|
Good Day everyone... I’m so sorry to see all the frustration relating to “Supply Chain Issues”… At the expense of upsetting some folks, I’d like to share some experience and information that might help dappen our disappointments. As a manufacturer myself, we have seen and experienced:
1) Many suppliers send “Force Majure” letters… This is where a Vendors state that they cant NOT be held responsible for anything that happens outside of their control.
2) We have seen freight prices go from ~$2,100 per container to as much as $26,000… This alone affects our Raw Material prices…
3) Prices for commodity items have gone up as much as 2 times on the same day (from same vendor)…
4) Raw Material has seen as much as a 65% increase just since February of this year…
5) Vendors are going from 2 week deliveries on commodity based items to as much as 14-18 weeks… And to add insult to injury, they will not guarantee they can get it by then and most likely the price will go up again even though we have a Purchase Order with them at a state price.
6) Labor in our area has seen as much as 33%+++ increase in hourly rates since this time last year… Some have seen an even sharper increase in labor rates and are PAYING folks to fill out job applications.
7) Due to the lack of labor, productivity is diminished and in extreme cases it affects quality, operating costs while slowing down deliveries which affect orders that are scheduled to run next.
I understand that it would be better if BMW could postpone Customer Confirmed Orders until the needed parts are in. However the problem remains that all the other components they may have are already been allocated for and in the Warehouse awaiting dispatch… Eventually, like us, you run out of Warehouse space “hording” Raw Material to service your customers… Its not uncommon for a supplier to build up inventory so that they can start shipping as normal on a certain date going forward… This can be referred to as a Deviation… Not to mention that their Purchase Order, Scheduling & Work Flow software was most likely created pre-pandemic… And therefore that system cannot account for this kind of Raw Material disruption… However the Dealership could, they could call the customer and tell them an update and make a note to check daily until they can reorder your preferred options or in the very least do a dealer search to find you the vehicle you want…
I will add another layer that is most recently affecting the World Supply Chain. Various industries in China (from Mines to Chemical factories) are being closed (by the Chinese Government) due to the Winter Olympics… The reason is to clean up the Air in time for the Games… For example, Silicone (mines) for sealants and phosphate salts for Fire Retardants are among those industries being shut down… Imagine what that is also doing to the Auto Industry…
Sorry for the long response…
|