Our Industry Needs to Put Suppliers Under The Microscope
As our industry sees yet more big-name closures, installers need to take positive measures to protect themselves. This is the alert sounded by Mark Warren of Lister Trade Frames, a company which seems to be riding the storm with little sign of discomfort. “There’s no doubt the market’s going through a difficult time,” says Mark, but that doesn’t mean that installers and end-users need to suffer because of mistakes higher up the supply chain. “
Mark believes that many of the industry’s problems are self-inflicted. Faced with more difficult times, many fabricators relaxed their credit criteria, causing a huge rise in bad debt. This happened just as prices and profitability came under maximum pressure. As money became tight, several manufacturers began cutting back, further reducing their ability to survive.
“The problem facing the installer now is that his supplies could suddenly dry up. If a fabricator goes bust, everything freezes very quickly. At the same time, liquidators may demand immediate settlement of accounts, soaking up the cash that the installer needs to source materials elsewhere. When a manufacturer goes bang, it’s far too easy for his customers to get caught in the blast.”
Listers has recently reported figures 10% up on last year, making this their third consecutive year of growth. Why have they been unaffected by the slow-down?
“We haven’t been unaffected,” replies Mark, “Given a different climate we might be 25% up, but who knows? The important consideration is that we’ve kept our heads, stuck to what we’re good at and continued to invest in our production and customer service.
“And that’s what I’m suggesting the industry needs to do. Installers should be looking closely at their suppliers and planning how they’d cope if deliveries suddenly stopped. You should be asking your suppliers some searching questions, and if they can’t reassure you fully, consider a back-up plan. There’s a tidal wave on the horizon, so now’s a good time to get hold of a surfboard!”