-improvement rampage. Retailers and manufacturers were left struggling to cope with this pent-up demand and lead times went from weeks to months, or even a year. Lead times like that seem to be a thing of the past as manufacturers have worked hard to build up stock levels by increasing warehousing and production capacity and finding alternative sources of supply for raw materials and components, helped by slowing consumer demand. Paul Hide, chief executive of appliance manufacturers association
BETTER all the time...’
Amdea confirms this, saying: “The
pressures on supply chains have significantly eased over the past six months or so and our evidence is that non-availability or long lead times are now rare. This has been achieved through a mix of improving component availability, a slowdown in the global demand for appliances from the boom years of 2020 and 2021 and the move by China to end the cycle of lockdowns and factory closures that occurred as a result of pandemic countermeasures.” This is borne out by Bill Miller, MD of the KBBG buying group, who says: “The feedback from our members is that the supply chain issues have significantly improved over the past few months. Although not back to pre-Covid levels, products are now
Our members tell us that they do not expect to fail to meet the demand requirements from their customers
based on the collaborative forecasting for this year, so we see no evidence that market opportunity will be constrained by limited supply
Paul Hide, chief executive, Amdea
coming through on much shorter lead times and where there are still issues, there are usually alternatives available.” In the bathroom sector, Bathroom Manufacturers Association (BMA) CEO Tom Reynolds also reports an improving picture. “Given the bag of issues, bathroom suppliers have been incredibly agile and have tried to minimise disruption to customers as much as possible,” he explains. “This year, lead-in times in the bathroom sector are largely back to pre-pandemic levels.” Paul Wheeler, sales director of buying group MHK, also thinks cooling demand has helped. He says: “My feeling from evidence I see is that the combination of reduced consumer demand across Europe and improving supply has resulted in the overall situation improving.” The KBBG’s Miller also agrees reduced demand has “given manufacturers the opportunity to catch up and rebuild stocks”. So what have manufacturers been doing to mitigate the disruption? MHK’s Wheeler says: “Among appliance manufacturers, we have seen production of core products
• April 2023
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