Stakeholders across the wood building community are feeling the pinch of rising costs, labour shortages, and supply chain speedbumps. Recently, the Canadian Kitchen Cabinet Association (CKCA) issued a statement addressing these issues and their impact on its corner of the industry. We reached out to Sandra Wood, CKCA’s Executive Director, to keep the conversation going.
You mention global supply chain disruptions being a cause of stress for your sector. What do you think are the main factors behind this?
Well, I should clarify that I’m not an expert on world supply chain issues; I’m only relaying what suppliers are telling us and what we’re seeing from our members. That being said, we see current supply disruptions being caused by many different things happening simultaneously. It’s not just one issue; it’s kind of a perfect storm.
For one, there was an initial reaction to COVID-19 on a global level where manufacturers and suppliers to the industry anticipated a slow down because of the pandemic, but, in reality, there wasn’t one. Also, because of COVID, every company out there has had to continue producing products while maintaining all the necessary safety protocols required to keep their people safe. Combine that with a growing competition for parts and materials, boats getting stuck in the Suez Canal, bottlenecks at ports, a shortage of shipping containers, and your typical setbacks, and you can see why supply chains are being challenged.
And heightened demand is also adding its own challenges?
It is. There’s very high demand for our members, and it’s coming from a large number of homeowners who spent the last year and a bit sitting in their homes for an unprecedented amount of time. We had a large number of people cooking more than they ever did before the pandemic, and maybe just recognizing dysfunctionalities in their kitchen or just simply getting tired of looking at it.
As an aside, my sister manages a HomeSense, and she says she can’t keep anything in the store. Everything is just flying off the shelf, and it’s not just the small decorative items; it’s the big-ticket stuff too.
Another piece to this again is that infrastructure investments are going up. The US, for example, is pumping $2 trillion into infrastructure over the next couple of years or few years to boost economies and create employment opportunities. That in itself is creating a demand for product.
How do you see your members adapting to these challenges?
There are a lot of ways our members have had to adapt. For the pandemic alone, they had to change many practices and bump up all the safety protocols within their shops and stores.
I’ve been hearing a drive for greater automation to adjust because people don’t feel safe coming to work, had to stay home to tend to their family, or didn’t want to work because they could earn more on CERB. So from an HR perspective, there’s been a lot of adapting in filling those gaps, exploring automated solutions, and just doing whatever you can to keep the remaining employees happy and safe.
Another part of it is that we’ve all had to keep up with government announcements on a near-daily basis. We’re always trying to interpret government changes, understand the new rules, find out where funding might be coming from, and if we’re even allowed to be open or closed on any given day. So all of us have had to start tuning into the government on a level they never really had to do before. I think I’ve watched more news over the last year and a half than I ever watched in my life.
How have your members navigated rising prices with their clients?
Many manufacturers are in contracts with builders that they signed years out, with pricing that allowed for some updating. That said, no one could have predicted the increases we’re seeing, and that’s been a massive hurdle because it’s forcing companies to make big decisions. They’re wondering if they will have to break their contract and how that might jeopardize their relationships with their clients. No client wants to hear, “Sorry, the price just went up by 30%,” so manufacturers are trying to temper the bad news and maintain those relationships the best way they can.
What advice would you offer businesses as these challenges persist?
For most business people who are in business, there’s no choice but to stay the course of shut down. At the same time, as a business owner, you have to keep your employees safe and respond to what the government says you need to do. You can’t go against those instructions when someone tells you to shut down, but you can get on the phone and talk to your counselor or a lawyer to find out how you can make it clear that you’re providing an essential service and you should be part of the group that remains open.
How long do you see this “perfect storm” lasting? Are clearer skies ahead?
Well, look, if I had that crystal ball, I’d be a billionaire. I can say that CKCA has been speaking and listening to national, reputable national organizations, trying to figure out where this is all going. We even hosted our national forum a few weeks or a month ago. I had the Canadian Manufacturers and Exporters Association president and Dan Kelly from the Canadian Federation of Independent Business talking about the economic outlook. So I’ve just been listening to a lot of this, and I can tell you there isn’t an expert on the planet who can tell you what the next one to five years will be like because we’ve had so many unforeseen things happening.
That’s all to say; it’s a tricky question. The last year and a half have taught me not to speculate. All I know is we can’t go back. We’re moving forward differently, but the good news in all of this is I think we’ve got greater clarity now than we did a year and a half ago. There are fewer unknowns. I’m also seeing many people who have adjusted to the situation and are more responsive to the changes. We just surveyed our members, and a majority are telling us they haven’t slowed down, which is a good sign.
That’s one thing you have to give this industry credit for. They kept operating through all of it, and this was not easy. I had some business to say to me, “I wish we could shut down because trying to keep open through this is exhausting.” But they kept open, and they kept going, they kept producing, and they’ve kept their people safe as they can. I think that speaks to the industry’s resilience, and they need to need to pat themselves on the back for that.
Matt Bradford is a writer, editor, and longtime contributor at MediaEdge, publishers of Wood Industry e-digest and magazine. He has spent years reporting on the wood and construction industries and values the opportunity to provide insights into the secondary wood manufacturing community’s successes, challenges, and opportunities.