The COVID-19 pandemic revealed to the world the fragility of the global supply chain. Prior to 2020, logistics was rife with veiled pre-existing issues that quickly came to light during the tumultuous time. Equipment and much-needed aquatic supplies became difficult to obtain virtually overnight.
Hotels, fitness centers, apartment complexes and other aquatic facilities started to scramble to procure much needed items to remain operational and safe. Fast-forward to 2023 and procurement remains challenging.
Supply chain problems have become a procurement nightmare. Cost volatility, parts and equipment shortages, and long delivery wait times have all impacted the operations of aquatic facilities. In this article, we examine how to mitigate supply chain issues despite the current and ongoing logistics turmoil.
Major supplies regularly used by aquatic facilities on a daily basis and in the construction of new pools being impacted by the supply chain problems include:
- Concrete (used in coping around the pool and pool/spa construction)
- PVC (a common material used in aquatic supplies and equipment)
- HVAC supplies
- Maintenance equipment
Material shortages are costing aquatic facilities money as timetables for projects are stretched out due to lack of supplies. Contractors have started to pass on higher prices for projects.
Many trades that work on aquatic facility equipment such as HVAC and electricians are also grappling to cope with the supply chain problems and lack of supplies. If your pool’s heating system breaks down, the HVAC service technician may not have access to the parts needed to make the repairs so you’ll face a long wait and possible downtime.
Material Shortage Types
Reasons for material shortages vary throughout the supply chain. Common materials that are in short supply include:
Glass fiber is a component in many aquatic facilities. The material experienced a downturn in production when the lockdowns first occurred in 2020 and has still not returned to pre-pandemic status. Despite the slowdown, raw glass fiber deliveries have risen higher than usual.
With demand high and a reduction in production supply by fiberglass manufacturers, the costs have skyrocketed to the highest in over a decade. Some manufacturers have tried to absorb the increased costs, but others have passed the expense on to the buyers.
The resin industry is experiencing record demands which show no signs of abating any time soon. The price hike has been substantial with the price rising to $1 per pound for the first time. The driving forces behind high risen prices are due to shortages that have occurred due to the pandemic and extreme winters. Plant shutdowns have compounded the problems.
Resins play a key role in many processes such as the manufacture of PVC piping used in a pool’s filter system and more. Resin is also fashioned into a gel coat that is often used to coat pool shells and for various repairs.
PVC producers continue to struggle to restock replenished inventories and fulfill backorders. The problems are predicted to persist through 2024. Labor shortages and supply chain problems continue to hinder product manufacturing and delivery.
The costs of PVC continue to increase to never-before-seen levels. In 2021, the price of PVC had increased by 70% but the prices have continued to grow and have now increased to 400% to 500%. The price increases have been fueled by the high cost of resin used in the manufacture of PVC. In a large part, resin has fueled the cost.
The entire industry has been impacted. Molds and molding companies and aquatic facilities have faced severe shortages. Many aquatic facility owners have turned to substrates like fiberglass (RTRC) which are less costly and easy to install. It has not been impacted by the shortages the way PVC has.
Many things have had an effect on the supply of PVC besides COVID-19. Winter storms hit Texas causing the production to grind to a halt because the state is the leader in the U.S. petrochemical industry which is used in the manufacture of PVC. Louisiana also suffered as petrochemical plants and offshore oil rigs were crippled from Hurricane Laura. Hurricanes and winter storms fueled by climate change have further depressed the industry.
Suppliers could turn to overseas supplies but container ship holdups and problems have made that virtually impossible. The pandemic shutdowns, severe weather, labor shortages, and logistics nightmares have all impacted the market making it hard for aquatic facilities to obtain much-needed supplies to remain safely operative.
Chlorine Shortage of 2022 and Beyond
Two major chemical fires led to a crippling shortage of chlorine. Initially the COVID-19 pandemic crippled the world’s supply chain and manufacturing with shortages of electronics, appliances, lumber and more. However, soon the world started struggling with a shortage of chlorine.
