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Dealing With HVAC Supply Chain Issues

Dealing With HVAC Supply Chain Issues

The COVID-19 pandemic put the global nature of manufacturers’ procurement systems under the spotlight. Unfortunately, many of the issues that arose are not so easily solved moving into 2022 and beyond. In fact, service providers will need to be careful to ensure they have the parts they need due to ongoing HVAC supply chain issues.

What The Pandemic Taught Everyone

For nearly every manufacturer of heating and cooling systems, components are sourced from wherever they can be most cost-effective while maintaining quality standards. So even when companies are based in Europe or the Americas, motors, fans, and other components may come from China, Eastern Europe, Mexico, or elsewhere.

The coronavirus certainly put the interconnected nature of the world into sharp relief. With people unable to go to work in warehouses and throughout the supply chain, sourcing critical parts led to headaches worldwide, with heating and cooling systems manufacturers facing similar problems.

Why Some HVAC Supply Chain Issues Will Last

When parts were available with short lead times, there wasn’t much of an issue with inventory tracking. Make sure that the warehouse looked about right, that technicians kept up with the components they had on trucks and things would generally work out. While not exclusive to HVAC service providers, a recent survey found that two in five businesses don’t track their inventory, with two-thirds of the ones that do relying on manually updated spreadsheets.

With a fair bit of guesswork still incorporated into purchasing patterns, it wasn’t surprising to see during the pandemic that the value of out-of-stock items was $1.14 trillion while $626 billion in stock laid on the shelves because customers didn’t want it. While focused mainly on retail, this highlights a key issue: having some form of predictive data, at least from past purchases, is crucial to service businesses.

There are reasons to be optimistic about HVAC supply chain issues resolving themselves to an extent with the end of many people movement restrictions; the pandemic highlighted the following stressors on the movement of critical components:

  1. Port slowdowns: The biggest ports, like Oakland, CA; Los Angeles, CA; New York, and  New Jersey, all have seen massive delays in containers being offloaded. There is little incentive for this to improve.
  2. Trucker shortages: The biggest issue for machinery and components is getting it off container ships (if coming into the U.S.) and then moving it around the country. The industry remains reliant on independent contractor networks that are seeing a drastic drop in numbers
  3. Train capacity issues: Similarly, cargo movement on trains is demand-intolerant: train companies have adjusted rates rather than increase capacity.

How to Minimize Disruptions for Customers

The distributor system for HVAC manufacturers puts service providers at both an advantage and a disadvantage compared to other industries. There are fewer quality checks to perform when assessing vendor quality because they are all manufacturer affiliated. However, that does not mean that every distributor operates the same way.

Some will continue to stock more parts than they have in the past and monitor lead time issues with oft-ordered components, and others will operate on the assumption that since the pandemic is over, the supply chain issues should begin to ease up.

Understanding the relationship a distributor has with their sourcing can help a service provider minimize their potential issues from being downstream. It also dovetails into a more important factor in choosing an OEM parts vendor: experience.

Forecasting parts needs requires not just an understanding of what HVAC maintenance providers have bought recently but also a deeper understanding of the ecosystem of a manufacturer’s models. Different components have different average lifetimes, especially in harsh conditions. Working with a distributor who plans and can see when a certain component might be a popular part for numerous service providers can minimize several headaches involved with sourcing.

Get Replacement Parts During HVAC Supply Chain Woes

As a leading distributor for the most trusted names in commercial HVAC, Affiliated Parts has the kits that you need and the experience dealing with HVAC supply chain issues to maximize the performance and efficiency of your systems or those of your clients. Shop our complete list of replacement parts for commercial HVAC systems or contact us for more information.