Labor and Termites and Stock, OH MY

HOW ONE PLYWOOD MANUFACTURER IS ADDRESSING THE NEEDS OF A HAWAII-BASED CABINET MAKER

For Wick Rice, owner of 11,000-square foot Wick Rice Cabinetry, it was important to have a supplier who addressed one major problem going on in Hawaii. He found a solution with States Industries.

Now, along with his predecessor Robert Malovic, who will be taking over as CEO next year, he is combating a new industry-wide challenge: the labor shortage. Something that many Hawaiian cabinet shops can agree on, including Rice, is that there’s a lot of money to be spent. “We’re on the big island where they have a lot of new money,” said Rice. “There are a lot of exclusive resorts and it’s really great for us. I ended up on a little island in the middle of the pacific where there’s just a ton of money.” “Building cabinets in Hawaii is a lot different than say if you were in Iowa, for example. Of course there are areas in Iowa with a lot of money, but here you’re dealing with a lot of money everywhere. These people are hiring very good architects and they’re building some pretty impressive projects. In fact, we’re working on a house right now that has eight bedrooms, eight baths and two media rooms.″ The company does a fair amount of work off island, but it’s the on-island projects that bring on unique challenges from loading containers and measurement, to navigating a complete shutdown due to COVID.

A BIG PROBLEM ON THE BIG ISLAND “There are so many risks when working on island, said shop manager and future CEO Malovic. “A mistake can be harder to fix when it’s inner island because then you find yourself flying stuff back and forth. And if you need a measurement, you can’t just drive out to the jobsite.”

Rice said that it got especially challenging during the pandemic due to his hesitance to fly at the time. “We had a job on Kauai and I wasn’t willing to get on an airplane, since no one was vaccinated. So, they had to measure the job for us. Communication was just so important.”

But none of those challenges were as bad as one major Hawaiian issue that all cabinet shops cannot ignore: termites.

“I’ve had a relationship with AWI (Architectural Woods) for 20 years and I trust them. They got together with States Industries and convinced them to start manufacturing plywood with the termiticidetreated glue lines. They had been doing that in New Zealand and Australia for years because those areas have a huge termite problem like we do,” explained Rice.

“Termites have always been a problem here. Not just with me but with all the shops. If you use untreated maple plywood, termites will get a hold of that in a year, and it’ll be gone. States was really the first one to make this happen.”

That’s a huge reason why relationships with suppliers and manufacturers are so important to Rice. And with COVID just around the corner, he would rely on those relationships more than ever.

“Part of it has to do service,” Rice said. “You’re bidding jobs and you’re calling your distributors for quotes, so having them process that in a timely manner so you can get your bids out is very important. When we contact AWI, they have to go back to States and we’re dependent on them to turn stuff around. They do a very good job with that. We can typically get pricing back within three to four days.”

MATERIAL SHORTAGES, SUPPLY CHAIN DISRUPTION When the pandemic hit, there were more issues beyond termites. According to Rice, it was constant communication with suppliers that helped them stay ahead.

“We were pretty proactive when COVID came along, and the supply chain started tightening up,” Rice said. “Our suppliers gave us a heads up. With the C2 maple, they were telling us how they have 60 sheets on the floor, but we probably won’t get another load for 60 days. And in that case, we just buy up the floor.”

“We pre-ordered a lot of material. We probably won’t start this one job we have coming up for another couple of months, but we had to stay ahead and make sure we had the materials in house, so we ordered 200 sheets of three-quarter inch peak plywood for the cabinet bodies and had them well ahead of time.”

But according to Malovic, one major issue the company is still facing is with finishes from pricing to availability. “We had a few scares with finish products,” he said. “One company told us they couldn’t predict how soon they would get more of some of the sheens we use. Some people were saying it wouldn’t be until 2023. So, we would have to buy up a bunch. If they had 80 gallons in, we would get at least 40. It helps that we know what we’ll be doing for the next 18 months.”

Rice agreed, adding that the prices went way up on sheet goods substantially. Before 2020 and the pandemic, they were buying C2 maple sheets at around $68-70 a sheet and now it’s about $115 for that same panel.

The company goes through a good amount of States Industries C2 plywood panels. In fact, the majority of their panels are C2 maple plywood, and they do a clear finish on the interiors.

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The shortage of skilled labor is so intense that it leaves shops like Wick Rice in fear of losing their best workers and scrambling to find more.

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CHALLENGING THE LABOR SHORTAGE Rice and Malovic are waiting and hoping that the curve will eventually go down, but according to Rice, glue is also a big problem.

“It’s hard to say why the price has gone up so much, but one thing that comes to mind is the labor shortage,” Rice said. “And that’s not just for panel processing. Anything in the construction industry that takes glue is experiencing this same problem. Thankfully we’ve been able to keep up. Lead times are a little longer that’s for sure. Some have even doubled.”

“We have a horrible labor shortage here. We lost a really good woodworker who went on to start his own business and we have not been able to replace him. We’ve had ads for finisher and cabinet maker on job boards now for almost seven months. The other problem in Hawaii is that housing is so expensive.″

The shortage of skilled labor is so intense that it leaves shops like Wick Rice in fear of losing their best workers and scrambling to find more.

“We had a scare about six weeks ago where we thought one of our workers was going to move back to Florida. He was a friend of ours who we brought on the team. We knew him, we trusted him, and he is really smart. We were able train him and it’s gone extremely well,” said Malovic.

“Ideally, we would have hired a seasoned cabinet maker, but we had to go with what we could find,” added Rice.

“We also brought in a younger guy who we are training, and he’s really nice but training someone to do this kind of work takes years. You don’t realize how much there is to it. But he’s doing good. He shows up every day on time. He’s intelligent and wants to learn. We already have him running our CNC machine,” Rice said.

Given their experience lately, both Rice and Malovic learned that they have to start thinking outside the box.

“We found two people who we thought were good people to have around, were able to learn fast, and we took a chance on them. Sometimes you just have to take chances and be patient,” said Malovic.

And Rice has also realized that if you’re willing to train someone, you end up with someone who operates how you trained them.

“In a shop you have procedures and ways to do stuff, so there is an advantage to hiring somewhat of a novice so you can train them to do things your way,” Rice said. “We recently had to let someone go because he was a little too set in his ways. We have very good people in our shop. Just not enough of them.” s p