Coronavirus and the scaffolding supply chain

Getting the balance right between putting our health first and keeping our businesses running is vital, says Des Moore, TRAD UK CEO

The severe restrictions on business as a result of the Coronavirus outbreak have caused many worries for those of us working in the scaffolding and construction industries. We are all putting the health and welfare of our employees and those connected to our business first – many people at TRAD are working from home, whilst others are working wherever it is practical for them to do so, and we have set up clear and helpful ways to make sure that people can work as normally as possible. Where people do have to come into the office or work on site there are clear rules in place, in line with government advice, to protect them. But we have a responsibility to protect those same people in other ways too, by ensuring we can pay them and that there is a business to come back to that is as strong as possible. For companies like those in the TRAD Group, that means making sure that our supply chains are as strong as possible, so that we can continue working and supplying equipment for as long as it is needed.

KEEPING YOUR SUPPLY CHAIN MOVING

Like many businesses in the industry, some of our supplies come direct from China and other countries around the world. The effect of the virus on all these places means that supply chains As an industry we must avoid standing still and move forward by keeping the lines of communication open with our suppliers

could be interrupted for an uncertain amount of time. That’s why one of the first things we did was to contact all our suppliers and get a clear visibility on what we can expect to come into the business over the next few months. Whilst China was affected at the start of the outbreak before Christmas and over the Chinese New Year, the timing of it meant that suppliers ordering from Chinese manufacturers had already ordered supplies in advance or in greater quantity – this is standard practice for the time of year and means that supplies are not as interrupted as they may have been at another time of year. In addition, several of our suppliers can dualsource, so they have back up options for some of our products in other countries. Depending on where factories are based in China, some have been shut down and some avoided any problems and were able to keep working – this is a matter of luck, but for those factories that were shut down, operations have now resumed and are working at near-to-full or full production. However, many companies source from UK or European businesses and that’s where our supply chain is likely to be more vulnerable in the near future. Many European countries are on complete lockdown, and although UK businesses are still able to operate, they may also source stock or components from other countries that are already under severe movement restrictions or are likely to have them imposed imminently. This brings more uncertainty into the UK scaffolding supply chain with our local suppliers finding it difficult to forecast future supply, even when they are working within the bounds of their own business continuity plans. In fact, some of the panic buying that we have seen in the food retail sector could extend to the supply sector and we have heard reports of containers of stock being sold by resellers before they have even arrived in the UK.

OTHER SUPPLY CHAIN FACTORS TO CONSIDER

Reduction in port, customs and office staff – whilst goods may be arriving, the lockdowns in the country of supply and the isolation-in-case-of-infection restrictions in the UK means a reduced workforce dealing with imports and associated paperwork. This in turn is likely to introduce delay into the supply chain. • New outbreaks – countries are seeing outbreaks happening at different times, so a country that appears to be managing now may well see a peak in infection in several months and need to implement measures accordingly. This could affect the supply chain down the line, as could any re-emergence of the virus in countries that feel they have come out of peak infection time, like China. • Restrictions on transportation – any restrictions in shipping, flights and road transport will automatically affect supply coming into the UK direct to scaffolding businesses or to our suppliers, regardless of whether the goods are being produced at full capacity in the country of origin.

WHAT CAN WE DO?

From speaking to our suppliers, it’s clear that we need to keep lines of communication open. Businesses should keep an eye on their projects and run forecasts for the next three to six months based on what we believe we will be doing during that period. That gives us information we can share with our suppliers, allowing us to plan ahead for stock and for forward orders where we can. If stock is available now and you have the cash and the storage space, consider buying additional stock so you are ready to get back on existing projects and take on new work as soon as you can. You should also revisit your business interruption plan so that you know exactly what you need to do should your projects be halted for a time. This includes making contact with your suppliers and with your insurers, and having a communications plan ready so that you can let your people, your customers and your stakeholders know exactly what’s happening and why. Bear in mind that it’s more important than ever to keep in touch with your suppliers. Indications are that suppliers in China are now starting to fear their own downturn in business as demand from customers in the west decreases whilst they fight the virus and work slows down. Keeping your suppliers up-to-date with how your business is working will give them some confidence and help their planning wherever possible.

BUSINESSES SHOULD KEEP AN EYE ON THEIR PROJECTS AND RUN FORECASTS FOR THE NEXT THREE TO SIX MONTHS BASED ON WHAT WE BELIEVE WE WILL BE DOING DURING THAT PERIOD