2022 Supply Chain Logistics - Feature Sample

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Supply Chain LOGISTICS

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Supply Chain: woes aplenty Nobody needs to be told that the supply chain has many weak links, and that dealing with that reality has been—and continues to be—a major challenge. This feature presents comments from manufacturers as well as industry consultants addressing the situation, and a look at one company that has benefitted by it.

Manufacturers: the supply chain has never been this bad WJI contacted a range of wire and cable manufacturers, and asked them to share their views on the state of the supply chain, how it has affected their operations and their outlook. Below are their perspectives.

WJI: How intense has the supply chain been for your hot-rolled wire rod. The last two years have been incredcompany the last two years, and do you see any signs ibly challenging with regards to wire rod supply. We emerged from the worst three months (March, April, and as to when conditions arehis likelyhigher to improve?education Wire was May of 2020) with demand for wire and wire products

increasing very rapidly, and it has not let up. Then, in late The supply chain issues were 2020 and through much of 2021, each of our domestic rod most intense late 2020 into 2021 suppliers underwent extensive planned (and unplanned) with wide ranging impacts on production outages, some of which are still ongoing today. business. The greatest impact The priceFisher of carbon steel wire rod began to rise sharply.

David was, of course, disruptions in the President From the beginning of the 3rd quarter of 2020, through the timely manufacture and shipment James Monroe end of 2021, we have seen rod prices more than double, of product which, over the course Wire & Cable increasing by over $700 per ton. With virtually all our of 2021, became very costly.

Corporation domestic suppliers restricting orders, we had no choice but Further exacerbating the issue to go offshore and secure imported wire rod just to keep is the current state of the labor from running out. Often in 2020 and early 2021, we had to Fisher market which hasn’t shown any pay prices significantly higher for imported wire rod, due sign of improvement. It is ironic WJI: How much an influence did your dad can’t be passive in thistoindustry.

That 232 tariffs and other issues, such as spiking Section consideringhave how of demand for products and projectthe on the how high you runlevel the company? overall expansion cost about $2 ocean freight rates. Those sudden, dramatic and lengthy services further exacerbates the supply Fisher: He had a big influence.

He chain related million.issues It’s worked out well for us, and rises in prices put a strain on operating cash and increased showed me what it takes to succeed.

To a we added 14 jobs last year, and those creating a vicious circle. There is currently no sign of degree, it’s about technology, but a bigger additions have made us more efficient. the risks of doing business significantly, particularly with improvement.

I’mis waiting my crystal element motivatingfor staff, to get them ball to be delivthe very long lead times associated with imported steel. ered by Amazon so I can get an answer.

We shall see.

Dave to want to do what you need them to do.

WJI: How does the future look?

Andy Talbot, vice president and general manager, Money matters, but people also want to & Cable Fisher: We’re not done growing yet.

Fisher, president, James Monroe Wire Corp. be recognized, and it’s important that you We bought 14 acres across the street, and Mid-South Wire Co., Inc. show that you value them. I love to come

someday we could put up a 200,000-sq-ft

The intensity ofevery supply chain issues in 2020/2021 to work day, and I want our employplant. has That’s long term, but in the short Extremely intense. The problems associated with limited will add 3,000 sq ft more office to feel good it too. been unlikeeesanything weabout have seen in more thanterm 20 we years. space. I see the business as a living entity. capacity for steel wire products have been access to global Since we primarily a wire drawing enterprise, WJI: Howare has the company most changed Weour fight for all our orders. We know we exacerbated by logistics and labor constraints, as well as “supply chain” is dominated by one particular product since you became president in 2005? have to do… right for our customers and we uncertainty Fisher: You need a feel for how the inknow we have to continue to improve,of demand caused by supply chain disruptions

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dustry once did business to understand this. and that is a good thing. This business matters to us all, and that includes the In past generations, there was more focus on succeeding for yourself. It wasn’t that families of our 96 employees. We never W I R E you J O Udidn’t R N Awant L I Nyour TER N AT I O or N AvenL F E B R U forget A R Y 2that.

022 customers dors to succeed, because you did, but your primary concern was on making a sale and WJI: Are you looking forward to serving

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Supply Chain solutions? It comes down to actions ... and people Thomas J. Rosen, president and CEO of Wire & Cable Consulting, LLC, has nearly 40 years in the industry, holding executive positions with companies such as IWG High Performance Conductors, Phelps Dodge Corporation and Nesor Alloy Corp. Below, he shares his thoughts about the supply chain. He can be contacted at tel. 973-228-5589, rosen.tjr817@gmail.com, www.wirecableconsulting.com.

