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Navigating the ever-changing supply chain (Part 2)

By |  August 19, 2021
Says Volvo CE’s Tony Spake: “You obviously have to manage costs in a much smarter way, monitor the industry and adjust over the next year.” Photo: PamElla Lee Photography

Says Volvo CE’s Tony Spake: “You obviously have to manage costs in a much smarter way, monitor the industry and adjust over the next year.” Photo: PamElla Lee Photography

The following transcript was edited from one of two concurrent discussions at this year’s Pit & Quarry Roundtable & Conference. This discussion was edited for brevity and clarity.

P&Q: The list of items that are in short supply across the U.S. this year is staggering, from steel and lumber to fuel and microchips. Pricing on these goods is up, too – and, in some cases, it’s up exorbitantly. Producers: What material shortages have you experienced of late, and what is the short supply doing to prices? Are shortages having any trickle-down effect on aggregate production? How are you working with equipment suppliers to overcome material shortages? Equipment suppliers: Are material shortages creeping into manufacturing, and what are your short-term workarounds to address shortages? What are lead times currently like?

SCOTT DICKSON (HANSON AGGREGATES SOUTHEAST): We’ve experienced shortages already on off-road tires, filter media. We’re advancing our orders on manganese liners by three to four months over what we normally do. We’re competing to find steel and fuel. We are having to be far more aggressive in ordering earlier in the year in trying to secure greater inventories in our yards and not rely on supply chains that their vendors may or may not have. We certainly have seen that a number of our vendors are reorganizing and trying to decide how to be more efficient with their supply chains carrying less inventory. I don’t feel I can necessarily rely on the supplier network to have emergency backup for me, so I now need to carry that in my space. So, we are advancing what we’re spending to make sure we have materials on the ground.Logo: P&Q Roundtable

WARREN HAWKRIDGE (VCNA PRAIRIE MATERIAL): We see our vendors storing less and less locally and have more regional warehouses. Really, the distribution is where we’re probably feeling the most impact recently with people being at home and shopping more online. You’ve got FedEx, UPS and there’s more being shipped – and our parts are missing airplanes. Or, when it does land, with the pre-COVID days, we would try to be there to pick it up at the warehouse. Due to COVID, you’re not allowed to be at their warehouse. You have to wait for it to arrive at our site on the truck. In some instances, we’re missing days of production while waiting on parts. The price of the part is less important than the availability of the part. Availability has been a problem.

SEAN WEISIGER (CONN-WELD INDUSTRIES): I’ll echo that. We’ve doubled down and put more in stock to try to supply our customers and make sure our supplies keep going. But the distribution has been a nightmare. Just trying to find trucks to get machinery across the country or the LTL services – it’s a three-day ship order. You don’t know when it’s going to be once you put it on the back of that truck. It’s not three days anymore. It may be there in three days. It may be seven. It may be eight.

Pt & Quarry Roundtable & Conference 2020

Shepherd

SHELDON SHEPHERD (TECWEIGH): I definitely agree with Sean here. Not only that, but we’ve seen an increase in damage of shipments, too. I don’t know if that’s labor or just so much work going through untrained employees.

STEPHANIE DAVIS (DAVIS INDUSTRIAL): We’re seeing it, too, from a vendor standpoint. We’ve always had a large stock of components. We import a lot of conveyor belts from all over the place, and we’re seeing that sea freight alone in the last four months or so has gone up five times what it was. The other thing is lead time. What was a 12- to 14-week shipping for any sort of imported container conveyor belt is now anywhere from 30 to 50 weeks, depending on the sponsor. We’re lucky we’ve always maintained a large quantity on hand and will continue to do so, but we’re working hand-in-hand with our producers in helping them kind of forecast what’s going to come up so we make sure we have what they need.


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