Two years ago, composites companies were struggling with multiple issues when trying to obtain the supplies and equipment they needed to maintain their operations. Even when they could procure them, it was a time-consuming and expensive process to get them to the right site. While the composites supply chain today is in much better shape, problem areas persist.
From 2020 through much of 2022, material prices and freight costs were at record highs and lead times and transit schedules were long. “But the biggest fear was not getting material at all,” says Mike Wallenhorst, president of Fiber-Tech Industries and a member of ACMA’s Board of Directors. “At least now we feel confident we can get the materials and equipment we need.”
Quoted lead times are generally back to normal, but actual delivery dates can be unpredictable. For example, when Fiber-Tech needs to buy equipment and gets a quote with a three-month lead time, it’s not uncommon for the supplier to call a month later with a lengthy postponement of delivery.
“The delays are unexpected and so long as to be unbelievable. But it’s not across the board; it just pops up randomly,” says Wallenhorst, whose company manufactures GFRP panels. This is more likely to happen with more complex products like gel coats and equipment, which require more labor for production and/or must be imported.
Creative Composites Group, which manufactures structural FRP composites, had difficulty obtaining resins, pigments, catalysts and coatings during the COVID-19 pandemic and after the freeze in Texas in 2021.
“We had to deal with no confirmations for supply orders and dates being missed when orders were confirmed. In some cases, this resulted in short shipments or no shipments,” says Shane Weyant, chairman/CEO of Creative Composites Group and a member of ACMA’s Board of Directors. “Things have improved, however, and this is not the case currently.”
Managing for Volatility
Companies have developed several strategies for dealing with this supply chain uncertainty. During the worst of the supply chain woes, managers at each of Creative Composites Group’s locations met daily to discuss material shortages and juggle production schedules so they could continue manufacturing. Although there are fewer shortages today, managers still meet weekly to review what’s available and to ensure production can continue. The company has also identified a second supply source for all the materials it needs and has found ways to modify batch formulas to develop alternatives for certain hard-to-obtain additives.
Composites companies also are keeping a closer eye on materials and equipment inventory levels, trying to gauge how much they should stockpile given current conditions.
Fiber-Tech has gone through all its key equipment, identified any parts necessary to repair and maintain them and invested in a replacement parts inventory. “We knew that if something critical goes and we didn’t have [the right part] on the shelf, we could be down for months.” says Wallenhorst.
For materials like glass fiber, which have no shelf life, Fiber-Tech has adjusted its safety stock to cover almost every eventuality. Pre-pandemic it kept five loads of glass, during the pandemic it maintained 15 loads and the company has now cut back to eight loads in reserve.
“We’ve also asked our suppliers very tough questions about their forecasts and their supply positions and where we fall in their cadre of customers,” Wallenhorst adds. “We feel fairly confident that between our two suppliers and what they’ve committed to keeping in their warehouses we’ve got a good, comprehensive plan.”
A possible recession, which could reduce demand for composite products, must also be factored into the inventory equation. “For us, having what our customers need is paramount no matter the market conditions, and managing through the volatility of demand is a key focus. We need to make sure we are right-sized as far as inventory levels are concerned,” says Dave Smith, vice president of marketing at Composites One, a leading distributor of composites materials.
Weyant says composites companies need to develop close partnerships with suppliers and communicate with them frequently to ensure that they maintain the supply inventory that their customers need. He spent a lot of time during the pandemic talking and meeting with the people at supplier companies who made decisions about where they would send their materials.
Bringing Suppliers Closer
Transportation is currently one of the bright spots in the composites supply chain. The long, pandemic-related backups at both West and East Coast ports have disappeared, trucking rates have decreased from their record-high rates in 2022 and transit times within the US are down.