We are living in new times. Nobody foresaw what was coming in terms of Covid and labor issues, the great resignation wave and everything else that’s happened the last few years.

The days when you could depend on overseas suppliers to deliver in five or six weeks are gone. That same timeframe can be four or five months.

That causes problems for our customers, which I want to make clear here make value-added products.

The supply chain and the wire and cable industry need to understand how to handle the ebbs and flows of the business. But first I want to address something that is part of the equation, even if it might not seem so. The industry will always have issues—and sometimes, like now, they may be quite harsh—but I have learned over the years that you cannot overestimate how important it is to value the human element.

People are extremely important, and we need to offer or meet issues on the physical and mental health that help keep them together. People need more family time. Working 60-plus hours a week is not a long-term solution.

People need more time off pursuing things that bring them a sense of purpose. If they achieve short-term and long-term success as individuals, that will help them in their work roles. They become part of your solution that you won’t find in a spreadsheet. Think about it.

Now for the supply chain. First off, it won’t come as a surprise when I say that there are no easy solutions, but that does not mean you can’t take some measure of control. You know what you need and when, but how well do you know what your suppliers can and cannot do? Relying on them just to “do” or “not do” is not enough.

You have to work with good suppliers, and that means companies that are investing in their businesses.

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You have to work the supply chain all the way back. Capacity obviously is a key issue, but so is their personnel. Is the company stable? Does it have the cash flow and resources to invest in its future? Some may not be strong enough, so sticking with a supplier without knowing more about them is not wise. Learning more about suppliers may ultimately force you to look elsewhere. If you don’t want to do this, then find another business, because your future maybe in doubt.

Beware of suppliers that stick to the outdated 80/20 principle. One of our clients had such a supplier, which had contracts and agreements, and took care of the 20% clients first.

They didn’t like minimum quantities, specials or anything “out of the norm.” Our client, who started manufacturing cable assemblies for Steinway, could not get product from his supplier. We found him a new one. We explained the business and provided the specs to the new supplier that had not been active in this niche, and was interested. Both our client and the customer benefitted.

We encourage our clients to develop new suppliers. You hear a lot about supply not being available, but generally speaking, I have found that materials can be found, even in small quantities. I have one client that will, and he’s very good at it. He also gets paid well for it. And guess what?

He’s getting more and more business because the big guys don’t want to do small quantities anymore.

There’s a flip side to this too. How well do you treat your suppliers? A lot of big companies don’t excel at that.

I always made sure that I personally engaged suppliers, and enjoyed meeting them and seeing their operations.

That’s changed in the last two years, but it’s still possible through zoom and the like. If you keep in close contact, you may find opportunities. Also,

keep in mind that the wire and cable industry is a supply chain unto itself, as many companies sell to cable Rosen manufacturers, who in turn sell to OEMs. It’s a difficult time for companies that need rod and metals that either require large sizes or require special technology for different applications, as they are not as easy to source overseas as they are in North America.

There are limited places people can go, so such manufacturers are basically held hostage, which is why highvalue product makers are better off.

I have one client that buys redraw and fine wires, and silver-plated wires and alloys. Those products are limited in the supply chain, but because we were able to show the supplier our needs six months out, we were able to get what we needed. That takes planning. If you cannot show vendors your plan, you can’t expect them to commit to late requests. You want to ask the supplier what they can do to help.

I don’t see conditions changing much in the next year. I think we’re stuck in a conundrum here. We all know the symptoms of the supply chain, but I keep thinking about the one element that gets lost in the discussion of what needs to be done, and that goes back to people. They make it all possible.

I spend a lot of time helping clients with their long-term plans. Anyone who isn’t—or thinks that conditions will revert back to what they were, and that we can all go back to walking our dogs the way we used to—is dreaming. This is the new norm. We have to figure out how to navigate it, to be flexible, quick and nimble.

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in other categories. This environment has disproportionately shifted (negotiating) power toward the bottom of the supply chain, forcing adjustments in cost and lead time expectations that are in many cases real, but in many other cases are also very opportunistic. Marty Krashoc, president, All-Rite Spring Company.

Starting with 2020 and continuing into 2021, Covid-19 has affected us in many ways, both large and minuscule.

We are lucky to be in a niche part of the wire industry that has grown with consumers staying at home and enjoying audio and video. We fared well with quick responses to adversity followed by long-term solutions. We contacted each of our suppliers to understand their challenges, to adjust our purchases to maintain our supply and to provide assurances that we would continue to support them. We shared what we were doing to stay stable, safe and operational. Ray Kimber, president, Kimber Kable.

