JT improves lead times despite equipment shortages
May 13, 2021
British shower trays company JT is manufacturing again at a steady pace after demand increased 30% between July and October, 30% higher than in 2019. Despite this growing demand, the lack of raw material supply has led to an increase in demand between July and October. price increase.
Sales and Marketing Director John Schofield spoke on the kbbreview podcast about the multitude of issues that have made prices so volatile. JT prices rose 15% between March and April due to the cost of raw materials and high demand.
JT annually reviews its pricing structure based on what is happening in the market and the cost increase has been carefully considered.
One of the causes was a supply and demand problem, as Schofield explains: “We have a global reduction in global manufacturing but an increase in global demand. It only means one thing: product shortages and price increases.
“We saw significant price increases in the fourth quarter of last year and around the turn of this year. Between December and April, the cost of our resin increased by almost 35%. In the worst case, we only got two weeks of resin, and we weren’t sure if we were going to come out for more than two weeks – and that would have shut the plant down.
Schofield said JT is trying to balance the extra costs with efficiency gains and is able to absorb some of them, but prices will continue to rise. He said: “The prices are volatile and we are now placing orders for later, but we have no idea what we are going to pay for it.”
The availability of imported raw materials has been a problem for JT. Styrene – a main component in a number of shower tray materials – has been difficult to obtain. Part of this is that it is only made by a small number of factories and several of them have had various issues such as a fire in a factory and weather related issues in a factory. in the USA.
Schofield also referred to the “ mass confusion ” with the management of supply from manufacturers to their customers and freight companies at the start of Brexit. Then there were more complications related to the payment of VAT or local taxes and an increase in the costs of raw materials. Despite these short-term complications, Schofield doesn’t think it will have a long-term effect.
During the podcast, Schofield also spoke about the past 12 months and how the company has coped after the first lockdown and the initial surge in customer demand. He said: “Business right now is a lot more palatable compared to the last six or eight months, which was really a roller coaster. The boom in business that returned from June to the end of October of last year was unlike anything I had ever seen. To put that in context, if you take our average daily orders entering the business, between June and October we were about 30% higher than the year before. And it was every day.
“From a capacity perspective, it took a bit of time to get back up to speed. This in turn created a backlog, which lengthened the delays. Some of our competitors in the market did not come back and if they did come back they were not producing at the same level as before the pandemic. This left a void and caused our demand to be artificially inflated.
“Business is stable now and production is 24 hours for five days, with a few shorter shifts on the weekend. It has stabilized and the timelines are improving a lot more than they were. The market as a whole appears to be well positioned and stable. “