August 20th, 2020
Overcoming Component Shortages: Four Ways to Deliver on Time
With the industry currently experiencing a sharp uptick, one of the challenges that has recently presented itself is raw material shortages. With the onset of the pandemic, some raw material and component suppliers were too quick to cut staff only to realize 60 days later that the fenestration industry is somehow benefitting from the stay at home situation. Some companies conducted temporary layoffs not knowing that legislation would soon be passed to encourage laid- off customers to stay home, collecting unemployment benefits until they feel safe to go back to work. As homeowners cancel or downsize vacation plans and decide to use more funds on home improvement, we now find ourselves with a significant spike in orders, but with a severe shortage of people to work in our factories.
So, what do we do and how do we react as material and component suppliers when we find ourselves extending lead times and potentially causing shortages for door and window fabricators? What do we do when these situations cause our customers to have to do the exact same to their customer base – extend lead times!
Number One – React with a sense of urgency. When a customer calls upset about a delayed order, he or she needs to know that you are taking the situation seriously. It is important to empathize with the customer to let him or her know that you are just as upset as they are about the situation and that you are going to do everything in your power to get them product as soon as possible. Nothing upsets a customer more than an “It is what it is” attitude on the other end of the telephone.
Nobody expects perfection. Everyone knows and expects that problems will pop up from time to time. But it is the manner and especially the speed with which a company reacts to the problem and executes corrective action that counts! So once the product is finally finished and available to ship, get the product expedited to the customer at no additional cost to avoid a production shutdown on the customer’s end.
Number Two – offer alternatives. Perhaps you have a similar product in stock that could temporarily substitute for the out of stock product. Most customers would rather accept a substitute as opposed to having to falling into a back -order situation of their own. Perhaps you have stock of the same product in a different color or a higher grade and you can offer it temporarily at the same price. Take the time to discuss these alternatives with your customer so that he or she is aware of “any and all” alternative solutions. Usually a customer will prefer any reasonable solution that avoids shutting down the flow of finished goods in his factory.
Number Three – discuss potential solutions. What can be done to prevent further outages in the future. Can your customer supply an updated forecast? Accurate forecasts could potentially help your production department to stay ahead of the curve. Is your customer interested in setting up a stocking program whereby a certain amount of “safety stock” is kept for them on the floor? Such programs do not come without a cost, but perhaps this cost is preferable to your customer over him disappointing his customer and potentially losing business for good. It is ten times harder to win back a lost customer than it is to land that customer in the first place.
Number Four – empower your employees to satisfy customers. So, how does a company excel in the eyes of the customer even in the face of problems and come out smelling like a rose? Well in such situations where outages and late orders occur, it is a decentralized management structure that is often the key to implementing a customer solution quickly and effectively. If the customer service representative, salesperson or production manager sees a solution to get product to the customer in a more -timely manner, then empower them to make it happen. Empowering employees creates an organization that is quick on its feet and one that can respond to get things done faster, cheaper and better.
It will be some time before the entire labor pool is once again available for the door and window industry. Heck, it wasn’t that great before the pandemic. So, as an industry, we need to learn to work smarter to produce materials and components faster, cheaper and better to meet the current demand surge. These four factors are something to ponder!