It has been very intense the past two years with regards to dealing with the supply chain. Especially on the steel side of the business.

Due to many different factors, the availability of raw material has been scarce. And the lead times are what some may consider insane. In some cases, it’s 24-28 Swanson weeks to get raw material. You spend half your day trying to find material and the other half of your day trying to calm down your customers. Bob Swanson Jr., president, United Wire Co., Inc. Supply chain issues have been either the #1 or #2 challenge for our company the last two years. We are an independent producer of steel fabricated-concrete reinforcement solutions. We live or die by consistent deliveries and constant volumes of hot-rolled rods. This past year presented unparalleled supply issues, beginning with a significant domestic imbalance in the supply versus demand for steel. It was exacerbated by multiple unplanned outages, combined with unseasonably planned outages, and further aggravated by the current 232 tariffs and dumping duties that inhibit import relief. The cumulative effects of those issues have resulted in poor production performance and less-than-satisfactory delivery performance to our customers, which is unacceptable. Jim York, senior vice president, sourcing and logistics, Insteel Wire Products.

In the nearly 50 years I have been in this industry, I can only think of one time when supply issues were this severe. I think it was 1973 to 1974 and you couldn’t get PVC because of a resin shortage. If you can’t get PVC, you are pretty much out of business, so it was a very tenuous situation. The supply chain issues today are affecting

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every component and every subcomponent you use in your day-to-day operations. It’s like Whac-A-Mole: you solve one problem and another pops up. The supply chain is so damaged that any of a number of issues can make it worse: lack of labor, the pandemic, weather, regulations and so on.

As 2022 started, I would say things are actually a bit worse.

I see no signs of improvement, and fear the only thing that will improve the supply chain is a reduction in demand, which we call a recession. No one is looking forward to that. Richard Carr, president, Sequel Wire.

It has not been as bad for us as it seems to have been for others. We source most of our raw material domestically.

If not domestic, then it’s melted in the EU. By design, we have very little in the way of import Asian or East Asian material in our supply chain. I’ve always felt that reliance on certain markets for the purpose of simply chasing pennies made no sense. Domestic/EU manufacturing and sourcing of input material locally shortens your supply chain and offers a level of protection from unforeseen events, like Covid. It also enables a smaller environmental footprint. We limit disruptions by being as flexible as possible between facilities. Having 13 facilities and a deep inventory of grades and tonnage has allowed us to do that.

I see the conditions that others are now facing getting more difficult as geopolitical tensions rise and regional strains continue. I’m glad we’re not heavily exposed to these markets, especially in the East. That’s scary. Paul From, president, Central Wire Group.

WJI: Can you compare this to any past periods, or is this unique in its scale/widespread impact?

I think our world is (and has been) changing fast enough to say this situation is entirely unique, even if similarities can be drawn. It doesn’t mean, however, that we shouldn’t be drawing on prior lessons. There’s always a better way to manage,d your “eggs” and “baskets,” depending on the exact environmental context of the day. Marty Krashoc, All-Rite Spring Company.

What we experienced in 2020/21, with regards to supply chain issues and burgeoning demand, has exceeded the magnitude of what we experienced in similar periods like 2003/04, and the run up to the 2009 banking crisis and the great recession that followed. The difference is that the 2020/21 surge in demand levels, supply chain issues, materials shortages, surging pricing and labor shortages has not abated. We continue to see severe constraints in the supply of wire rod. Of course, prices, labor shortages and transportation delays and costs also remain very challenging. We all remember the boom in business in 2004-07, but we remember even more how suddenly and painfully those boom periods ended. We’ve spent much of the last two years enjoying strong business levels and improved

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margins, but we are always mindful of the risk of a sharp correction. For example, the last time we saw the price of scrap near current levels was in July 2008, when prices reached almost $600/ton. Four months later, that price fell to $125 per ton. That crashed the rod and wire markets, and sent inventory valuations and finished prices down dramatically. At times like that, wire drawing companies must digest some layers of higher-priced inventory at a loss, which can threaten the viability of an enterprise. Andy Talbot, Mid-South Wire Co., Inc. Parts of this we have seen before, but not all of it and certainly not all at the same time. We are just starting to see the impacts of higher alloy prices, which are going to continue for quite a while. The markets for EVs and batteries are growing exponentially and From there’s no indication of supplyside relief to these price pressures, especially for nickel and cobalt. That’s a concern.

Paul From, Central Wire Group.

