Supply Chain Reaction – How Airedale continue to adapt to component supply volatility in order to stabilise chiller lead times
By now everyone in the HVAC industry is no doubt aware of the impact that a shortage of semiconductors has had on manufacturers, particularly in terms of availability of fans and controllers. Just over a year on from when the shortage first hit, we explain how Airedale have responded to the shortage in order to bolster our manufacturing capabilities and stabilise chiller lead times.
When chip shortages first impacted production lines in 2021, the semiconductor industry found itself under the spotlight. A perfect storm of problems led to the semiconductor shortage. On top of long term issues within the industry, such as insufficient capacity at semiconductor factories, the COVID-19 pandemic created market volatility that chip manufacturers have found it difficult to respond to. As well as a sharp drop followed by a steep increase in demand, the landscape of that demand has also changed, with home working, for example, altering market dynamics.
Semiconductor companies have increased throughput but companies like ours are in competition for supply with other buoyant industries, like automotive manufacturers and electronics companies. Airedale have had to work hard, work smart and think differently in order to continue to be able to offer our critical cooling solutions at acceptable lead times, in demanding sectors like data centres, healthcare and telecoms.
From a commercial point of view It’s all been about improved communication, both internally and externally. We have tried to put long term forecasts in place for future sales and have spoken with our supply chain to pre-order long lead time parts where practical. We’ve also increased the frequency of meetings between sales, production and procurement to provide clear communication channels. Sales have also offered various options to our customers, such as part shipments and alternative components/parts. We’ve also, in critical cases, looked to provide equipment without some components under concession, to allow installation to take place. We’ve then offered to fit the balance of parts at the commissioning stage to remove as much pain as possible and allow projects to progress.
Our advice for clients is to contact us as early as possible in order to assist us in pre-ordering components. We do understand that short term enquiries are sometimes unavoidable and have tried to re-build safety stocks of critical / high turnover items in order to reduce chiller lead times.
From an engineering perspective, the number one priority for our teams over the past 6 months has been dealing with challenges caused by shortages and the impact that has had upon our supply chain…where fundamental components in our products –fans and controllers in particular –have been affected.
We have dedicated over ¼ of our resource to the sourcing of alternative components in order to keep orders flowing through our factories and we are permanently re-engineering products to be able to offer multiple component options. We are taking the opportunity to significantly rationalise the number of unique fan types that we use in our products and gain benefits from the economies of scale that come from buying more of the same part from our suppliers.
There is much more supply chain engineering work to be undertaken, especially with controllers, the ‘brain’ of our products. By rationalising our product portfolio where possible, to focus on popular products/options, and obsoleting those that are rarely ordered, we will go some way to easing this task. Tackling the supply chain crisis head-on will make Airedale more resilient and we will emerge much stronger as a result.
The key message we have for clients is; speak to us. Chiller lead times are stabilising and there are things we can put in place if you engage with us early. The earlier in a project you involve us, the more likely we are to be able to come up with a solution. Lastly, we deeply appreciate all our clients for their patience and continued business as we continue to work through these unprecedented challenges. Thank you!