The empty-shelf challenge
Mega cargo ships, tall enough to touch the clouds, hang at their anchors, awaiting an open dock.
Truck-size intermodal containers, off-loaded in port, sit stacked and packed, looking for a ride to their destination. If they could put a thumb out and hitch, they’d do it.
And at the demand-end of all this, sits hardware store shelves, seemingly chanting a plea to be filled.
How did we get to this point? Where are the solutions? When will the stuff roll in?
There are many factors at play here: Forecasting, business relationships, and people and materials shortages.
Helping explore complicated supply challenges facing independent hardware stores right now are two hardware store managers and one hardware store owner, weighing in from different parts of the U.S.
Landon Garner, third generation owner of Rogers, Ark.-based Garner Building Supply and Rental, which has served Northwest Arkansas for 65 years, related, “We are having to project forecasts earlier than we normally would.”
He said their company is leaning on and, “trusting those industry relationships we have cultivated for years with our buying groups.”
Garner added that there is lots of information out there — some good and some not so good. “It reminds me of the meteorologists who are forecasting what will happen months from now when they can’t even get tomorrow’s weather forecast right.”
Partner companies are doing the best they can to manage the import market, the price increases, the raw material shortages and their own employee issues, he pointed out, and this has, “caused our business to shift how we purchase and when.”
Cody Miller, inventory maintenance specialist at Hartville Hardware, located in Hartville, Ohio, explained what he’s seeing: “In general, manufacturing is not able to keep up with demand mainly because of shortages in the workforce. Also, there’s a short supply of raw materials. A lot of our suppliers are not able to get basic materials because of shortages and/or they are on allocation.”
Then, when they do have the materials, they’re not able to produce fast enough because they do not have the personnel to do so, he related. This has created an extreme backlog in the supply chain, especially when the orders keep rolling in.
The other issues are at the ports.
“There is a container shortage due to many ships waiting at ports, waiting to be unloaded, but there is nowhere for those containers to go,” Miller said.
Railways are backed up so many containers are being transported now by truck, he related, “which is putting a huge strain on the trucking industry. There’s a lot of product at the ports but no way to get the product to its destination.”
See-through
Explaining current supply chain issues with your hardware customers and describing delays can be daunting. But clearly communicating, and letting them see the whole picture, can help.
“We are trying to be as transparent and honest as possible with our customers about what is going on,” explained Miller.
One example is with exterior doors and windows, he mentioned. “We’ll tell customers upfront about the challenges in the industry and that they could be looking at a 12- to 16-week lead time, compared to a 2- to 4-week lead time in years past.”
Holes
“As far as product is concerned, our shelves have holes in places
that we’ve never had before with product.”
— Landon Garner, owner, Garner Building Supply and Rental
The crazy part is, most of the time they are ok with waiting, he noted, and go ahead with their order, which contributes to the backlog in the supply chain.
The other thing Hartville does, Miller said, is work hard to find alternatives for the customer.
If a customer comes in looking for a certain product that they cannot get at that time, he explained, they ask ‘what else do we have for them that can fulfill their need?’
Even if an alternative will not work for them, he pointed out, “at least they know we are working for the customer as best we can in the current climate.”
Garner, who noted his family business consists of a full-line lumberyard and 20,000+ square feet of hardware and rental and has been a True Value dealer for more than 40 years, indicated that when it comes to talking to his customers about the supply situation, he has three descriptive words: Communication, communication, communication.
“Communicate — and over communicate,” he said.
This is especially true with products that you know have extreme extended lead times that people desperately need to finish a build.
You communicate the lead time on the front end with a caveat that it may be longer due to these issues, he advised. “Contact them throughout the process with updates and continue to do so until delivery.”
“People get a lot less frustrated with you about something unexpected happening, when it’s communicated timely,” Garland continued. “Not when they’ve paid everyone to show up tomorrow and you don’t have what they were told you would have two weeks ago.”
Shelf Life
Another area of concern in a hardware store’s supply pipeline is how shortages affect products on the shelves, and prices at the checkout counter.
“Sometimes our shelves just haven’t been as full, since so many of our lead times have been extended. Other times we simply cannot give a confident date when an item will be back in stock,” said Cindy Kandel, divisional merchandising manager at Hartville Hardware.
They have also been faced with an unprecedented amount of price changes over the past several months. Prices are going up as freight charges have increased, so vendors must cover those costs, Kandel noted. “This means we are all paying more for items at checkout.”
Over in Arkansas, the Garner Hardware owner indicated that there are product shortages on the shelves, but added, “this far into the game, customers understand.”
When large retailers don’t have simple staple products on their shelves, it becomes easier for customers to grasp, he suggested.
As for the checkout counter, Garner said his hardware customers know they must pay more now for the same products that were cheaper two years ago. Initially, he added, his business shouldered some of the additional cost, but it reached a point where those costs had to be passed on to the customer.
Relationships
“Keep a good relationship with your vendors so when the product does become available you are the first person they call.”
— Cody Miller, inventory maintenance specialist, Hartville Hardware
Alternatives
Hardware store buyers today are investigating alternative suppliers, for instance from North America.
Kandel said she has, “absolutely brought in new product lines that are made in other countries than China. Many of my flooring vendors have begun to manufacture product lines in the U.S.
“We, as a company, want to support that kind of investment in products that bring manufacturing back to the United States. We hope that it will stabilize prices, as well.”
It’s hard to see how long these supply challenges will last. But everything Kandel is hearing from her vendors, she noted, indicates that these challenges will remain well into the second quarter of 2022.
Garner has studied the possibility of finding other suppliers closer to home. “We have,” he said, but indicated he’s finding that raw material shortages are still the issue.
“Even if we could get product ‘Made in America’, which would be great, the manufacturers are struggling to obtain the materials to make products,” he pointed out.
The pandemic has exposed more than a few crippling issues in our manufacturing and supply chain, he related, adding that, “So many raw materials are still imported.”
Garner felt that the supply challenges will last through 2022. But he hopes to see an easing of allocations and product availability before then. Self-inflicted bottlenecks, he thought, would keep Q4 this year from being a better quarter nationwide for retailers.
Optimistic
Finding a way to work through this, seems to be the overall feeling. Owners trust their relationships they’ve built with both their hardware customers and their suppliers.
“Take the supply chain issues in stride,” Miller counseled, saying that maintaining a solid vendor relationship will keep you and your hardware store top of mind when product returns.
Most of us realize that nothing really lasts forever. Pandemics end, and so will supply shortages.
“Just keep digging,” Garner advised. “So many products are still on allocation, but some manufacturers that I spoke with are optimistic we will start to see some loosening in early 2022.”
Your integrity in your hardware business is special. You have worked hard and earned it and your customers and business partners know it, and in the end, it is the greatest thing you have.
“Look for alternatives, when possible,” Miller concluded. “Give your customers another option. Be honest with your customers about the issues, not as an excuse, but so they know you are on their side and are working for them.”