Not in my 33 years can I compare this to anything. Dave Fisher, James Monroe Wire & Cable Corp.

This absolutely is a unique, never-before-experienced situation we are navigating. Matthew Duncan, vice president, Granite Falls Furnace.

In the 20 years I have been in the business I have never seen anything like this. But back in 2007/2008, there was a steady increase in steel pricing for a few months. That was a small headache due to continually having to contact your customers about price increases and getting the push back, but you had availability of material. So, it was not intense.

Bob Swanson Jr., United Wire Co., Inc. I have been in the steel business for 35 years, and have experienced challenging periods to acquire steel, but never to this sustained degree. Jim York, Insteel Wire Products.

WJI: What kind of changes has your company made to be able to maintain production? Have you found new suppliers?

Despite the severe impact of the supply chain issues, we can offer the same products and continue to work through the challenges with our existing suppliers. The strong relationships we have developed over many years with our supplier has proven to be our greatest advantage as the

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company faces some of the most difficult times since its founding.

With regards to supply, we have had to scramble to find material for most of the last two years.

With the wire rod trade cases filed in 2017, and then the Section 232 tariffs on steel and aluminum, the U.S. steel wire drawing industry Talbot was almost wholly dependent on an aging U.S. rod industry that has proven to be unable to supply their customers at periods of peak demand. As a result, we have had to turn to the import market and pay higher prices at times, with the risk of lead times as long as three to five months or more from countries like India, Malaysia, Egypt, Vietnam and others.

This significantly raises the risks involved in the event of a sharp price correction, but the alternative of running out of material for customer needs, is unacceptable. Andy Talbot, Mid-South Wire Co., Inc. We are not out looking for new suppliers. Suppliers are the most important component in any business, and we

go to great lengths to keep those relationships as strong as possible. We’ve always taken the long view when it comes to sourcing material. Our relationships ensure we are getting exactly what we need. Qualifying a new supplier takes time and can’t be rushed. Re-sourcing raw material because of disrupted supply chains means risk, taking chances. You pay a big price for that. We’ve worked hard to minimize exposure to that risk. Given the length of time we have been in business, if we don’t know a supplier by now, then there is likely a good reason for that. There is no market we have moved away from in the last two years.

We regularly evaluate our markets from the standpoint of longevity, capacities, and product offerings. If there was an area we were not thrilled with for any reason, we exited years ago. We have seen companies from those markets coming back to us today and asking about capacity. That’s driven by their off-shore liability, and we will help when we can but there are limits to what we can and can’t do.

History shows that when this changes back, buyers will rush back off-shore. That has to be understood, and this doesn’t mesh with our philosophy. Paul From, Central Wire Group.

An outside view can clarify supply chain issues and solutions St. Onge, an international consulting firm, specializes in the supply chain. The company’s customer base includes manufacturing, and the list of customers at its website includes Sandvik/Kanthal. WJI asked the company what it can do for the supply chain. Below, Mike Noll, U.S. managing director of manufacturing services, shares his thoughts. He can be contacted at mnoll@stonge.com.

Manufacturers can excel at making high-quality products, but that expertise may not extend to extreme conditions and situations. That’s where St. Onge comes in. We provide management and operations consulting services across all business aspects that include the supply chain, which has never been more important.

The question that company leadership should be addressing is this: are we responding as well as we could? We all understand that doing nothing is a recipe for disaster. The opposite response of overloading the supply chain with a bunch of false demand to increase your on-hand inventory of raw materials is not the answer either.

When did you last really look at your supply chain and all of its critical aspects? Have you ever had someone from an outside consulting group analyze and break down every aspect of your supply chain from the customer order all the way to the actual shipment? How do you know that your internal systems, ordering practices, and inventory strategies are up-to-date and nimble enough to respond to these industry challenges?

St. Onge provides a deep-dive analysis. Our supply chain assessment is the primary response a manufacturer needs in trying times. Demand analysis, inventory strategy, ware-

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housing, scheduling, systems, and supplier partnerships are all facets of the response.

Working with your suppliers is a very important part of a company’s response, but there are other considerations. Have you updated your MRP and horizon planning for the new norm? Have you Noll assessed the days-on-hand inventory for your SKU base? Again, working with your suppliers is vital, but you have to be part of the solution.

Has your company done a recent cycle count or physical inventory to true up your system and reassess your warehousing and slotting methodologies? Inventory accuracy drives accurate demand. And what about your production schedule? Have you considered internal changes to provide some cushion to the supply side of the system? Leveling off production to align with consistent levels of supply removes much of the firefighting and chaos companies see on a daily basis. Think about these questions and ask yourself, are you ready to get help?