In 2020, the demand for chlorine seemed to skyrocket as home pool owners turned to their backyards to enjoy water sports. During the iconic year, 96,000 pools were built which was an increase of 23% from the previous year. With so many more pools, chlorine demand became a very real thing which actually started to impact hotels, fitness centers, apartment complexes and other facilities with swimming pools by making it difficult to obtain the chemicals and maintain pool safety.
In August 2020, Louisiana experienced a direct hit from Hurricane Laura and then less than a month later the BioLab plant located in Westlake caught fire. BioLab provides 40% of the nation’s supply of chlorine. It also makes other products for pools and spas.
The plant explosion caused catastrophic damage and was forced to cease production which left only two other chlorine producers in the United States: Clearon Corp and Occidental Petroleum. The chemical manufacturers have managed to step up production to meet demand but despite their diligence they have been unable to meet the needs.
BioLab reopened at a limited scale in August of 2022 but they will not resume full scale production until sometime in 2023 so aquatic facilities are still facing shortages. Even with manufacturers struggling to make up for the lost output there is still no way to spring ahead any time soon. However, BioLab has announced when it opens its refurbished company it plans to increase production leaves by as much as 30% to meet the unwavering aquatic demands.
Additional Tragedies Impact Commercial Pools
Other tragedies have also hit the aquatic industry’s chlorine needs significantly. Qualco Inc. a chemical company located in New Jersey experienced a chemical fire. Qualco Inc. specializes in products for swimming pools and spas. The plant experienced a great deal of damage and over 100,000 pounds of chlorine was destroyed which further contributed to the chlorine shortage.
Aquatic managers were sent scrambling to find sufficient chlorine to maintain operations and keep their facilities open. However, bad luck in the chlorine industry continued as a fire erupted at Olin Corp. in Louisiana which compounded the problem even further.
Additional problems still persist like labor shortages at all of the plants, shortages of equipment components and materials needed for plant operations are also making production difficult and impossible in some cases.
Understanding Supply Chain Risks
It’s hard to mitigate supply chain risks if you are unfamiliar with what to watch for. Supply chain risk management is the strategic project that you take to assess, identify and mitigate risks. Many things can disrupt the supply chain.
Below we will explore common supply risks that you might encounter and which can throw your aquatic facility into chaos if you cannot procure the needed supplies for safety and operation. There are both external and internal risks which can cause widespread disruptions.
Evaluating External Supply Chain Risks
Global supply chain risks often come from outside of the organization. In such situations, it’s often far harder to identify and predict with any true certainty. When such an upheaval occurs it's often more difficult to overcome.
External supply chain risks include:
Miscalculating product demands and not taking into consideration year-over-year trends in purchasing which fuels an unpredictable demand.
When the materials your aquatic facility relies on are not delivered in a timely manner or fail to be delivered at all then a disruption in the flow occurs and can quickly prove devastating.
Unexpected changes can put a business at risk. If you depend on a supplier, then any changes like the purchase or sale of the company can impact how the supply chain operates causing a slowdown.
Political upheaval, wars, governmental discord and environmental issues all impact supply chain timing. Any world event can cause serious problems with procuring the supplies and equipment needed for your commercial swimming pool.
Potential Internal Supply Chain Risks
Most supply chain risks are out of your control. You can identify them and stay up to date using risk assessment software with robust analytics but they still remain unavoidable and there isn’t really much you can do about managing them.
Your facility’s workflow can easily become disrupted due to internal manufacturing risks at the supply chain which are out of your control. Your operational schedule can be severely impacted if you are unable to get the parts, equipment or chemicals you need to keep your facility’s swimming pool and spa operational.
Planning and Control Risks
Inaccurate forecasting and production planning problems all create roadblocks in the supply chain which can significantly impact your ability to obtain the supplies you need.
Disruptions lead to business risks. They can occur from management, essential processes, personnel and reporting problems and risks can occur.
