The astonishing level of demand that erupted following the first lockdown in 2020, coupled with crippling manufacturing and logistical disruption, has led to wild unpredictability and frustrating delays to product lead times. But where are we now and what happens next? kbbreview investigates
The KBB industry has been wrestling with its own Covid paradox for nearly two years. The lockdowns kept everyone at home and made them want a new kitchen and/or bathroom, but they also kept factories closed or on skeleton staff, cargo ships in the wrong place, trucks without drivers and raw materials hard to come by.
In short, the carefully forged links in the just-in-time supply chain were broken almost overnight and this industry, through no fault of its own, has been held back while trying to cash in on a rare boom.
But, two years on, are there any signs of it getting better? Or are suppliers and retailers just getting better at working around it?
What’s certain is that the answers to those questions depend entirely on where you sit in the chain. At last month’s kbb Birmingham it was the prime topic of conversation, but suppliers as a whole were more upbeat about light at the end of the tunnel, while retailers were more sceptical, given their day-to-day experience.
And, of course, it’s not about the performance of individual brands, this is a global issue that all suppliers are facing. While it may not always seem like it from the retailer’s point of view, suppliers are trying their best to manage the backlog.
“The situation is constantly evolving” says Luke Harding, general manager of Electrolux UK and Ireland. “For example, take the ship blocking the Suez Canal, how do you predict or plan for things like that? The shortage of microchips is a massive issue and it’s very hard to forecast because it’s a global phenomenon. We’ve made great improvements, but it doesn’t get us away from the fact that there are still global factors at play and that’s the main challenge.”
This shortage of chips is the principal problem for appliance brands but even for Samsung, who make their own, it doesn’t help the logistical step that follows manufacture.
“It’s all well and good having the products but getting them from where they are to where they need to be is also an issue,” explains Jonathan Hartley, kitchen retail channel manager, Samsung UK. “We’ve done OK but we’ve not been without our own problems with everything from fuel prices, the ability to buy containers at the right rates and the time frame for those containers to arrive in the UK – those hurdles are still there.”
While retailers aren’t managing global shipping problems, they are battling to manage the logistics of getting Mrs Smith her new kitchen or bathroom on time and complete.
“In kitchens, appliances remains by far the worst hit sector,” says John Pelosi, the owner of Caldicot Kitchen and Bathroom Centre in south Wales. “This has a major impact on all full-fit projects. While availability of sinks and taps is now pretty good, we still occasionally get caught out by shortages. For the most part, our furniture manufacturers are in good shape, with our British ones faring much better than European ones. Although even here, certain boards may go out of stock, preventing them being offered while the shortage exists. This has also led to a few manufacturers discontinuing certain doors outside of the usual product refresh cycles.
“In bathrooms – some brassware and sanitaryware can be problematic from time to time, with shower trays very hit or miss. We have found ourselves agreeing more product substitutions with customers in the past six months than at any time since we
took over the company.”
With nearly two years experience under their belts, many retailers are finding work-arounds to manage the situation as best as they can – but that often comes at a price.
“The supply chain issues continue to be a huge headache for us retailers, especially with the major appliance brands,” says Trevor Scott, CEO, RFK. “We are being advised to place our orders immediately after we’ve sold them and to request an ‘ASAP’ delivery date so that our order is in the system even if the products aren’t required for three months. If we cancel or postpone delivery, then we drop to the back of the queue.
“To help counter this, we try to place bulk orders of 10 or more dishwashers, ovens, combi microwaves and induction hobs as and when the opportunity arises and then only sell those, but this has a negative effect on our cash flow and puts a huge strain on our warehousing, as our appliance area creeps ever further into the furniture storage zones.”
One of the main gripes from retailers throughout the situation is, they say, the lack of communication and accurate, reliable, and realistic guidance on lead times. Retailers are sympathetic to the cause of product shortages as long as the information they’re getting is correct, so that they can keep their clients up-to-date and manage their own businesses.
And this is where the biggest gap lies between the retailer and supplier points of view…
While acknowledging the issue, most suppliers insist that the situation is improving as processes, investment and experience are increased.