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Supply Chain delays a plus/minus for used equipment dealers With the Covid-19 effect adding to the already long delivery times for OEMs that sell wire and cable equipment, one would think it would be a golden period for those that have warehouses full of used systems. Below, Erik Macs, director of sales for Wire & Plastic Machinery (wireandplastic.com), explains why it has been both good and not so good.

WJI: How was the used equipment market before Covid-19, and how has it changed since then?

Macs: Prior to Covid-19, business was steady but not booming. As with everyone else, the initial year of the pandemic was problematic mainly due to personnel issues. The supply chain issues brought on by Covid exacerbated the situation. As new machinery dealers struggled to get parts and supplies (and people), the natural trend accelerated to getting what is already available. It is not a perfect scenario, but when a wire manufacturer needs to increase production, having a somewhat suitable machine will tend to beat out waiting for the latest and greatest.

from a 240,000-sq-ft facility in New York. What we could not sell off of the manufacturing floor, ended up going to our warehouses. We are in the midst of a similar liquidation of a smaller company in Massachusetts as we speak. Turnover of equipment will always be there, and our more-experienced customers also know that the early bird gets the worm.

WJI: What used equipment has been in greatest demand since this period began? Are newer systems usually chosen?

Macs: The range of machines that we have been selling over the past two years hasn’t greatly changed from before. That is to say, it is not

WJI: If you are getting substantially more inquiries, are callers more flexible in what they want? Are they quicker to close deals?

Macs: Everyone is fully aware of what is going on with the supply chains and thus are more flexible in their requests.

Our advantage is having a ready supply of alternative items that can be substituted, be it finding compatible spare parts within our own inventory A sampling of used equipment offered by Wire & Plastic or taking parts from similar Machinery, which has 10 warehouses in five states. machines. And with delivery timelines, our customers realize that really predictable. A lot depends on they sometimes may be better suited the source and quality of the newer to do any required refurbishment inventory. Payoffs and take-ups are on their own. In other words, we’re probably the most consistent prodgetting more calls and we’ve been uct as they belong to a wide range of busier. processes. And as with anything else, supply and demand dictates what you WJI: Do you have enough inventory can get for any type of machinery. to meet demand?

If supply of any particular item gets overabundant, we have to be cogniMacs: We advertise ourselves as zant to the pricing structure. having the largest inventory in the The used machinery business is a world. Wire plants have been opening history lesson. Just walking through and closing all the time. 2021 saw us our warehouses can show how differsell off quite a bit of the equipment ent companies have thought about

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different ways to tackle certain processes. I once chatted with a senior research engineer who told me that if Macs you think you’ve come up with a unique design solution, it is virtually guaranteed that someone in the wire industry has already thought of it at one point or another. Sometimes it is the oldest machines that are the right solution to a problem.

WJI: Is it simple for you to deliver a system?

Macs: We have heard of various OEMs now being out one year and more for delivery. We’re obviously better than that, but when we refurbish a system, we have the same trials and tribulations getting new parts as everyone else. Electronic components such as PLCs and drives appear to be in the worst condition. It is difficult to come up with one set timeframe as the variety of equipment and scope of each project can be dramatically different.

One major advantage we have is that some liquidations/acquisitions come with substantial spare parts inventories and we can go to our own shelf more often than not.

And yes, we have trucking and people issues too.

I would like to note that the camaraderie and closeness of our industry has not been in short supply. For instance, our engineering manager was in contact with a competitor recently. They were looking for a specific drive and we were looking for a certain part. We helped them find their drive and they helped us find our part. We all should be cordial to one another in the wire industry.

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The supply chain matters, but our story is more one of what we did to continue being able to produce, so that we were not the problem in getting our products to our customers. Most of our production of high-end audiophile cables would be impossible with “remote” employees.

Kimber We immediately changed our behavior and made changes to our offices and factory. We installed a remote body temperature reader that uses a thermographic camera linked to a small laptop. The camera views both the employee and a calibrated IR emitter in the same frame. We purchased clinical-level touchless forehead thermometers for each employee to take home, along with clinical level oximeters for each employee. We didn’t expect any return reporting, but this allowed employees to monitor themselves and persons in their household. We engaged a service that performed a PCR test on all employees, to guard against asymptomatic persons. We changed bathroom fixtures to be touchless, and during shortages we made our own hand sanitizer using aloe and Everclear. We upgraded the MERV rating on all filters, increased the outside air mixture, and programmed the fans to run longer. We also paid for a

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few hotel rooms when employees needed to quarantine, and waived any deductions from sick/vacation days.We supported and incentivized vaccinations and took additional step to safeguard unvaccinated employees. There were a few small parts that became unavailable, but we only discontinued two or three of our 4,000+ products.

