2025 will remain challenging as projects and order books realign. However, as Charcroft director Debbie Rowland emphasises, there is a solution to every challenge.
The unprecedented impact caused by global supply chain issues has affected all sectors and industries. Previously, a couple of industries could be in a slump but overall business would remain strong. This time, issues have been felt across the board and realignment is affecting everyone simultaneously.
Impacts may be felt in ways not previously experienced or expected. It is vital to be ready, not just to react with quick decisions and changes, but to identify and solve potential issues before they impact customers.
Metal costs have started to stabilise, following a rise in prices over a relatively short time and off-shore manufacturing will be under scrutiny from suppliers and customers. There may also be tariffs and further in-depth paperwork will demand high levels of proficiency.
As order books become leaner, a price war will come back in to play. The current market is saturated by stock that everyone is racing to move, following over-procurement which was used to mitigate long lead times and shortages.
The rail industry is starting to show movement after practically being shut down during Covid. Refurb, enhancement and new build projects were all pushed back but now are starting to come online for 2025. We are still seeing obsolescence in many active components which has a knock-on effect for all other components. If a semiconductor is unavailable, then everything else is immaterial. So, finding solutions to obsolescence and acting quickly on last time buys is paramount.
So much focus has been on critical components in high-end industries, and identifying these parts and ensuring supply will be key. Sometimes there may be no alternative to these key components so handling long-term supply must be the priority.
Distribution needs to be proactive, not reactive, offering solutions before they are needed. This should include cleansing data on customer bills-of-materials and approved vendor lists without being requested, which should be an essential process for specialist distribution. Taking every opportunity to strengthen customer data should be offered without extra cost to the OEM.
Many franchises are now offering new and innovative components rather than fire-fighting supply issues and filling order books. We need to combine existing and new approaches to get these products in front of engineers so that they can benefit from the research and development.
We are close to completing a new acquisition which will add more and new products to our portfolio. Also, kitting has recently been offered, in addition to the UK manufacturing of specialist components, and adapting our suppliers and franchises.
We will continue to remain flexible and we will always be ready to negotiate whatever hurdles and obstacles come our way, because for every problem there is always a solution.