Changes in the refrigeration supply chain have made planning ahead essential. No longer simply a wise business strategy, planning ahead is becoming the only way those ordering and installing refrigeration equipment will be able to adhere to any semblance of a timeline. According to Primo Banuelos, CEO of Prime Refrigeration Systems Inc. in Riverside, California, equipment lead times have nearly tripled over the past year.
"We have gone from getting refrigeration equipment and walk-ins to businesses in eight weeks, to delivering in approximately 24 weeks right now."
It is here that the industry often cites the pandemic as its primary reason for the slowdowns. COVID-19 may be the instigator, but there are several factors contributing to the increased lead times and equipment shortages.
Banuelos explained that a chip shortage has caused a back up in the delivery of the central processing units that are installed the company’s systems. He also said that worker shortages are contributing to the lack of equipment, especially in factories that supply refrigerated cases and cold panels.
Rob Sorba, chief commercial officer of KPS Global®, Fort Worth, Texas, acknowledged that COVID-19 highlighted the weaknesses in the supply chain, especially in regard to microchips. He further explained that the supply chain event that impacted the walk-in industry so significantly was Winter Storm Uri.
“Manufacturers who produce components of a walk-in insulated panel were directly impacted with equipment freezing and entire plant shutdowns for days and weeks following the storm in February 2021,” he said. “The blowing agent that is used for injecting the polyurethane foam was devastated with the storm. Other refineries along the gulf coast that manufacture components in polyurethane foam were also impacted by the winter storm. The most recent effect was a shortage of fire retardant chemicals related to chlorine shortages. Manufacturers of bromine experienced unplanned shutdowns and an inability to secure materials from their suppliers.”
According to Sorba, these events have significantly effected end users of polyurethane foam and their ability to serve customers and meet demands in a timely manner. The inability to access polyurethane panels has some customers seeking alternative technologies.
“Some are even considering third party build solutions,” he said. “Customers are desperate for conditions to normalize. Until then, KPS Global does manufacture thermal liner panels that can help a food retailer bridge the gap by lining existing walk-ins with a kind of thermal wallpaper, until the foam supply increases. Batten strips serve a very similar function. We are anticipating these supply chain disruptions will continue through Q1 because of the instability in third tier suppliers.”
Having examined a few of the many supply chain factors, the question remains, “Will the refrigeration supply chain see normal again?”
Banuelos explained that a return to normal will take some time. He pointed out that normal may no longer exist for the refrigeration industry nor the overall economy. In the middle of August 2021, HARDI released a new tool, the Supply Chain Normalcy Index. The index is designed to help members take a different approach to the definition of supply chain normalcy and help them manage expectations as they consider more of the complexities of current supply chain status. According to HARDI's website, "The Normalcy Index is a catalog of standardized, high-frequency variables that, when viewed holistically, offer a macro snapshot of the status of supply chains.”
AJ Milbes | Sept. 1, 2021, 12:34 p.m.