Don went to our local hardware store last week. While there, he fell into conversation with another customer who happened to be an electrical contractor. The contractor mentioned how he was unable to obtain the plastic switch, plug, and junction boxes that are essential to modern home wiring – and which, incidentally, are required by code.
This meant the contractor was delayed in fulfilling his own contractual obligations, which as you can imagine was as frustrating for him as it was for his customers. This is just one example of supply chain shortages that have been cropping up everywhere.
There’s an organization called ISM® (Institute for Supply Management) that has a fascinating report on what’s going on at the ground level for the supply chain. (I am reprinting some of their data with written permission from their Research & Analytics Manager.)
In the category of “Electrical Equipment, Appliances, and Components” (meaning, for such items as the junction box shown above), respondents are desperate: “Things are now out of control. Everything is a mess, and we are seeing wide-scale shortages.”
For the category of “Wood Products,” respondents are saying, “Prices are rising so rapidly that many are wondering if [the situation] is sustainable. Shortages have the industry concerned for supply going forward, at least deep into the second quarter.”
This February ISM® report has many informative breakdowns in the supply chain. It has a long list of commodities going up in price (which includes, well, pretty much everything), commodities going down in price (which listed one item: dairy), and commodities in short supply: “Acetone; Aluminum; Computer Displays/Monitors; Corrugate; Corrugated Boxes; Electrical Components; Electronic Components; Freight – Ocean; Isocyanates; Methacrylate; Personal Protective Equipment (PPE) – Gloves); Plastic Products; Polypropylene; Propylene; Semiconductors; Steel; Steel – Cold Rolled; Steel – Hot Rolled (4); Steel – Specialty; and Steel Products.”
A ZeroHedge piece entitled “There Is A Shortage Of Everything And Prices Are Soaring: What Happens Next” discusses many aspects of the supply chain and includes useful charts. Referencing one chart put out by Goldman Sachs, they state: “One striking feature of these reports is that supply chain disruptions are ‘very widespread’ and although the semiconductor shortage and its drag on auto production has garnered significant attention, Goldman economist Jan Hatzius notes that many other consumer goods – from headphones to sofas to roller skates – have also faced supply challenges this year.”
They give two reasons for the disruptions:
- “First, manufacturers were caught off guard by a faster-than-anticipated recovery in demand and hadn’t ordered enough inputs in advance to meet production needs.
- Second, the increase in goods demand while transportation services are limited by the virus has led to an undersupply of shipping containers and congestion problems at West Coast ports, resulting in lengthy shipping delays.”
Right now the semiconductor shortage is getting the most press – it impacts a tremendous number of industries – but make no mistake, lumber and junction boxes and steel are just as important. So, for that matter, are canning supplies.
Even more alarming, there appears to be a one-year delay on network router orders as the chip shortages worsen. This means internet service providers could be directly impacted. Think how much business is done via the internet, and you’ll start to grasp the scope of the problem … a problem that has been exacerbated by the millions of people now engaged in remote work.
Some think the supply chain is being manipulated to create artificial shortages. Others maintain it’s just a natural fallout of pandemic closures, disruptions, and transportation issues. Most authorities believe it’s a bottleneck situation that will ease with time.
But whatever the source or the reason, the effects are very real; so much so that Biden (a man without the slightest modicum of business experience) recently signed an executive order calling for a review of the global supply chain.
Here in our new home, we’re in the planning (and in some cases, early construction) stages of a vast number of projects to turn this property into a self-sufficient homestead. We find ourselves having to get very creative when it comes to supplies and materials, and are in the process of scrounging or purchasing second-hand or “freecycling” various components. Clearly this is good for our budget and it encourages us to think outside the box; however it’s also helpful that nothing we’re building has to be up to “code.”
We’ve been trying to purchase a unit of both OSB (oriented strand board) and 2×4 lumber, and – here’s the thing – we can’t. Our local hardware store simply cannot get lumber in any quantity. This morning Don was quoted a price of $60 for a single sheet of OSB. So, unless and until some creative alternatives come available, many of our projects will have to be put on hold.
So what I want to know is how all of you, dear readers, are dealing with supply chain issues. What shortages have you experienced? What work-arounds have you come up with? What creative alternatives have you tried? Your experiences will help everyone.
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