What’s Happening with the Electrical Supply Chain in 2021?
What’s happening with the electrical supply chain in 2021? Well, let’s dive in. Unfortunately, the pandemic caused new cracks in the electrical supply chain — and exposed some old ones.
How the Pandemic Impacted the Supply Chain
Manufacturing slowed down, causing rampant shortages. Studies show that 71% of contractors are facing at least one material shortage, mostly in lumber, steel, and lighting supplies. And with these shortages came price increases on materials like copper, steel, and aluminum.
But product prices and availability weren’t the only areas impacted. The pandemic also caused freight problems, shipping delays, container shortages, and limited port capacities, all resulting in increased freight costs.
On top of that, the industry prepared for a decline in construction and received a construction boom instead. This turn of events caught the electrical supply chain off guard, resulting in widespread lead time extensions.
The Chamber of Commerce’s quarterly report shows that 83% of contractors have experienced increased product delays because of COVID-19, 71% of contractors are struggling to meet schedule requirements, and 68% of contractors expect the trend to continue into Q2 of 2021.
How Electrical Suppliers Are Adapting
With such obstacles facing the electrical supply chain, companies like City Electric Supply (CES) are adapting.
“My motto on my district is — adapt and overcome. My team has done just that,” said CES District Manager Joey Barefoot. “When we noticed potential shortages, we made safety stock orders as a backup plan for branches.”
And while that strategic planning certainly paid off, CES had something else going for them.
“Our biggest advantages are our branch footprint and our ability fill backorders quickly through our extensive branch network,” said Barefoot. “That and our ability to make local decisions at the branch level.”
The CES Advantage
CES definitely had a bit of a leg up with a diverse global supply network, strong national infrastructure, and local branches who understand what their contractors need, how to find it, and how to quote it competitively. These things, paired with adjustments made to keep up with the times, CES has effectively supported customers throughout the entire pandemic.
But they also had one other notable advantage — an exclusive in-house manufacturing company, TAMCO Group. TAMCO manufactures and distributes lighting and electrical products under six brands — Tamlite Lighting, Fusion Lamps, F4P, MCG Industrial, RPP, and Centaur Electrical Installation.
“TAMCO provides a unique solution for CES as we have 140,000 square feet of dedicated manufacturing space at our Port St. Lucie facility,” explained Co-Vice President of Operations Jordan McGinn. “This allows us to produce products that are within high demand in the U.S. with raw material and U.S. labor.”
“Over the last 18 months, we have come to appreciate the access to material TAMCO has as a safety net during supply changes,” added Co-Vice President of TAMCO Frank McShane. “The shortages in the supply chain have been covered using our own brands. More and more customers are trying our brands, which has allowed their projects to be completed on time.”
TAMCO also has the advantage of team members like Purchasing Manager Abner Bezerra.
“There’s a shortage of ocean containers, and it will continue for a while, but we’ve been working through it using contracted rates that guarantee vessel space,” said Bezerra.
With the help of an extensive network, an innovative team, and TAMCO, CES has powered through this difficult time.
Where the Electrical Supply Chain Is Headed in 2022
If we’ve learned anything from recent events, it’s that no one knows the future. We can learn from the past, though, and the hit the electrical supply chain has just taken is sure to make it stronger in the future. By 2025, you are likely to see the supply chain adopt new technology, like automation, across the value chain, which could help prevent events like the pandemic from having such an impact on the supply chain in the future.
The future of the electrical supply chain might be hard to predict, but if the way CES has adapted to changes in the past is any indication of how they will adapt to changes in the future, CES customers are in pretty good hands.