March 4th, 2021
Vendor Report Cards
It is no secret that 2020 was a tough year on the supply side of the economic equation. When the pandemic first reared its ugly head in March of 2020, some in the industry were expecting the worst. Then, the year that many assumed would surely be a bust actually turned out to be a boom. Key suppliers to the industry reacted in different manners. When the smoke cleared and the trajectory was clear, some vendors—who had over-adjusted to what they perceived as a bust—were caught with their pants down. Valuable employees, who were let go, were not so easy to get back. With the fenestration industry struggling to keep up with orders, many door and window fabricators experienced significant delays, shortages and quality problems when it came to obtaining key materials and components that are the lifeline of their businesses.
So, as a result of the trying times of 2020, many door and window fabricators have been pondering the performance of their key suppliers to determine how well they handled bumps in the road – call these “Vendor Report Cards,” if you will.
After talking to a number of fabricators, there are three main grades they have been considering on their vendors’ 2020 report cards.
- On Time Delivery: If your stated lead time was 10 days and you delivered in 20 days, then your grade here definitely suffered. Sure, given the surge in demand and the shortages of available manpower, increases in lead times were to be expected. But some suppliers were able to keep lead time extensions to a minimum. These suppliers were the ones who retained their employees and had strong relationships with their own raw material suppliers. Strict protocols on allowing visitors into manufacturing plants really helped here, and quick action if an outbreak did occur also was vital to keeping a reliable production flow going. Needless to say, every single component of a door or window is vital, and fabricators needed each and every part to ship on time. Depending on how much safety stock was maintained, even a delay of a few days could have shut down a window fabricator, possibly costing the company irreversible damage in the marketplace.
- Quality: When manufacturing was stretched to the limit and employees were in short supply, quality was bound to take a hit. If the vendor caught problems before they got out the door, it affected their own scrap and wastage rates. Yes, this impacted short term profitability but was able to be eventually overcome. However, if the vendor let the bad stuff out the door, it impacted their customer’s productivity as well as ability to meet on-time deliveries. Once again, this could have caused your customer’s reputation in the marketplace to suffer a vital blow. So, do not expect your customer to perform the quality control that you should have done in your plant. If you did so, then your grade here will not be so good.
- Communication: This is perhaps the most important category of all and a good grade here is absolutely essential to maintaining your customers’ trust. If you saw your lead times were going to be extended and you were smart enough to communicate this to your customers in advance, then you allowed them the opportunity to make adjustments on the ordering side of their businesses so they could minimize any interruptions in supply. Also, vendors which obtained periodic forecasts from their customers were operating ahead of the curve so they could plan production schedules accordingly. When problems surfaced—whether delivery, quality or otherwise—those vendors which kept in constant communication with their customers achieved the highest markings here. Indeed, this is the one category that meant the most in the overall mix of events. “In times like these, everyone is going to have problems, but it was how you handled those problems and communicated potential solutions with your customers that made the difference,” stated one plant manager.
Despite supply and quality issues, many manufacturers were hesitant during the course of the year to make changes in the heat of the battle. However, vendors with high grades on their 2020 Report Cards may find themselves gaining additional business this year at the expense of competitors that did not score so well in what was one of the most challenging years this industry has ever seen.