Supply Chain & Market Challenges
It’s no secret that many parts of the global supply chain have been disrupted by the pandemic. From toilet paper to chicken dipping sauces, gasoline, construction products, and electrical components, it seems that no industry sector has been spared from shortages, delays, and price increases on vital materials and supplies. What makes it even more difficult is that consumer demand has remained high for many finished products, making it that much more challenging for manufacturers to meet lead times and price quotes. There is simply no way to sugar coat the fact that many manufacturers are struggling to get the parts they need to make their products on time, and at a price that allows them to be competitive.
The steel industry has not been immune to these issues during the past twelve months. According to spglobal.com, US HRC (hot rolled coiled steel) prices have surged by nearly 210% since August 2020, shattering previous records set in 2018. The run up in pricing has been spurred by sparse service center inventories, tight mill order books and a lack of imports since the fourth quarter of 2020.
It’s not just US HRC that has increased, but US CR Coil, Galvanized Coil, and Plate Steel have all more than doubled since November of 2020. This graph shows the market trends from January 2010 to the present.
Meeting These Challenges Head-On
As a consumer and business owner, you might be wondering, what are manufacturers doing to counteract these negative trends in the marketplace and supply chain, other than raising prices or delaying shipments? Or, you may be asking, how does this affect me at all?
When you go to purchase, lease, or rent your next baler or compactor, you may find that your supplier has raised prices or cannot meet your minimum lead time requirements. Worse, they may not honor their initial price quotes due to rising costs or delay the shipment of your products for weeks or months without communicating with you. And, just as frightening, some may turn to new vendors for less expensive, market ready parts that have not been properly vetted for longevity, efficiency, or safety. This includes turning to overseas markets for a lesser quality steel not Made In The U.S.A.
Harmony Enterprises, Inc. the Minneapolis-St. Paul Family Owned Manufacturer of the Year, is taking many steps to ensure that our quality balers, compactors, and replacement parts are being produced to specification and in a timely manner.
Here are just some of the things we are doing to meet the current supply chain and market challenges:
- We will honor our price quotes for the full duration of their established terms. Some manufacturers are reducing the length of their quotes to less than a week due to the current circumstances!
- We will not bury the additional cost of our steel into our equipment, only to leave it there when the market relaxes. Harmony is transparent with the way that these increases affect the cost of equipment, providing a clearly marked steel surcharge fee on each quote. This fluctuates with the market, ensuring that you are not paying more for the steel in your product when costs are down.
- Harmony’s Purchasing Department is working daily with vendors and partners to ensure timely delivery of essential components. We forecast projects well into the future so that we can continue to work with our valued partners, getting the quality goods we expect for our products. We will not sacrifice quality, integrity, efficiency, longevity, or safety for the sake of getting a part cheaper or faster.
- We continue to manufacturer our products in Minnesota with steel and components Made In the U.S.A. Over 90% of our component parts are sourced from suppliers located in the Midwest of the United States.
- Our Customer Service and Sales Teams consistently communicate with all of our internal and external customers regarding lead times, delivery dates, install requirements, and more! If there is an unexpected change, you can be assured that you will be made aware of it in advance to reduce any negative impact it may have on your planning or operations.
Brighter Days Ahead!
At Harmony, we believe that its important to be open and honest when things are going well in the marketplace, and when there are problems that affect all of us. We don’t think it’s right to bury price increases as hidden costs that remain when the market relaxes. We also know that there are better days ahead!
We were here before the pandemic, have safely navigated through it as an essential business, and will continue to use our Proven Process to provide the right waste and recycling solutions for your business. We continue to develop innovative solutions that help businesses improve on efficiency and safety, while improving the customer experience. Be sure to keep an eye out for our latest product release coming this quarter. You won’t want to miss it!
If you have questions about how market volatility and supply chain issues can affect the manufacturing of waste or recycling equipment, or need help selecting your next baler or compactor, or need service for your existing machines, please call us at (507) 886-6666 or Contact Us today!