By: Davies Hood, Induron President
“This is going to be the most challenging time in our professional career.”
If I’ve said that phrase once in the last month, I’ve said it a hundred times. Because supply chain disruptions are causing significant and immediate price increases as well as challenging, uncharted lead times, those of us in the chemical industry are facing unprecedented challenges due to these unknown and/or undefined constraints.
In fact, Bloomberg Businessweek recently reported that “the world economy is suddenly running low on everything.” Likewise, Composites World reported that “a supply shortage of epoxy, polyester and vinyl ester resins, caused by U.S. winter storms and a variety of factors, continue to make headlines and affect the composites industry.” The global supply chain is simply a mess.
I frequently mentioned these delays to our sales team during our “in-person” sales meeting back in May, but I’ve also discussed these supply chain challenges during each management team meeting for the last 6 weeks, as well as in daily conversations with BOTH our suppliers and customers.
In short, it’s tough to talk about providing coatings materials when you don’t know when or even IF you are going to be able to obtain the critical raw materials to make our products. The exorbitant cost (compared to historical norms) of these materials could be the topic of an entirely separate blog. Yes, inflation is unfortunately hitting the coatings industry.
The current chemical industry supply chain disruption began in 2020 as the escalating trade tensions between the U.S. and China were exacerbated by the global shutdown caused by COVID-19. But that’s not all: The supply chain disruption really became a tragedy during the winter freeze in Texas, which literally crippled the petroleum refining industry.
At a time when supplies and resources had been minimized because of the pandemic (Q1 2021), a natural disaster caused numerous breaks/leaks in several large refineries that all reacted (thankfully so for safety sake) by shutting down production for various, extended periods of time. As these systems got back on track and continue to do so, the consistency and amount of production has been irregular and at a volume that has not come close to meeting the pent up demands in our industry.
During the good times, it’s very easy to talk about core values and customer relationships. When the chips are down and the entire marketplace is facing uncertainty, cost increases and lingering questions, like “when will this all settle down again?,” it is time to over communicate, act in a loyal manner and live out your core values. At Induron, our core values are Integrity, Respect, Reliability and Innovation.
If we as a company are going to survive and thrive after these turbulent times, we will have to personify each and every one of those values.
INTEGRITY has a lot to do with honesty and during uncertain times like these, truthfully communicating is key. You have to do that with RESPECT for all parties, especially customers but also employees (co-workers) and suppliers.
RELIABILITY, even when it involves telling someone that you can not meet an order or have to increase the price we charge in order to cover costs, is more important than ever. Even if it’s bad news, it’s much better to be up-front and honest. The downstream costs will be even more significant for those that try to hide the cold, hard truth.
Lastly, INNOVATION, or thinking outside the box, just might be ‘the way’ that we get through this supply chain ‘rough patch.’
Yes, the current times are challenging, but falling back to our core values is how Induron will weather this storm!