Ray Kimber, Kimber Kable.

We have reduced our customer base and product range in order to ensure the service and dependability our customers expect from us as a supplier. Matthew Duncan, Granite Falls Furnace.

Sequel is a new company. We starting production in July 2020. Because of our previous years in the business, by then we had picked the vendors we wanted to be our partners. Even though each one of them has had their share of issues, some way or other they have always come through. Most of the products we purchase you can’t find another vendor for because they are not taking on new business. Our facility is sold out, so we can only produce our capacity. We have ordered more than we really need, anticipating interruptions, and we are also carrying more inventory than we would if the supply chain was working properly. These past two years are like 100 lifetime events all going off at the same time. What doesn’t kill you

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COMPANY PROFILE

makes you stronger. Our vendors are outstanding, and we couldn’t do it without them. Richard Carr, Sequel Wire.

The main change we have made is in our ordering of raw material. Prior to the supply chain issue, I would rely on the warehouses/distributors to have wire stocked on their shelves. Nowadays they are struggling to keep wire stocked and available. So once I receive an order from a GRANITE FALLS customer, I immediately order the wire and have it delivNORTH ered. The problems that could incur with this is cash flow CAROLINA and storage space, but we have been able to avoid those problems. No, itCOMPANY was not necessary to find new suppliers.

Our suppliers have done Granite Falls an excellent job of locating raw material for us.Furnance Some of Co.those (GFF) I would like to thank include Principals: Dave and Cincinnati Metals, Siri Wire, Precision Metal Services, ERA Matthew Duncan Wire, Central Wire, REA Magnet, Elgiloy and Mapes, among tel. 828-324-4394 many others. Bob Swanson Jr., United Wire Co., Inc. granitefallsfurnace.

due to part delays, delivery times extended due to shipping, and on-the-shelf availability of spares. These are all going to continue to be a challenge, if not worsen. Paul From, Central Wire Group.

2 brothers on a steel wire mission

PROFILE

The most difficult hurdle for wire production is overcoming the issues not related to our own facility, but the continued struggles of wire rod suppliers. Yes, there have been a andcaused by the lack lot ofDave hurdles Matthew of labor in all Duncan areas of business, Granite Falls but the biggest key ingredient to Furnance making wire is Co. having wire rod, and that has been on allocation for over a year now from all domestic and Canadian rod suppliers.

Take the continued issues with labor and transportation, then add com thehave upgrades being implemented Duncan Brothers Duncan: We lots of good WJI: We’ve got to start with your compaThe automotive supply chain is particularly brutal forany confusion? Any stuff to say here thatat thevarious editor willwire be rod mills that are ny name: does it cause most pleased to run when sees ourschedule, and top it plans to change it to include “wire”? way he behind those intent on FOCUS maintaining impeccable performance Founded in 2003 by replies to his questions, as inane as some Brothers Duncan: We have lots of good rod records, withoutDavid making compromises. arehere forced L. Duncan, Sr., of them may be.

Wemill may equipment believe that thefailures, and the stuffWe to say that the editor will off be with unexpected initially was a supresult is an Olympic to evaluate andGFF approve new suppliers, but cannot dowhen so he sees our editor gets paidhigh-hurdle by the number contest of weird where the industry most pleased to run of products for he sends, so he can rant here it in week after week. replies to his questions, as inane as bar someis set questions so high that nobody can clear without explicitplier support from our customers who are overthe recycling and conthis space because he will s-m-i-l-e one he of them may be. We may believe that the Matthew Duncan, Granite Falls Furnace. whelmed with such requests.

And compromises in this struction industries. sees our replies, which we can assure you editor gets paid by the number of weird The company alsoadded had regard have a potential for quality risk,hewhich ishe can rant here in the readers will nd far more interesting. questions sends, so furnace technology. In Also, we take a much photo than thispresident, space becauseAll-Rite he will s-m-i-l-e one he Fortunately, this has gonebetter in cycles so the the difficulties simply unacceptable.

Marty Krashoc, 2011, it acquired wireeditor, who really could use another photo sees our replies, which we can assure you drawing equipment, came at different times.

It was the Texas freeze in February Spring Company. but hates to have them taken. the readers will nd far more interesting. and the brothers, of 2021 that affected PVC supply.

