When global events happen concurrently, the macroeconomic effects are huge and long lasting. In this short white paper, we consider the events which led us to the current environment and how we’re working hard to find solutions.
Smart Systems UK – Overcoming worldwide supply chain issues
In over twenty years leading Smart Systems UK, Ian Hill has seldom seen such a challenging business environment. Unlike the handful of recessions seen before by Ian, a peculiar set of circumstances has combined to stress demand, supply and development functions within the company – and beyond.
In our latest blog, we’ve been considering mid-term supply chain matters with Richard Strode, CEO of Tridonic UK Limited. Richard’s current view is clearly outlined in the following quote:
“We find ourselves in almost a ‘Perfect storm’ where the effects of COVID have stimulated a massive hiatus in supply and demand. We see the (supply) impact reaching well into late 2022 and recovery is now being hampered by the latest Omicron wave of COVID. On a positive note, however, the outlook beyond 2022 appears positive with signs of strong investment both in the public and private sectors in the UK.”
What issues are being faced within the Commercial Lighting industry?
Firstly, we look at the demand side of the business. After a period of complete stagnation, with commercial spaces reawakening or reconfiguring post-pandemic, and environmental pressures becoming front of mind, many Facilities Management (FM) companies, landlords and their investors are looking to their electrical installations to improve the financial performance of their estate.
Add to this the pressure from customers, employees and government bodies for firms to be more sustainable in the medium term, we suddenly have a market for smart and sustainable installations in thousands of locations.
Of course, this incredible demand is the dream of businesspeople worldwide, but at present there are blockages to overcome…
We therefore must consider supply side matters. With LED innovation and manufacturing mainly located in the Far East, the production line cessation seen in the early days of the pandemic caused an immediate reduction in supply.
Despite this pause being relatively short and reactionary, many manufacturers were hit with wide scale cancellation of forward orders in almost all industry sectors and countries in the service driven west, who all expected recovery to be slow – at best.
Of course, this was far from reality. Demand for all sorts of integrated circuits from those used in cars to lighting increased exponentially, resulting in massive demand and a supply chain from raw materials to the availability of shipping containers unable to cope.
These global issues will take time to resolve, especially as Britain’s exit from the single European market continues to challenge more local logistical issues from port to warehouse – and beyond.
How long will the current situation take to resolve?
Our current forecast is that the pace of manufacturing is increasing and therefore commercial electrical hardware will start shipping early in 2022. This would result in an easing of shortages late in Q1 and into Q2.
A key consideration is that demand remains incredibly high from all industry sectors, so even with increased supply, back orders or delays in supply will be likely into Q3 or Q4, 2022.
While we are doing all we can to improve forecasts and plan on behalf of our customers, we should all use this time to innovate, develop solutions and get ready for implementation as product arrives.
What is Smart Systems UK doing to help their customers?
Firstly, if we are out of stock, the whole industry will be facing the same challenge. Some suppliers may receive items a few days before, some after – but ultimately supply chain issues will tend to resolve at similar times.
Another route is to consider the situation further up the supply chain, i.e., to consider the upstream components which form part of the product design and manufacturing process. By working with leading suppliers such as Tridonic, we can help influence those key suppliers, broaden the supply base and integrate our own standards throughout the cycle.
Our approach is threefold:
- Create a strategy with all our customers to ensure that bespoke projects are planned, approved and installation contractors ready to go as soon as stock arrives.
- Ensure that QC and local manufacturing facilities and assembly resource is available for a just-in-time turnaround of products upon arrival.
- Ian and his leadership team will take time to focus on innovation by working with key suppliers such as Tridonic to create brilliant lighting solutions for all commercial environments. These innovations can then be brought to market as supply chain matters ease into 2022 / 2023.
Smart Systems UK create solutions for every commercial environment. Let us help:
Whatever your requirements, Smart Systems UK’s team of experts can help you design and implement lighting solutions which tick every box:
- Reduced power consumption and energy bills
- Improved efficiency and reduced on-going maintenance
- Better lighting performance over time (less degradation)
- Ability to adjust lighting efficacy for differing environments
- Upgradable for remote monitoring and building control solutions
- Reduced WEEE waste
Don’t waste time, start planning your next lighting project today.
The forward-thinking team at Smart Systems UK are always available to talk about your requirements. Contact them via email or by calling: 02475 093555 firstname.lastname@example.org