Vaccinations are up, cases are down, and the world is beginning to re-open. So where’s that appliance you ordered months ago? Why is the global supply chain still such a mess?
By Kelly Phillips Badal
Sick workers. Factory shutdowns. Shipping delays. Steep tariffs. Lost products. Backlogs. Raw material shortages. It’s not one problem that’s disrupting the global supply chain, it’s dozens of them causing chaos in a domino-effect-style breakdown.
Delays have cut across categories in the home design world, from the kitchen appliances and bath fixtures Snyder Diamond primarily specializes in to furniture, tile, upholstery and more. And initial lag times caused by Covid-related shutdowns that ramped up a year ago are now compounded by a huge surge of interest in home renovation nationwide—among a litany of other factors that includes even the recent blockage at the Suez Canal. In general, items that used to have a three-month lead time now have a five-to-six-month lead time...or more. Which is incredibly frustrating, no matter where you fall along the chain.
So here’s our breakdown of what’s happening on the grand scale, how it’s affecting us here in Southern California, and how we’re responding to it.
What Factors Are Causing These Long Lead Times?
Covid-19, of course, is the underlying factor that has caused—and continues to affect—supply chain disruptions. “When workers in factories get sick, whole sections of plants shut down, which then backs up production,” explains Patrick Gunn, one of Snyder Diamond’s Appliance Specialists. In addition to shutdowns occurring from exposure-related reasons as well as preventative measures, companies are navigating a host of new safety protocols—further delaying their return to full production. Today, many major manufacturers still aren’t staffed at their full pre-pandemic capacity, which makes catching up on a growing backlog of orders even more challenging. Plus, the web of connections between companies has also become devastatingly clear. For example, if a dishwasher is missing a key part made in a closed down or severely backed-up factory elsewhere, those machines must gather dust until those missing pieces arrive—no matter how many consumers clamor to buy them. Freight costs are also soaring amid a sky-high demand for products, too. BBC News recently reported that containers from China are averaging between $7,000 and $10,000 per container, compared to pre-pandemic prices that hovered around $1,200. Limited global flights from Asia and Europe and a backlog at ports (yes, the Suez Canal fiasco included!) have also had an impact on costs and delivery times. There’s also a scarcity of raw materials (from steel to foam), a general shortage of shipping containers (due to a 30% rise in demand for import cargo), even a streak of bad weather that’s caused hundreds of containers to sink to the bottom of the sea. “A lot of our items are made outside of the United States, so this has caused huge delays for us,” says Lars Ottosson, Snyder Diamond’s VP of Operations. “It’s a perfect storm, but we’re trying our best to weather it.”
How Is Snyder Diamond Responding To Product Delays?
“We want you to know that this is a global crisis, something that’s affecting our whole industry, as well as the transportation industry, manufacturing and more—it’s a worldwide problem,” says Sergio Ramos of Snyder Diamond’s Purchasing department. The company is casting a wide net for information and products, staying in touch with hundreds of reps for various lines daily, and has even been ordering units ahead of time to try to get ahead of the issue. “We’ve done a pretty good job about bringing in replacement models comparable to what we typically sell,” says Ramos, noting that Snyder Diamond has had particular success sourcing alternative dishwashers and refrigeration systems. “We’re also trying to proactively bring in product ahead of time on a higher quantity level than we've ever done before—even though we know that we’ll be suffering in our warehouse with limited space,” he adds.
Acknowledging the issue and being realistic about the timelines is also a major part of SD’s response. “Everybody here is quite straightforward with what's currently happening, and we’ll say to you, ‘Here’s a second option, here's a third option, here's the lead time for all of these,’” notes Ramos.
How Can Anyone Make the Most of The Current Situation?
Whether you’re a designer ordering products for a client install or an individual upgrading or replacing an item, put your order in as soon as possible. We’ve even heard of some designers advising their clients that for a holiday install, their items need to be ordered by April or May—and we agree! Unfortunately, delivery timelines are still fluctuating, and it’s beyond our control. We’ll keep you informed, tap our network on your behalf, and find alternatives for you. But we ask for your understanding and patience, too. “I actually had a customer exclaim to me recently, ‘What do you mean I can’t get a SubZero?! This is America!’” says Gunn. “But right now, we’re facing a lengthy nationwide backorder that we’ve never seen in our lifetimes.”
So When Will Things Get Back to Normal?
That’s truly the million dollar question. Factories currently operating at 30 to 40% of their capability can’t suddenly return to full-speed overnight. Shippers and truckers can’t suddenly rehire and retrain employees at a moment’s notice. Multiple factors still point to delays continuing to plague our industry throughout the next year. Some experts are betting that conditions will improve from this summer onward, but long backlogs also simply need time to clear. But we’re certain that we can navigate these changes.
“There is a light at the end of the tunnel, so we need to stay hopeful,” says Gunn. “At Snyder Diamond, the most important thing we feel we can do is to set expectations early in the selling process when it comes to lead times. We want our customers satisfied, and we’re exploring every angle to make certain that happens.”
If you have a question concerning product availability, an order status, or lead times, please give us a call, or submit a ‘contact us’ form.