Supply chain issues continue to plague the HVAC marketplace in 2022, causing longer waits for customers. Diesel fuel costs and shortages are the latest factors contributing to delays, alongside continuing manufacturer setbacks and transportation challenges.
A decrease in demand for diesel during the height of the pandemic led to production cuts that are still contributing to the current shortage. In June 2022, diesel cost an average of 5.75 U.S. dollars per gallon, an increase of USD 2.50 per gallon compared to the year before.
Supply chain issues
The supply chain situation changes from day to day. HVAC installers are playing a guessing game about what stock might be available and what will not. The situation persists despite the efforts of warehouses to ensure they had sufficient equipment this year. One installer estimates that two out of 10 clients are waiting on parts.
Supply chain issues have helped to push the price of HVAC components higher in the broader inflationary climate. When demand outpaces supply, prices are bound to go up. Some HVAC companies report prices increasing 80% compared to last year.
Copper
Because copper is a key component in the shift to renewable energy, demand will continue to rise
Copper materials are in short supply. Global copper mine production has been stagnant in recent years, with a growth of just 0.3% in 2020. That was forecast to accelerate to 2.1% in 2021 and to 3.9% in 2022 after several new mine projects come online.
However, because copper is a key component in the shift to renewable energy, demand will continue to rise, which means continuing shortages. Copper is essential to HVAC products.
Shortages
Other shortages include steel, aluminum, and plastic. The scarcity of semiconductor chips, which is impacting everything from automobiles to smartphones, is also making its mark on the HVAC marketplace.
Another element in the supply chain disarray is labor shortages, some resulting from the pandemic, which has hampered productivity at equipment factories.
Supply chain management challenges
HVAC companies that have historically used a single distributor should be open to new possibilities
Managing the challenges of the supply chain disruption adds a new element to the headaches facing HVAC companies. Shopping various distributors can yield the best available pricing.
HVAC companies that have historically used a single distributor should be open to new possibilities. The same for equipment trying new brands can expand the choices and enable companies to thrive until the bottlenecks clear.
HVAC inventory
Managing the inventory of an HVAC business is another tool. Historically, the approach has been to minimize inventory and order equipment only when needed for a specific job.
Amid the supply chain disorder, rather than buying “just-in-time,” companies that have facilities to store equipment might want to stock up and be prepared for any shortages.
Minimize shortage impact
Communicate with suppliers to understand what they are facing and build relationships and work together
It is also useful for an HVAC installer to understand exactly what the supply chain situation is for various companies.
Communicate with suppliers to understand what they are facing and build relationships and work together to minimize the impact of shortages. Sometimes a project needs to be redesigned to use products that are more rapidly available. Timely communication and execution are needed.
Customer service
Demand for HVAC systems has increased along with the trend toward working from home. Additionally, wider temperature extremes in the summer and winter are making HVAC even more necessary and in demand.
Managing customer expectations is huge, and extra attention to customer service can help to address frustration among customers.