Still working out of Also, we take a much better photo than the now also principals, WJI: You exhibited at Interwire for the editor,out whoacross really could use anotherthat. photoIt was mid-to-late summer when you could not get As we see thebegan supply chain issues play nearly to transition rst time in 2015: what was that experibut hates to have them taken. a full-time supplier any copper rod. every industry, tothe impact on every company can vary ence like?This is where your network had to go into of drawn steel wire youDuncan: could survive.

Again, the supply base dramatically. One of the biggest challenges formuch a custom Brothers We have lots of good WJI: How has your companyaction so that and annealed wire stuffindustry to say heresaved that theSequel editor will be evolved since it began manufacturing products. insteel this great through those difficult cable manufacturer facing unpredictable raw material most pleased to run when he sees our wire? Has your customer base expanded times.

Richard Carr, Sequel Wire. supply is the impact to work in process on the manufacturreplies to his questions, as inane as some much?

OF NOTE ing floor. A buildup of work, that has started cannot of them may be. We may believe that the Brothers but Duncan: We be have lots of good and Matthew editor gets paid by the number weird and converting stuff to saycapital here thatand, the editor will beAgain, being 100% focused on of buying completed, hasDave a severe impact on operating Duncan note that famquestions he sends, so he can rant here in most pleased to run when he sees our wire rod, the related supply chain issues mentioned above in turn, can create another set of challenges to overcome. ily ties do not assure a this space because he will s-m-i-l-e one he replies to his questions, as inane as some stronger operation, but have and our we most challenge.

Fortunately, being a privately held business andbe.part sees ourremain, replies, which can significant assure you of them may We ESOP, may believe that the been, in their case, they say the readers will nd farWire more interesting. editor gets paid advanby the number of weird Andy Talbot, Mid-South Co., Inc. loyal employees have proven to be another great that it has been a major Also, we take a much better photo than the questions he sends, so he can rant here in tage in overcoming thebrothers challenges wethis face inbecause maintaining plus. The editor, who really could use another photo space he will s-m-i-l-e one he haveFisher, been in business International policies involving steel tariffs and production. Dave James Monroe Cable but hatestrade to have them taken. sees ourWire replies,&which we can assure you before, and while Dave the readers will nd far more interesting. import (weight) quotas have created the most difficulty for Corp. has always been more WJI: Do you have specic long-term Also, we take a much better photo than the focused on technical us.

Marty Krashoc, All-Rite Spring Company. goals you are pursuing? editor, who really could use another photo matters, Matthew is more at home representing the company to customers. “We’re lucky

but hates to have them taken.

Brothers Boyle: We have lots of good

stuff to say Ihere the editor will has be been especially The only aspect canthat think of that most pleased to run when he sees our WJI: This has not been an easy time for isreplies locating such WJI: Is there because any one aspect of the supply chainhow has yourdifficult to his tempered questions, as steel inane as someas chrome silicon the steel wire industry: comgoing to our plant chromeofvanadium. to the lack them may be. Due We may believe thatof themills that have pany fared? What are you focusing or on to like going to anotherdifficult? that has beenisespecially family home,” they say. gets paid bythe the number of weird. remain competitive? temperingeditor capabilities, lead times are anywhere from Parts for equipment. Local machining capacity for 28 weeks to almost a year. How do you quote a customer a replacement parts. New equipment delays from vendors 6 | WIRE JOURNAL INTERNATIONAL

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F E AT U R E

48-week lead time? It’s insane. Bob Swanson Jr., United Wire Co., Inc. The impact of a reduced output capacity and freight logistics have been especially difficult as we struggle with the ability to complete and ship finished product to our customers. Dave Fisher, James Monroe Wire & Cable Corp.

WJI: Do you try to order out further than usual, or is that not possible or practical?

Ordering further out has not benefited us domestically.

The mills are on allocation, so you get what you get. Jim York, Insteel Wire Products.

reduces the impact of a correction. We bought virtually everything that was offered to us, at ever increasing prices, hoping that the correction, when it comes, is not too severe or prolonged. Hope is not a good business strategy, but the alternative of running out of your one basic raw material can push companies to take extraordinary risks. Andy Talbot, Mid-South Wire Co, Inc. I can order further out for a few customers based on their past buying history but that is in anticipation of them placing orders. If their product line slows down or becomes obsolete, then you could be stuck with raw material and no outlet for it. But that is the risk you sometimes need to take.

Bob Swanson Jr., United Wire Co., Inc.

If you are “lucky” enough to have customers who can/will wait or a properly functioning crystal ball, I guess this is not necessary.

