Fit and Finish: Time to hit reset
Can we get a do-over on the start of 2016?
March 15, 2016 By Chris Meorin
If ever there was an opportunity to have a reset button, this would be the perfect time. In my column last fall, I discussed how the fenestration industry as a whole had an uneasy feeling about what was about to come. There were no clear indicators or signs, but a lot of back-room chatter suggested 2016 was going to be an “interesting” year.
That said, the industry appeared strong and relatively stable and on track to a solid recovery. All of us fenestrators were excited and anxious to return to an economic climate that allowed for reasonable margins and a solid return on investment. With all the promise 2016 showed last summer, there was still an uneasy feeling. A feeling I was reluctant to even discuss for fear I might be ridiculed as having a sky-is-falling attitude. “Many of us are doing pretty darn good, all things considered. So why all the inner dialogue?” I asked at the time. Well, the start of 2016 answers that question loud and clear.
In the 30 years that I have been manufacturing windows and doors, never before have I seen such a volatile supply chain. As the Canadian dollar continued to fall in the third quarter of 2015, I’m not sure if any of us had a real indication where this would take us. Even before the currency issues became evident, there was a lot of back-room chatter about supply chain issues. This also was discussed in my last article, and has since manifested into a full-blown upward spiral of rising costs, leaving us fabricators in the precarious position of balancing price increases against market-share retention. In a recent conversation with Barry Ayres of Keystone Certification, Barry summed up the industry as being in a state of “chaos,” and I would have to agree with him on this point. Supply chain price increases have led to knee-jerk reactions. Even those companies with skilled comptrollers and accountants are struggling to stay abreast of how supply chain price increases are affecting selling prices. Equipped with this information, it still comes down to how much of a price increase the market will tolerate without searching for alternates. Things really are in a state of chaos.
With the return to work following the Christmas break, I took the opportunity to speak with as many of my peers as possible to get a pulse on where the industry is heading. Time and time again the message of managing material costs was repeated with glass supply often taking center stage. Rumblings of an impending glass shortage surfaced a while back. It was discussed initially at the truck-load level and started trickling down into the fabricators world sometime around 14 months ago. It seemed, at the time, to be an excuse to justify price increases, but word of shortages continued as did the rise in glass prices. This, aligned with a dramatic drop in the Canadian dollar against the greenback, has left the fenestration industry in a bit of a scramble. Further discussion on this topic seemed to dominate any formal networking including back-room chats at WinDoor 2015, and some industry-associated buyers group meetings. With these variables coming into sudden alignment, it seems not even a ticker tape will keep us window manufacturers abreast of rising costs.
As I continue to talk to my peers about where we are headed as an industry, few, if any are focused on the long-term plans as much as they are immersed in the now. If ever there was a time to push the “reset” button, this is it.
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