Blog post by Bruce Marson
As the ongoing pandemic disrupts the supply chain for automation and control system components, EES goes to great lengths to keep projects on time and under budget.
The pandemic and its shockwave into the supply chain has certainly impacted the timeline of the projects Engineered Energy Solutions (EES) has been contracted to perform. Pre-pandemic, we could count on the quoted lead times from our suppliers, from on the shelf, to medium time frames of 6-8 weeks, to the typically longer lead time items. We rely on knowing those lead times and price, as they are crucial to the company’s performance and profits. In the life cycle of a project, particularly bid work, the flow from the estimate, to the proposal, to the construction, and finally turnover to the end user, all requires knowing your costs and lead times with good confidence. Bringing a job in on time and under budget, relies on this heavily.
Well, throw that out the window now. We don’t know when materials will show up, so what do you do? If you need it in 8 weeks, do you order it 6 months ahead of time? If it actually shows up in 4 weeks like it should but it was ordered 6 months in advance, can you bill the client for stored material? What about the manufacturer’s warranty, which begins when it ships to us, not when we installed it? And the inflation factor: you bid a job with a 25% markup on the material, but when you go to buy it, the price has increased 50%...
Let me give you an example: EES has an ongoing three-year project in its final stages. We had been ordering the material as the job progressed and were down to the last 12 pieces of a certain Ethernet part to complete the project. We ordered them in August with a receive date of October, the standard lead time. When October came, the supplier informed us the new ship date was April of the following year. Unfortunately, the project was due to complete in January, three months before the parts would arrive. So, in a scramble to find parts on the shelf, we called the authorized distributor in ALL 50 STATES and we were able to find one in Ohio, three in California and three in Washington. A search on eBay turned up the remaining five in South Africa. Funny, we got the ones from South Africa before the others. We procured these parts and met the deadline for substantial completion. When I called my distributor to cancel the original order of twelve, it turns out they landed in his warehouse just before Christmas and nobody was informed. To top it off, the manufacturer’s system still showed them as pending!
In conclusion, I don’t have any advice to solve this problem, as my crystal ball is as cloudy as everyone else’s. But, we have added a statement to our terms and conditions absolving us from supply chain and schedule disruptions due to the pandemic and we will keep doing whatever massive legwork it takes to keep our clients’ projects on time and under budget.