It seems everywhere you read these days; supply chain issues are in the forefront of so many news articles. Often, we are hearing descriptions of large shipping vessels waiting to unload in the Port of Los Angeles, empty shelves at the grocery store, or the projections that people should adjust their holiday gift shopping timeline and expectations of product availability. Our industry has seen the impact of these supply chain issues first hand with product shortages, as well as manufacturer price increases. Many manufacturers are still backlogged and are working fervently to catch up, unfortunately we can expect these backlogs to impact the 2022 season. The good news is, we expect continued demand for irrigation and landscape services as consumers continue to make capital improvements on their homes and businesses. This means another strong year is projected for our industry.
When putting together your 2022 business plan, consider these 4 tips to help you overcome manufacturers’ supply chain challenges and price increases:
1: Understand Where the Shortages Are
Many of the supply issues and shortages relate to all industries, and some are industry specific. It is important to know how the green industry is being directly affected. We are finding an added layer of challenges in our industry on an already difficult situation, due to raw material shortages, fuel/freight, and the associated cost increase on both. The deep freeze in Texas and the southern region earlier this year impacted the largest chemical and petro companies in the U.S. This is causing a severe disruption in the supply of resin, which directly impacts product categories made from plastic including PVC/POLY pipes, drainage, and fittings.
We are also seeing extreme volatility with the price of copper on the global market. The demand is high and supply has been tightened. This directly impacts the cost of products containing copper, including copper wire and brass fixtures. Furthermore, global microchip shortages are impacting all electronic devices, including irrigation and lighting controllers. As we move later into the year, we anticipate these price increases to continue across both resin- and copper-based products, as well as electronics.
2: Prepare Ahead of Time
Planning is always important to make sure your day-to-day runs smoothly. There are a lot of moving parts to the puzzle: when to order product, where each member of your team will be and on what day, and how much cash you have on hand for necessary purchases. Add in the component of manufacturer shortages and some of the other challenges, and it can make everything you do more difficult and time consuming. With that in mind, planning and preparation is vital to ensure your daily operations and jobs run smoothly. However, one important tip is to avoid panic purchasing. This will only exasperate the supply-chain challenges our industry has been facing. We recommend working with your local Central rep to review your purchasing history from this year to help you plan for 2022.
3: Work with a Dedicated Partner: Consider Expanding Your Portfolio of Services
A dedicated partner understands your challenges and is proactive with solutions. The Central team has been diligently working with our manufacturing partners to stay at the forefront of any supply-chain issues and price increases. We have been strategic with our purchasing and have been actively stocking our warehouses with additional inventory. This proactive planning has allowed us to bypass many of the challenges that other distributors have had with inventory shortages—and we’ll continue this strategy into the coming season.
Central also provides the opportunity for training and learning from Subject Matter Experts about additional product lines that you and your team might want to add. Adding additional options to what you can provide for customers will keep your business always growing and adjusting to the changing times. Make 2022 the year you decide to add new services such as outdoor lighting or outdoor kitchen kits to your portfolio. View our current course schedule and to register your team members.
4: Take Advantage of an Early Order Program
Planning your purchases can help you save money on your bottom line but more importantly, with supply chain challenges, you can guarantee you have the product you need, when you need it. See how an Early Order Program can help you get a step ahead of your competitors and grow your business:
- An early order program will help you beat the manufacturer’s price increases. Get ahead of the increases and lock in your material costs now, before the prices go up. Better yet, connect with your local Central rep to learn how you can take advantage of additional cash discounts, double reward points, and extended terms.
- Increase Cash Flow: Get Product Now, Pay Later. Cash flow is often a concern for business owners. Strategic purchasing can help ease your cash-flow worries. When you utilize an Early Order Program, you get the products you need to finish your job now and stock up that you will need—and pay for it later in the season when cash is flowing better for your business.
- Easy Inventory Management. Whether you are installing a new irrigation system, adding landscape lighting to a job, or getting ready for spring—you need product. When you don’t have the materials you need to do the job, work can be delayed, or even worse-be stopped. Nothing is worse than having to wait for materials to finish a job. Central can help you forecast your inventory levels based on your historical purchases, so that you have the right quantity of the products you need.
- More Rewards = More Awesome. Central offers the most flexible and rewarding loyalty program for the professional contractor. Earn points with all of your purchases of irrigation, lighting, turf and equipment products which can be redeemed toward your choice of rewards.
Your participation in the Central Rewards Program also gives you access to educational, employee recruiting and marketing resources tailored to drive your success. You are automatically enrolled in the program. When you commit to Central with an Early Order Program, you may even be able to double your rewards! Ask your Central Rep to learn more.
Finally
Rely on Central to help, whether it’s questions about inventory management, strategic purchasing, marketing strategy, or business planning. Central has 53 branches throughout 17 states and two countries, and we’re able to transfer products between our locations to make sure you have what you need, when you need it. Schedule a planning meeting with us to discuss your needs—together, we can create a plan that works for you. We stay at the leading edge of the industry and we’re ready to help you grow!