Yesterday Service Dealer held another of our regular group video calls with some senior representatives of manufactures, distributors and business service providers.
As ever, the chat afforded us the opportunity to hear from the supplier-side of the fence, regarding how they feel the industry is currently faring. We were joined by both some regular and new faces, all of whom we thank for their valuable time and the sharing of honest opinions.
Restrictions lifting
Before we got into some industry-specific issues, the subject of all remaining Covid restrictions potentially being lifted within the next couple of weeks was raised. It was asked how might this be received from an employer's point of view? What impact might the move, which admittedly isn't yet fleshed out with detail, have on the workplace?
On the whole there appeared to be an acceptance that things would be changing, and edging back towards a normality. Not to be flippant with safety, but society and business does have to move forward it was agreed. Most appeared to be wanting staff back in their offices now, at least for some of the time. Hybrid working sounded common, with staff perhaps working from home a couple of days a week.
If the mandated Covid laws are dropped in the next couple of weeks, clearly the forthcoming official government guidance would be followed, but most likely combined with individual company's own policies it was said. The sensible, commonsense approach seemingly favoured by most employers, would be to tell employees, if you're unwell, do not come in.
Supply
The conversation inevitably then turned towards the situation regarding supply - and indeed whether dealers should expect 2022 to be the toughest year they've yet faced during the pandemic.
Whilst of course there is no denying that supply is incredibly challenging pretty much across the board, we did hear a few glimmers of hope perhaps. For example we heard that for manufacturers with a small, localised supply chain, matters perhaps aren't as bad as for those working on a more global scale. For those with a situation where all their component manufacture and their end-product assembly was geographically tight, getting product made and shipped isn't apparently suffering too much.
Also shipping from the East, we were told, is beginning to see signs of being less fraught. If a shipping schedule is booked, they are being stuck to more so than has been seen these past couple of years.
Unfortunately though, whilst this is encouraging, the same cannot be said with shipping from the United States. There is still a massive backlog at the ports in America which is causing problems for those bringing in machinery across the Atlantic.
Add into this the continued unreliability of the UK haulage industry, Brexit impacts and all the other reasons much discussed, there was a clear acknowledgement that dealer demand is not being met as the network would like. We heard suppliers say they know that dealers understand why these delays are happening, and they know they get frustrated when the flow of accurate information isn't forthcoming.
There was also an acknowledgement that dealers are having to contend with the difficulties caused by regular price rises. Whereas prices used to be perhaps set for a year, they are now changing every couple of months - almost at the factory gates we were told. These cost increases of course effect the whole chain, but it was said how dealers are particularly sensitive to the rises.
Just in time to end?
These delays in getting stock into dealers' showrooms and subsequently into customers hands caused by breaks in the supply chain, could be blamed on the 'just in time' culture that manufacturers have relied on in modern times. When there's no fat in the system, as soon as one link in the chain is forced to stop, the knock-on impacts everything and everyone.
So the question was posed, is it therefore reasonable to assume that 'just in time' has been proven to be flawed and systems will change in the future? It certainly sounded like an idea that companies had given some consideration to.
However, whilst there appeared to be some thoughts amongst those we spoke to, that systems might adjust to a degree to build in more buffers, the problem is that 'just in time' has proven to be profitable. Whilst the events of the last two years have shown that operationally it can cause breakdowns, for the bottom lines of these global manufacturers, it works.
So will we see huge storage facilities appear over the coming years, teeming with mountains of stock, in preparation for any unforeseen future crisis? I don't think the network should hold its breath.
Shows
The conversation finished off yesterday, with a subject much discussed these past couple of years, the current state of play with trade shows and events.
From hearing our panelists speak, it felt like we have almost come full circle on this subject. When we all retreated into lockdown a couple of years ago, all the talk was there were too many shows and this enforced break could be a positive move to rationalise the number taking place each year - besides, everything a physical show offered could be replicated over Zoom!
It certainly feels like that opinion has shifted now. Not necessarily about the number of shows, but certainly about the value of a good, real-life show. People spoke positively about last autumn's SALTEX and there were remarks made about looking forward to next month's BTME. The new timing of LAMMA in May was questioned perhaps, due to how busy farmers will be - but the principal of the opportunity for in-person meetings once again, certainly seemed to be back in favour.
In fact for companies new to the scene, exhibiting at as many relevant national shows, and at local events with local dealer support, was seen as vital in getting their name out there and established amongst both dealers and end users.
So for dealers keen to catch up with their suppliers, a trip out to a trade event or two this spring, could be well worth their while.