Contingency and Mitigation Risks
Supply chains that fail to have mitigation and contingency safeguards in place face major disruptions.
You should develop a complete picture of potential supply chain risk factors to avoid disruptions. Make a list of possible issues that could arise and impact your procurement endeavors. With the information you gain you can mitigate supply chain risks.
There are many technologies that offer visibility of the movement of products throughout the supply chain so you can identify potential risk factors. With such visibility you can identify potential risk factors to devise solutions using both predictive and prescriptive analytics. You can not only pull data but also achieve status updates about suppliers and third party vendors along with external data sources. You’ll gain a real time supply chain overview so you can mitigate risks.
Mitigating Supply Chain Risk
Procurement has become a challenging task for aquatic facilities. Many are facing several financial problems due to supply disruptions, noncompliance fines, incidents and cost volatility. Many are worried about the long-term impact. Below we will examine the risk that could cost an aquatic facility money in sales and operations without adequate risk management that includes focused purchasing and supply practices.
To be successful with supply chain mitigation you’ll need to know the risks to develop the right strategies to address them successfully.
Financial risks are often unanticipated. They can quickly cause you to overreach your budget and miss key business milestones. You might find that you need to seek additional financing for your aquatic facility to keep it operational. Unexpected costs can quickly get out of control and lead to other risks. Changes in the scope of operations will change as you encounter financial hazards which seem to be a side effect of the ongoing supply chain problems.
If you have to skimp on equipment or chemicals, then you face putting your patrons at risk and you could incur fines and experience closures which impact your bottom line. If someone should become injured or drowns at your facility then the legal problems can quickly become overwhelming with civil lawsuits and more.
You should estimate the dangers of your supplier when it comes to the environment during sourcing. Are they having a negative impact on the environment, water, air, or land holdings due to emissions, toxic waste, and harmful discharges? If so then their practices can quickly roll into your own to impact your reputation. Many patrons do not wish to live in an apartment complex or frequent a fitness center or hotel that shirks their responsibility towards sustainability.
Human behavior is difficult to assess. Erratic problems can lead to jeopardized results. They can quickly make poor decisions and judgment calls. If someone drops the ball, then it can quickly impact your business.
Best Practices to Mitigate Risks
Examining the best practices to mitigate supply chain risk.
Identify and Evaluate Current Risks
Identify the current risks and then assess them. You’ll want to discover areas in your aquatic facility where you feel at risk or exposed so you can foresee the likelihood that you’ll feel supply chain disruption impacts such as with pool chemicals, equipment parts, PVC, and pool construction material.
Prioritize Potential Risks
Make a checklist of potential risks and then prioritize them based on how likely they are to occur. Start with worst case scenarios first. For each potential event you should calculate the finance risk to your aquatic facility and how badly your brand’s reputation might be affected. Build a contingency plan that focuses on risk mitigation for your commercial swimming pool so you can stay operational and continue expanding your bottom line. Try to determine which risks are likely to occur and which ones will have the greatest impact.
Focus on Honesty
Running an aquatic facility at a hotel, fitness center or apartment complex means that you need to be open with your team and business partners. Share data, develop sales predictions and involve your team in any procurement needs. You want to work with vendors who have the ability to provide you with the aquatic supplies you need at affordable prices. If supply chain problems are making it difficult to procure necessities then you’ll want to inform your partners. Remember, always build a relationship with your vendors to ensure assistance when you need it the most during the procurement process.
Today's procurement is difficult. You sometimes have to stay one step ahead of the competition who are also seeking the same products for their facilities. You’ll need to equip yourself with the knowledge needed to handle potential risks so you can come out ahead when obtaining much-needed supplies for your operations.
