Approaching two years, customers and manufacturers have progressively experienced delays in everything from food ingredients to equipment and service. Manufacturing delays for reasons of lack of materials, improper planning, and labor reduction lead to empty display cases and higher costs to purchase.
Reasons for delays are vast and have touched just about every sector in the food and dessert industry. Delayed challenges have included everything from the lack of qualified or reduced staff from COVID-related issues, to facilities that were operating at minimum capacity, now trying to ramp up.
Key factors in the supply chain backlog:
- Increase in consumer spending and orders
- Manufacturers lack forecast planning
- Fewer women making up the workforce
- Lack of communication within the logistics industry
- Reduced workforce to transport goods
- Shipping ports not properly planning or foreseeing an increase in inbound containers
Equipment lead times in 2019 were 6 – 8 weeks, today 6 – 8 months:
For people in the ice cream business, there have been significant delays in gelato and ice cream dipping and display cases. Delays have been from the lack of sheet metal making up the interior and exterior walls of the freezer case and for ice cream in continuous and batch freezers, there’s been a delay in small parts and electronic components.
Suppliers:
In both the US and overseas, manufacturers of food equipment are experiencing an increased challenge to keep or retain experienced trained personnel. What are some of the staffing challenges?
- Workers moving to other industries offering higher wages or a safer work environment
- Lack of qualified workers to train others
- Early retirement or workers preferring part-time work
- Working from home opposed to driving to work
How delays are affecting businesses of all sizes:
- Vendors are requiring larger deposits due to longer lead times, which then ties up dollars, resulting in additional borrowing or a company holding off on spending elsewhere
- The cost of ingredients and equipment has increased over 35% in the past 8 months creating an understated budget
Who will really feel the higher costs?
Pretty much everyone in the chain:
Producers – transportation – distributors – the business buyer – the customer
When will supply shortages end and commerce start getting back to normal?
Some industry professionals suggest 2 – 3 years while others state by the end of 2023
What should businesses do during this challenging period?
In my opinion, proceed as planned. If you are expanding a manufacturing facility, opening a retail shop, and venturing into making a private label ice cream, continue with the plan.
If I have an operation with plans to expand, what would a plan look like:
- For expansion projects, finalize drawings
- Finalize equipment list
- Identify supplier and request quotation proposal
- Create sales projection forecast with expanded production
- Identify real funding options
- Train staff for upcoming changes in the new facility
- Remain positive
Covid has created a reason to reflect on how you’ve been operating a business and the dynamic changes required to continue and survive. A significant shift has taken place with businesses across the country in many different industries, from construction and manufacturing to durable and consumer goods, recognizing what worked in the past and over the years, is not the same in today’s business world.
For many companies, the last two years have represented challenges while creating better-than-ever revenue.
- Reduced staff
- Higher, competitive wages
- Increased productivity
- Pride in work
- New products and services
- More reliance and support of local businesses and domestic products
- Better forecasting
- More focus on the quality of life
For some owners and workers, the past two years represented a re-calibration of life, demonstrated by selling or closing a business, early retirement, work from home as opposed to commuting, and industry change. Make no mistake, the pandemic has rough-housed domestic and global markets and most importantly, the many, many lives of humans.
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