Managing the Materials Shortages and Price Rises

While material shortages and price increases continue, Adrian Buttress, managing director at PermaGroup, discusses his approach to the crisis and some key areas to keep a close eye on.

Adrian Buttress headshot
Adrian Buttress, Managing Director, PermaGroup

TOWARDS the end of last year, I predicted that 2021 would be a turbulent one. We got off to an incredibly strong start this year, with four consecutive record-breaking months – a first in PermaGroup’s trading history.

However, as the year progresses and construction activity continues to gain momentum, there is no escaping the material shortages and price increases that are affecting the sector. As such, the time has now come for us to be proactive and ensure minimum disruption for our customers.

Reward Customer Loyalty

Every business has its regular customers, and it’s in scenarios like this where the value of loyalty really comes into its own and reaps its rewards.

We’ve started allocating stock to our ‘regulars’ to ensure we can keep supplying them as best we can. We are doing all we can to preserve future stock for them and, crucially, are holding off on price increases for as long as possible.

Although this can mean some difficult decisions when it comes to other customers, for example those who we haven’t dealt with in a few years, I firmly believe it will pay dividends down the line to have held valuable customers close and cared for them throughout the crisis.

Think Ahead

Purchasing bulk amounts of stock help to secure current rates and delay the inevitable increase in prices. Maintaining a detailed stock plan and key performance indicators (KPIs), can make all the difference when it comes to identifying warnings signs with regards to stock levels and judging how much will be needed. Also, keeping a detailed eye on information that comes through from manufacturers will help planning.

Maintain Relationships

A good trading relationship with key suppliers has never been more important in order to work closely with suppliers to forecast likely stock requirements. By combining this with our capacity to house higher than usual stock levels, we’re in the fortunate position of being able to continue trading almost uninterrupted so far despite the challenges facing the industry.

Look Forward

The construction industry is one of the largest in the UK economy, employing around 3.1 million people across the country and making up around 9% of our workforce, meaning the impact of these shortages and increases is being felt by many. However, ours is a resilient sector that has navigated tricky waters in the past and will continue to do so.

There’s no doubt that it is going to be a tough few months and I estimate that we’ll be into the final quarter of the year before things start to improve. We are already learning that a number of projects are being delayed until 2022. The upside is that, while 2021 might be a challenge, we already have a healthy start to look forward to in the new year.

>> Read more on the materials shortage in the news

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