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State of the Union 2022 – Materials Handling
Last November, I took a snapshot in time comparing the state of the material handling industry and its supply chain pre-COVID to late 2021. It's time for another snapshot as to the current "state of the union".
Lead Time Improvement
There have been noticeable gains in the time of delivery, with roll form pallet racking making the biggest move. One win has been in the reliability of the delivery date you receive. We have all experienced promised delivery dates only to see those dates slip away. There is certainly nothing more frustrating than unreliable delivery dates and the negative impact it can have on the entire chain (from raw materials up to jobsite delivery). It is more important to have a dependable delivery date rather than a broken promise. As we approach the last quarter, we are starting to see the dust settle a little on these lead times:
| Product | Pre-Covid | November 2021 | September 2022 |
| Roll Form Pallet Rack | 5-8 weeks | 12-46 weeks | 9-15 weeks |
| Structural Pallet Racking | 5-8 weeks | 20-27 weeks | 18-22 weeks |
| Shelving | 1-3 weeks | 3-14 weeks | 5-14 weeks |
| Conveyor | 6-9 weeks | 10–30 weeks | 10-40 weeks |
The best approach is to continue to plan ahead and trust (mostly) that promised target delivery dates will be met. Some might be wondering why we are still seeing long delivery dates in September 2022. The answer is simple – demand. 2022 will prove to be the industry's largest sales year by dollars and volume in history.
NOTE: Last November I reported two material handling product exceptions to the above: Panelized Fencing and Modular/In-Plant structures have held their own regarding delivery. Nothing has changed and they are both still strong with 2 day – 6-week delivery times.
Mellowing Pricing Volatility
In 2021, I noted that the cost of materials had never been so volatile. Last year the volatility was so unpredictable (always going up) that manufacturers could not guarantee pricing. For example, an order you placed today would be reevaluated just prior to production. The uncertainty of your delivery time, coupled with last minute pricing changes, made for some incredibly stressful times. Now, pricing volatility has mellowed, and prices have pulled back from their high points, especially in roll form product.
Where Does a Lack of Labor Hit the Most?
By now, most people are aware of the labor hurdles we have had to overcome in past couple of years, across all types of industries. It affects us all, from your local restaurant, garbage pickup, contractors, distribution, and manufacturing. Surprisingly, it has also affected permitting. In most jurisdictions the time to permit is barely keeping up with delivery time of the product. If delivery times were to get back to the pre-pandemic levels, the product would likely sit for weeks waiting for permitting to go through the process. Once again, the best advice to give is to plan ahead and don't procrastinate.
Lack of labor has pushed the growth in automated solutions. Adding more people and continuing to employ a person-to-product picking strategy is becoming more and more of an obsolete strategy. Customers are demanding faster and more accurate services, which most conventional distribution strategies cannot keep up with. The answer is to have less people doing more work, which is scalable and reliable. McGee Storage and Handling can be your guide; we can help answer your questions and implement solutions that make sense.
About McGee Storage & Handling
Based in Atlanta, GA, McGee Storage & Handling ("McGee") is both a reputable, full-service specialty subcontractor and licensed General Contractor, providing material handling products and solutions, along with select, commercial construction services. With over 50 years' experience and more than 5,000 satisfied customers, McGee has a proven track record of providing traditional and semi-automated systems, tailored to solve your material handling, product storage and movement challenges.
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