An optimized supply chain is key to maintaining good relationships with your clients and eliminating unnecessary costs in any industry, and the HVAC sector is no different.
However, the pandemic and the economic events that have ensued have activated a complex chain of effects. In such a context, HVAC supply chain issues have emerged as new challenges for the industry.
What are the current supply chain issues threatening the industry and what supply chain improvements can companies apply? Keep reading to find out.
The supply chain as a key for your business success
The supply chain is an often overlooked area for certain businesses but one that can really make a difference for a business’s success.
Put simply, the supply chain involves every operation in the production and sale of a product, from resources to delivery to the final customer. It’s understood as a chain because the smooth running of every part can guarantee efficiency. However, the emergence of issues can cascade and pass on into the next part, thus compromising the whole process and involving a number of businesses.
As a consequence, supply chain improvements are often guided by proactive measures in designing, planning and optimizing every aspect of the chain.
Some characteristics of a resilient supply chain in the HVAC industry today include:
- Proactivity: this means issues are detected and solved before they occur, as part of a company’s forecasting possibilities. Supply chain technology and software today can play a key part in this.
- Optimized costs: this is especially important because of current market trends that are driving prices up in many areas, from fuel to components.
- Monitoring capacities: as opposed to proactivity, this means companies can detect errors or issues promptly.
- Efficiency: goods are protected during every process in the chain, from transportation to storage; at the same time, supply chain efficiency also takes timing into account, so that products reach their intended use as soon as possible and comply with the promised delivery times.
- Sustainability: a sustainable supply chain minimizes carbon emissions throughout the whole process (in transport and in product packaging among others).
At the same time, the importance of building a resilient supply chain lies in the benefits that companies can access when they achieve it:
- Less operational expenses, as issues in distribution, inventory, manufacturing, and transportation can be detected and minimized or eliminated. For instance, surplus inventory costs can be reduced.
- Capability to respond to disruptions in the market, being able to sustain a business’ continuity.
- Minimizing delivery and lead times.
- An enhanced capability to incorporate novelties and be flexible, such as integrating new suppliers.
- Improve customer experience by timely and unproblematically meeting their needs.
Current HVAC supply chain issues
The current HVAC industry is facing a number of challenges derived from multiple causes: from market trends to global economic and logistical issues. Among the main HVAC supply chain issues are:
- Availability of parts. Worker shortages in certain areas such as road transport and specific global trade issues (such as the Suez Canal blockage or the shortage of electronic chips and semiconductors) have meant some HVAC companies have experienced issues in getting a hold of their needed technical parts.
- Escalating expenses. As a consequence of the problems mentioned above, as well as some other particular issues such as rising fuel prices, global shipping prices have risen. These escalating prices have put a strain on many industries, including the HVAC sector.
HVAC parts and other objects now cost more than they did only months ago, and businesses are striving to adjust their budgets to new prices, as well as perhaps finding new suppliers which can meet their needs.
- Delays. Again caused by worker shortages and transportation issues, HVAC supply chain issues have widely revolved along delivery times and other sorts of delays. This affects manufacturers, suppliers, and final customers, who have had to adjust to this new reality and take delay times into consideration.
- Higher demand. All these issues come at a time when the HVAC sector is experiencing growth. This is caused by a number of factors: from an unexpected housing boom to an increased demand for building rehabilitations and HVAC systems upgrading, that responds to new governmental legislation and sustainability market demands and trends.
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Supply chain improvements to avoid inefficiencies
1. Choose the right HVAC parts supplier
The right suppliers will apply their experience to guarantee that technical parts are obtained when needed. In today’s context, this means they will be able to forecast and detect issues such as labor shortage problems or delays and collaborate with their partners to help them prevent and deal with these issues.
2. Find alternative raw materials
While supply chain improvements typically involve a constant search for better, more efficient materials, the current context and issues around material shortages have meant HVAC companies may be looking into new possibilities for building their technical parts.
As a consequence, this might be a good time to consider expanded plastic foam made from EPP, a lightweight alternative made of 98% air that’s also sustainable, durable, and readily available through the Knauf Appliances system.
3. Reduce transport times
Reducing transport times has always been part of supply chain improvements too, but has become an extremely important area to work in today.
Solving this issue today can translate into a number of possibilities:
- First, given that global transportation blockages and fuel costs are expected to stay and become more and more common, companies should consider bringing their operations close to their headquarters.
This might mean different things for different business models. However, choosing a supplier that presents multiple global delegations and which is also close to a company’s own operations might be a solution.
- Secondly, new technologies can also play a crucial part in improving supply chain management for the HVAC sector. For instance, geo-location technologies facilitate monitoring delivery times as well as locations, so that companies can detect issues and respond to them.
In other words, through geo-tagging, businesses gain a bird’s eye perspective on their supply chain in order to identify problems and devise solutions for them, gaining visibility into their full supply chain operations through gathering and analyzing real data.
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4. Optimize your logistic transport
Transportation costs and efficiencies typically present opportunities for improvement, as it’s a specialized area that’s often overlooked.
Solutions can take different shapes. One option can include choosing lighter materials (such as EPP for their technical HVAC parts), which present benefits such as optimizing transportation costs, facilitating their handling during their whole distribution cycle, and system assembly.
Another option might be to select and devise space-saving packaging solutions, which can also help them with transportation and storage costs and easy handling of units.
Want to learn more about the possibilities to improve the HVAC supply chain given the current market and global issues?
At Knauf Appliances we work hand in hand with companies to timely and efficiently provide plastic parts for HVAC systems. Through our decades-long experience, we’ve become a world-class, reliable plastic parts supplier that is present across the world and ready to provide our clients with the best of solutions.
Get in touch with us and learn more about how we can help you.