All others should be ordering early and often. Marty Krashoc, All-Rite Spring Company.

If we are asked to do that, we have no issue. What we are more likely to be asked is to give a forward projection on volumes. This has been more difficult, especially at the start of the pandemic, as many companies reacted with lockdowns. There is more visibility now, and it is getting better. With demand from some customers higher now than before the pandemic, understanding the reasons behind that and how they will continue or not is our challenge. Paul From, Central Wire Group.

Krashoc In a period where prices have been sharply increasing every single month for over a year, it has not been possible to go further out and hedge our supply or price. That may be a blessing in disguise because lower than normal inventory

We place orders primarily based on actual demand and do not speculate or build unnecessary inventory volume. It is cost prohibitive due to the large variety of raw materials we utilize in custom cable manufacturing. Dave Fisher, James Monroe Wire & Cable Corp.

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WJI: Is there any silver lining from a manufacturer having to find deal with supply chain issues?

Absolutely. We are pressure-testing alternative paths that we otherwise couldn’t have (time) justified, and are learning to change direction faster. The disruptions of this market have also allowed for fresh contract term discussions with customers that perhaps wouldn’t have been possible otherwise. Marty Krashoc, All-Rite Spring Company.

I am a glass half-full guy. Times like these build your legacy. For you, your company, your team, your customers and certainly your vendors. I believe no one in business today has experienced what we are going through. There is no playbook you can take off the shelf. Those that make it through this will be better for it. Richard Carr, Sequel Wire.

Carr

As of right now, I don’t see a silver lining. It may even get more intense before it gets better. Some companies may unfortunately go out of business due to the supply chain issues. Bob Swanson Jr., United Wire Co., Inc. I can only reiterate the importance of having solid relationships with suppliers and the ability to provide as much support as possible to employees in times like these; without either one of the two you cannot operate a business effectively when catastrophe strikes. Dave Fisher, James Monroe Wire & Cable Corp.

That would be that we have had to, by necessity, sharpen our forecasting tools, and our ability to make informed decisions in a timely manner. Also, we have worked hard to keep the last two years of elevated business levels in perspective. We cannot become complacent, we must watch for, and prepare for, the downturn when it comes.

Andy Talbot, Mid-South Wire Co., Inc. From a customer perspective, we have gotten to know a lot of our customers in a much deeper way. There is value from that vantage point both short and long term. We’ve developed insight that we would not have otherwise had, resulting in investments in new equipment to service those customers and to enter new markets. Our medical business has accelerated in a way which surprised us, given the changes in how health care is now delivered and the emergent strains of Covid. These new opportunities have been a great thing for us. Paul From, Central Wire Group.

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WJI: Any other thoughts or advice?

I can only reiterate the importance of having solid relationships with suppliers and the ability to provide as much support as possible to employees in times like these; without either one of the two you cannot operate a business effectively when catastrophe strikes. Dave Fisher, James Monroe Wire & Cable Corp.

I don’t know if anyone is trying to pinpoint the root cause of the supply chain issue. What created this? There are many candidates.

Labor shortages. This has been forecast for quite some time as the baby boomers leave the work force. The pandemic. If you go to work not feeling well, you could be labeled a murderer, so maybe 10% of this already-toosmall work force is missing every day. Working from home.

People are just not connected to the urgency of their operation’s needs. Government. Too many dollars were pumped into the economy, and more online home shopping created huge demand, maybe a false demand. Bad weather. This triggered the dominos to fall, and has put us in the current situation.

One possible solution would be to get all the people we can back to work. Short of that, unfortunately, I think the economy has to slow down. We call that a recession. Richard Carr, Sequel Wire.

My only advice is that during this pleasantly surprising upsurge in business levels, we should take some time to consider some fundamental questions. First, we should do our research to understand the root cause for the surge in demand that we have seen over the last 18 months.

We should ask ourselves if this surge is exclusively from aggressive government fiscal stimulus, or is it from broadbased, structural and organic growth of our markets? Then, based on those conclusions, brainstorm just what could reverse the trends that we’ve been experiencing over the last two years. Finally, we should enjoy the ride but check the rearview mirror regularly and carefully! Andy Talbot, Mid-South Wire Co., Inc. All these issues, supply chain or Covid related, and the stress which that brings to all companies has brought clarity and open conversations directly to the shop floor. Each of us carries the weight of everyday life into the workplace and that has gotten heavier. I think it’s made us all better listeners. At least I hope it has. Paul From, Central Wire Group. n

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