It’s safe to say that 2020 was full of surprises. Companies everywhere simply did not know how the pandemic would affect their business. As it turns out, the green industry was considered essential, and business stayed steady with demand growth in many sectors, mainly due to the large shift toward working at home.
The industry also got a boost as discretionary spending transitioned away from normal activities such as dining out, concerts, sporting events and vacations, over to home improvement. The "cocooning effect" helped the green industry grow in 2020, with outdoor living investments topping the list of spending.
However, supply chain disruption was a large obstacle in 2020. Limited product availability and increasing lead times were common for most products regardless of category. Consumer demand outpaced domestically available inventory, driving costs higher and making lead times longer.
As we head into the busy spring season, we will not have the luxury of an already full supply chain to lean on. Any and all disruptions are now negatively impacting businesses up and down the supply chain. Here are five strategic tips to help you stay ahead of supply chain issues in 2021.
Exercise Product Discipline
One of the best ways to manage supply chain disruption is to work closely with your supplier and try to use core products on your projects. By designing high velocity, deeply stocked products into your installs, you ensure a much better fill rate on all material needs.
Even if your local branch location is out of this type of product, there is a much better chance there is depth of stock within the company, if not locally available then already on order in larger quantities. When you deviate from core products into boutique colors, styles or one-off options, availability typically suffers and lead times increase.
Leading your clients down the most convenient and available path serves everyone in the long run. Working closely with your distributor of choice will go a long way toward understanding lead times and setting client expectations in this more volatile supply chain environment.
Incorporate Design Flexibility
Basically, have a back-up plan. Availability disruption will continue throughout this year, so make sure you have an alternate in mind for each part of your project. Many times, client expectations are more dependent on timeframes than product selection, so make sure you fully understand your customer expectations and have a contingency plan should delays occur.
Your distributor partner should be able to help you with current expected lead times. By being flexible and proactively communicating up and down the supply chain, a volatile market climate can work in your favor, differentiating you as a professional against your competitors.
Plan Ahead of Need
Given longer lead times on all products, it is imperative that you stay ahead of project needs. Nothing is worse than delaying the completion of a project due to lack of material.
In much of 2020, containers out of Long Beach, CA, typically took a week to 10 days to reach rail for transport, and current estimates are 30-45 days. This affects not only finished import goods but also parts and materials used to manufacture goods domestically. Businesses everywhere are investing in inventory earlier and deeper than normal in an effort to insulate their supply chains.
Early, proactive communication of project-based needs will make for a much smoother installation schedule. Ask questions about project-based lead times prior to making commitments to your clients. Decision making based on realistic timelines will make customer satisfaction much easier.
Buy Early for Upcoming Projects
Along with increasing material costs, supply chain is experiencing equipment and labor shortages as well. Petroleum costs are increasing rapidly, and there is a shortage of containers and vehicles to move product to the point of distribution. For every 8- LTL orders, there is only one available truck or driver.
Manufacturers typically try to avoid mid-year price increases, but that is exactly what we are anticipating in 2021. When manufacturing and fuel costs are up, along with freight being at a premium, all goods, regardless of category or services, will cost more. Buying early prior to cost increases can offset future costs or capital investment in many cases, saving you money and assuring you have what you need when you need it.
Increase Product Expansion
One of the best ways to increase profitability within your business is to diversify your service offering with your current clients. Adding new products and services to your business not only enhances your earning potential but can be served as new products and services when offered to clients you worked with in the past.
Adding landscape lighting, bistro lighting, water features, outdoor sound and other "layers" of lifestyle enhancement can make you more profitable on every project. There’s also the benefit of not leaving your client wanting for something you could have offered them.
Offering a diversified product and service portfolio also allows you to maximize your time. Installing an incredible outdoor sound system can buy you time while you wait for the landscape lighting or water feature materials to come in, all without causing a visible disruption felt by the client.
Incorporating holiday lighting services can provide your company much needed offseason revenue, as well as help to retain your employee base year-round. In turn, this protects your investment in employee training and maximizes your ability to maintain face time with your clients, helping your business grow year over year.
The outdoor living consumer market is strong as people continue to invest in their outdoor spaces, and this trend should persist throughout 2021. By applying these five strategies, you can help offset disruptions that you might experience in the supply chain this year. Visit your local Ewing branch for details about product availability, features and lead times.