Understanding Industry Limitations
Lead times for aquatic supplies and equipment have increased dramatically. It is imperative that you have your team closely inspect your family’s existing equipment so you can start planning ahead. Making orders for equipment and chemicals is a necessity to circumvent the supply chain problems and ensure you have what you need. No one has a crystal , but you can make an educated guess about what you’ll need to keep your swimming pool facility’s doors open to your guests. Order necessary or replacement parts in advance so you have what you might need coming and on hand in case it should break down in the near-future.
Strategies to Reduce Risks
Aquatic facilities will face disastrous consequences if you do not reduce the risks quickly. Health and safety hazards can rapidly occur if your equipment is not functioning properly, and your water’s chemical levels are not maintained. Risks impact your facility’s financial health, brand reputation and the welfare of your patrons and staff.
Risks impact your facility’s health and damage your professional standing. The welfare of swimmers is also in danger. You must maintain your facilities equipment to ensure patron satisfaction.
To protect your facilities revenue, you’ll need to manage your supply chain risk with strategic planning to better identify risks and mitigation.
If you want to operate your commercial swimming pool at its highest potential, protect your organization’s reputation and increase your profitability then supply chain risk management is a necessity
Diversify Vendors and Suppliers
There is an old saying, ‘don’t put all of your eggs in one basket’. This advice is excellent when it comes to the current situation with the supply chain. Having a single vendor that you depend on for your pool supplies and equipment is not a good idea. If your sole supplier encounters problems in the supply chain then you will face huge delays that are not only costly but dangerous to your patrons because water safety is a crucial balancing act that depends on proper chemicals. Also, equipment failures put guests at risk.
Diversifying your vendors helps you reduce the likelihood of localized issues. You’ll increase your supply chain resilience.
When you work with several suppliers you’ll also have the ability to select and diverse supplies at the best prices. If one vendor fails to have the items you need then having backup suppliers will help you quickly locate what you seek without costly delays.
Always Have a Backup
A successful risk mitigation strategy involves identifying risks and then taking steps to reduce the impact. You need to take an initiative-taking approach by planning for possible scenarios so you can ensure your aquatic facility’s continuity of operations. You can effectively protect your swimming pool from internal and external risks.
Suppliers might be able to complete your order for a number of reasons such as issues with the supply chain. It’s not uncommon for some suppliers to actually go bankrupt and close up. It’s your responsibility to avoid issues with your suppliers so you can prevent major disruption and ensure the safe operation of your commercial swimming pool.
Select suppliers you can trust and enter an agreement with them. Some supplies will then reserve product production capacity for your facility if there is a disruption. However, not all vendors offer this service.
Always have a backup plan and additional vendors that you can turn to meet your aquatic facility needs in a pinch. Join VivoAquatics procurement and strategic sourcing specialists to gain cost-effective solutions.
With risk assessments you can plan for the worst. Outline control measures so you can limit risk. Consider your responses to foreseeable events that could negatively impact your facility if the supply chain fails to operate properly.
Always work in flexibility so that your facility can adapt if necessary, during a supply chain disruption. Yes, you can plan and prepare for many possible scenarios. Your risk management strategy needs to prioritize probability and impact. You’ll want to implement control measures coupled with contingency plans for all situations.
Every successful company is flexible to enable easy adaptation when needed such as when supply chain disruptions occur. With your risk management strategy you need to prioritize the problems and impact and determine when to implement control measures coupled with contingency plans to handle situations that would impact your aquatic facility.
The supply chain is made up of many stages throughout operations. Every stage is rife with challenges and risks. If something does not go right during one of the stages, then you might not receive your supplies or equipment.
You should also investigate the financial stability of your suppliers. During the procurement process you should acquire financial reports so you can choose only financially stable suppliers because financial issues can always impact production processes. You might end up being left without your supplies or equipment if the supplier suddenly goes out of business or files bankruptcy.
Supply chain visibility refers to knowing exactly where the inventory is as it travels throughout the supply chain. If any issues arise then you can plan ahead because the delivery timeline might end up impacted. Many supply chains provide complete visibility to your suppliers. You’ll be able to track all progress of your orders so you know when to expect them.