“In terms of the command we have on our internal information that’s better than ever because,” says Harding at Electrolux, “we’ve put in place new systems, such as a regular webinar that communicates with our Premier Partner studios to update them on stock availability. We have a supply specialist dedicated to kitchen studios in the UK and that’s an additional resource put in place to communicate stock, shortages and availability. We’ve extended some lead times and that’s not to say that it isn’t without its challenges, but I think we’re in much better command of the information than ever before.”
Ashley Munden, managing director EMEA at Insinkerator agrees: “I think manufacturers and their supply chain departments are focusing very heavily on availability, there’s lots of work being done, new systems being implemented to track and monitor it and, yes, for us it’s important that we keep our customers as informed as we possibly can, so we’re managing expectations. But certainly, I think that there’s a lot of learning to be done in this and we’re some way away from the supply issues being resolved, but we’re making great inroads at Insinkerator.”
At the coal face, however, many retailers are still frustrated by the realities of trying to get actual orders out to customers. For them, their successful management of the situation involves taking the published lead times with a pinch of salt.
“I’ve got no confidence in the lead times I’m being given at the moment,” says Darren Taylor, MD of Searle and Taylor, Winchester. “What’s been frustrating is that you order all of your appliances because you’re told it will be 15 to 20 weeks before they arrive, and then, two or three weeks later, half of the order turns up – but it’s never complete. And, we have got situations now where we have quite a few kitchens out there with holes in – not good for us or the client.”
Jane Ive, design director at Bathroom Design Studio in Harrogate, agrees that an already challenging situation has been made all the more problematic by a lack of up-to-date information from suppliers.
“Lack of communication is a serious problem,” she says. “We have controls in place to make sure we chase up the day after an item is due if it fails to arrive – too often, and from several companies, we are told that their stock was delayed and so our order couldn’t be fulfilled. The joke of it is they usually let us know then that we’ve another three or so weeks’ wait – this often puts the product’s arrival after the start of the job.”
And for Richard Hibbert, KBSA chairman and managing director of KSL in Sudbury, it’s more applied retailer maths.
“At the start, it was like ‘we’ve got a date so it’s coming’ but we quickly realised that even if you have a date, it doesn’t mean it’s coming,” he says. “And now we only really know it’s coming when it’s in the warehouse and we’re in the lucky position that we can buy stuff in, pay for it and store it.
“So I wouldn’t say that we’re more confident in the information, I’d say we’re more confident that we know what’s going to happen. We know that if we’re told it’s 10 to 16 weeks, it’s probably going to be 20 and we can plan for it and order early and we know the situation now much better than we did before.”
The position suppliers are in is very difficult, especially in the UK, where so many of the biggest brands are essentially a sales and marketing operation for overseas factories. They can only pass on the information they are being given and, with so much upheaval in all parts of the chain, that may change at a moment’s notice.
“Our retailers have been great – they understand because it’s a global issue affecting every industry,” says Jim McEwan, CEO, Haier UK and Ireland. “All we can do now is communicate – as early as we can – with opportunities as well as challenges, so that when stock does arrive early it gives both parties an opportunity to plan accordingly.”
Samsung’s Hartley agrees: “Our factories are ours and our stock control people are our own people so, as a business, we are very good at communication. But the delay comes from the bits we can’t control. The reality is we’re working as best we can to ensure that the dates we’re communicating are right and we are trying to stick to the delivery dates we’re promising.”
The end of the chain is, of course, the consumer. It is all in place to get them the kitchen or bathroom they want, so perhaps all that really matters is how they feel about it. Guiding them calmly through the now potentially convoluted process is, while frustrating, what independent retailers do best.
“We’ve always been very honest with people,” says Hibbert at KSL. “We’ve always said to them ‘order it early, we’ll get it in as quickly as possible, but it still might not be here when we come to fit’. In the moment they say ‘yes, we understand, that’s fine’ but that doesn’t mean that 15 weeks later when it comes to the fit and there are products missing that they’ll still be fine about it. So, we must manage that. It’s a pain, but we’re dealing with it.”