Sales and marketing director of Blum UK David Sanders says everybody has a part to play in minimising the effects on the supply chain

Supply issues in the kitchen industry have been well-documented, with a global surge in demand following the ease of lockdowns, and a shortage of raw materials.

Furniture fittings manufacturer Blum reported an “above average” growth of 24.7% on the previous year, and although having invested €259million in production worldwide, the company has needed to adjust delivery times to cater for the rapid growth in demand.

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Sales and marketing director of Blum UK David Sanders explains: “In the last 12 months, supply issues have been caused by a multiple reasons.

“In the early stages it was capacity related, now it’s just a basic lack of raw material in the world.”

Revised ordering

In a letter sent out to all its customers, Blum reported it has instigated a revised ordering procedure on all key product lines across its ranges, for customers who buy direct including distributors.

For each of its customers, Blum has calculated an Average Monthly Usage which is the amount that can be ordered each month.

Any order going above the figure will be placed into a stock allocation process and if there is sufficient local stock holding will be despatched.

If there is not enough local stock holding, it will be placed on back order and delivered at a later date.

David Sanders says it offers the fairest way to allocate limited resources. “We took that decision to say every customer is important to us, whether they buy a box of hinges off us every month or whether they buy a million hinges off us.

“Now that doesn’t mean we can give every customer exactly what they want. Nobody is hiding away from the fact that there isn’t enough for the demand.

“But we made the decision every single customer got something and if we’ve got it all you can have it all. So, it’s a fair and equitable distribution of product.”

It has meant a slowdown in the order process, with the company now taking three days to confirm when it can deliver an order.

“We’re managing to meet the expectations of people but we’re still getting delays in the supply chain so some lead times are going out or coming back in. But again, we’re being open and honest with people.”

Sanders exclaimed: “On some items there’s no delay. On some items by the time we get back to tell them, they’ve already had it. But there are other items, especially some high volume drawers items, where people are being told it’s going to be six weeks before we can supply that.”

As the son of an independent kitchen showroom owner, Sanders said he understands the importance of transparency to small businesses, allowing them to react to the situation.

He says: “They may not like the answer but at least they’ll know when a product is coming or whether they want to make alternative arrangements, if they can get it from a competitor of ours.

“If never gave them any opportunity to resolve the issue that’s not really fair to do that to people.”

Accounts hold

The company also reported it had taken the bold step to not open any new trade accounts to support its existing dealers.

Sanders continued: “We’ve got loyal customers who have dealt with us for 20+ years and we were being bombarded by people who couldn’t get product from their regular supplier who wanted to open an account with Blum, so they could buy product from us. I wasn’t going to be the building society that gives the best rates to new customers.”

He continues: “It’s about working together to get the best result possible, based on the fact that we know we can’t give everybody what they want.”

Pricing transparency

To further support its current retailers, at the beginning of the year Blum UK promised to hold its prices for 2021.

Despite the unforeseen price hikes in raw materials, the company absorbed the cost increase and stuck to its promise.

“We held our promise because that is what people expect of Blum. On January 1, 2022, we’ll put our prices up. But, also in the spirit of transparency, by September 15, our customers will know exactly what that price increase is going to be. So they can cost in the price increase for quotations from September 15 onwards for kitchen they’ll be delivering in the New Year.”

And he adds: “But the one thing I can’t predict anymore is will there be any more price increases in 2022? Will steel continue to rise? If it does, we will deal with it in the way people would expect Blum UK to deal with it. That is it won’t be a knee jerk reaction.”

He exclaims: “Our goal, throughout all this, is to try and be as transparent as possible, while accepting the fact there are a lot of things we’re not in control of and we have to try to deal with that.”

Customer reactions

And customer reaction to Blum’s openness and honesty has been appreciative and “heartening”, as Sanders said: “We stand for being in the market in the good times and being in the market in the bad times.

“Commercially, this is the best of times and yet in terms of supply it’s the worst of times.

“We’re not saints, all we’re trying to say is we will be open; we will be transparent. There are problems and there are going to be problems in the future as well.”

He points to supply challenges running into next year: “Do I see it going into 2022? The answer is yes – absolutely! How far? That really depends on whether the demand continues to run at the hot pace that it’s running at the moment.”

David Sanders urged the kbb industry to work together, stating collaboration has never been more needed than now.

He called for kbb retailers to handle customer expectations, in this upturn of business, and said the mindset of end-users has now changed as they are prepared to accept delays, and states the wait isn’t as important as the meeting a suggested deadline.”

Sanders concludes: “The supply chain problem is all of our problems. We all have to understand, in a situation like this, everybody has a part to play in minimising the effects on what goes on in the supply chain.”