Develop a Risk-Aware Culture
You can’t go through life blind, and you certainly don’t want to sacrifice your foresight when operating a commercial aquatic facility. Supply chain risk management is always easier and more successful when it's a collaborative process. Creating a risk-aware culture will help you ensure that everyone is on the same page between you, your team, and business partners. Maintaining risk management standards also helps reduce the risk of a supply chain disruption.
Everyone should be supportive of your risk mitigation strategies. Strive to implement better management systems so your supply chain risk management is a priority. Ensuring your team and partners are on the same page with risk identification and mitigation will help you resolve issues better and tackle future problems.
Part of effective risk mitigation is gaining the insight of suppliers, your team, and partners so you can create effective solutions. Ideally your suppliers risk management and business continuity strategies should complement yours. Having partners throughout the supply chain can help you better evaluate risks and manage.
Keep your supply chain risk management strategies current and relevant to your facility and the current situation. You’ll need to regularly carry out risk assessments to keep everything current and ensure that your planned control measures and responses remain relevant.
Try to review your supply chain risks annually or if changes occur in the supply chain. In the last several years the upheaval of the supply chain has made it necessary to evaluate things more often because things are continually changing with the delivery processes and more. You’ll want to know your hazards.
Consider Investing in Insurance
Many business owners don’t know that there are insurance policies that do offer some support in the event of a disruption or monetary loss. Professional indemnity insurance, cyber liability insurance and contractors liability coverage are all forms of insurance you might want to consider investing in to provide your aquatic facility with an added layer of protection when it comes to risk management.
Evaluating Supplier KPIs
Has your pool supplier's performance become a disappointment? Yes, the supply chain is probably the underlying cause but supplier management is a crucial aspect of keeping your aquatic facility running smoothly. Supplier performance management is imperative. Did you make 36 orders in the last month, but your supplier delivered only 31 orders by the due date? If so, then the supplier has an 86% success rate. Is this acceptable for your aquatic facility or is it time to seek skilled procurement services?
Tracking the performance of supplier management KPIs is a crucial mitigation measure. Supplier performance is an important aspect of keeping your swimming pool safe for patrons.
The last three years have been a rollercoaster ride due to ongoing supply chain problems. At first you might have overlooked poor supplier performance but over time it starts to become worse and more apparent.
Initially the consequences could seem small, but they build up over time. If you cannot obtain much needed parts, chemicals and equipment to keep your aquatic facility operating properly then your patron’s safety is in danger. Unsafe conditions can lead to compliance problems, fines, and irreparable brand damage.
The causes of subpar pool supplier performance are often varied. They might only be a single occurrence or something that continues each month. Since 2020, the main causes of supplier disruptions and the inability to fulfill orders has been due to supply chain problems.
With supply chain disruptions, often poor supplier performance is unavoidable. The supplier should take steps with the supply chain to try to minimize delivery failures.
Overcome Supply Chain Issues with VivoAquatics
If you want to mitigate supply chain risks then consider joining forces with VivoAquatics procurement and strategic sourcing specialists to gain cost effective solutions. Our team will help you find cost savings across all of your properties in your various wheelhouses such as maintenance, back of office operations and engineering.
Tap into a national market when purchasing aquatic supplies. Work with a variety of service providers to ensure you obtain what you need to stay operational, keep your guests safe, and maintain your commercial swimming pool.
VivoAquatics helps give you a leg up when it comes to enforcing standards. With our tools you can better maintain your facility’s health needs and better negotiate costs.
With a strong focus on being eco-friendly, many hotels, fitness centers, and apartment complexes want to find innovative sustainability solutions while managing costs. Our team will help you meet your goals at energy efficiency and carbon footprint reduction.
The last three years have been a struggle to navigate the supply chain and obtain the supplies you need for full, safe operations. Mitigate supply chain risks by working with VivoAquatics so you can shop for all of your pool and spa equipment through our national fulfillment centers or at over 200+ local distribution points.