Treating our customers, employees & vendors with dignity & respect has helped CECOR navigate the changing business landscape. We are busy and there is little time for mistakes or roadblocks in our production process. Over the last 6 months our customers, employees & vendors have been faced with many road blocks. It is fair to say the status quo has changed and we are reacting to the changing landscape.
As a customer CECOR wants our vendors to meet our needs with excellent service at a fair price. Pretty sure this is the same way our customers want us to meet their needs.
CECOR has experienced a few new vendor service & pricing issues recently:
- • Unexpected delays in delivery.
- • Unexpected or uncommunicated raw material price increases.
- • Unavailability of raw materials.
- • Partial orders delivered when typically, the full order is delivered.
- • Extended backorders.
- • Vendor lead times increasing.
- • Increasing number of delivery issues from shipping carriers.
No, we are not whining, only stating the facts
Many of our vendors have given us multiple price increases this year, and it is only May. One of our vendors gave us two price increases within 45 days. When we spoke with them about it and they said they recently received five price increases from their vendors and only passed two of them along to us. The frequency of the price increases from vendors is alarming and forcing us to relook at how we do business.
One of our customers asked for a price guarantee for the next six months. A year ago we would have honored their request. We decided to say no because of the instability in raw material pricing and availability today.
When we say “no” to a customer, are we asking them to go to our competition or are they going there already?
I have visited with many manufactures and have heard the same thing over & over again. “We could be running at a higher capacity if we could get the raw materials & trained employees to do the job.” A few of the manufacturers we spoke with said they “stopped or slowed quoting because their current backlog of orders is very high, the cost of raw material is changing too rapidly and trained employees are difficult to find.
Production capacity is at a premium and some raw materials are scarce. An example is mild steel. Steel prices have increased over 250% since June 2020. We have heard professionals say, “the end of 3rd quarter you will see a downward trend on the price of mild steel”. Other professionals agree there will be a dip in mild steel prices at the end of the 3rd quarter but, the cost of mild steel will continue to stay high.
CECOR has instituted a few changes to reduce customer impact
- • Increase minimum inventory on hard to source raw materials.
- • Reviewing additional vendor sources for critical items
- • Redirecting engineering hours to remove/reduce steps in the production process.
- • Decrease the number of days a quote is valid from 30 to 15.
- • Cross training personnel so we can react quickly to employee absences
- • Staying with our scheduled maintenance on equipment to preventive surprise downtime issues.
With these changes, CECOR will continue to deliver high quality products at a fair price.