With all that’s been written about the broken supply chain, shutdowns across various parts of Asia, raw material and labor shortages, it sometimes feels like this question could arise almost any week. But a recent series of events, including protracted shutdowns and travel limitations in Vietnam and Malaysia, coupled with unrelenting freight issues make a question that sounds like hyperbole an actual serious question.
At the recent High Point Premarket, more than one manufacturer suggested that by the end of October a situation could arise where there simply was not going to be product in the pipeline. Before anyone panics and I set off a toilet-paper-like run on any and all furniture, let me be clear.
No, not every supplier in every situation is going to run out of product when October ends. And not every retailer is suddenly going to shut their doors one night because there simply is nothing left to sell on the floor.
However, the idea that the recent Asian shutdowns could create an additional gap in the flow of goods and result in a period where there is little-to-nothing available to ship for a brief period is not out of the realm of possibility.
Even with good news about things beginning to open up in Vietnam and Malaysia, there are a number of factors that will result in resumption being inconsistent — not just across individual regions, but even across individual suppliers. Malaysia’s reopening policy is tied closely to infection and vaccination rates, and there remain significant localized differences in policies, enforcement and recovery both there and in Vietnam.
And let’s not forget, production is made up of myriad jobs and materials, not all of which may arrive at the same time. Even once the people are in place, there are still raw materials that need to be worked back into a normal flow, and getting goods to port and onto a container will be no easier or cheaper once workers are back on-site.
While the focus right now may be on Vietnam and Malaysia, the capacity challenge is global. Even domestic suppliers that have been able to largely avoid freight issues or recent shutdowns are reporting substantially longer lead times and issues getting key components.
The impact of all this is likely to come in the fourth quarter and the first quarter of 2022, which could prove challenging for any retailer planning Q4 or New Year’s promotions that does not already have the inventory on hand, and few have the ability to warehouse that depth of goods.
As a result, next month’s High Point Market, much like the past two, is likely to be less about new product than about available product. And the challenge of getting a steady, predictable and reliable flow of goods is likely to continue well into next year. If that sounds familiar, it’s because that’s the same thing people were saying at this time last year.
Hopefully those projections will prove more accurate this time around.
Blog: Is the furniture industry about to run out of product?
