Communication breakdowns, shipping imbroglios, component scarcity, plant closures, lack of computer chips and product shortages are all continuing to hinder the marine industry’s supply chain.
For our fourth installment that examines the long-ranging effects of supply-chain slowdowns on retail sales, Soundings Trade Only interviewed manufacturers — boatbuilders and OEMs — and talked with product producers about how they’re handling supply-chain slowdowns.
Tom Slikkers, CEO and president of Tiara Yachts, says the challenge is all-encompassing because every aspect of business has been halted at one time or another during the past 18 or so months.
“I think the hard part is it’s extremely unpredictable because none of us have the ability to transparently look three, four, five, six layers deep into the supply chain,” Slikkers says. “If you’re buying from a supplier, no doubt that supplier has suppliers and so on down the road, and it becomes kind of a crescendo when you finally take delivery of that product or widget. It’s a process of other smaller companies finally getting you this product that you can incorporate into your boat.”
Slikkers says many retailers just aren’t aware of all the complications and variables that factor into how things get made. Figuring out exactly what supply-chain wrinkle will hit consumers next is a difficult task. “It’s like that game you used to play at the fair, Whac-A-Mole,” he says. “That’s what supply chain has been for the boat companies and their purchasing departments.”
Paul Petani, vice president of global sales for marine safety and security product manufacturer Fell Marine, says his company has had to “get very granular” in looking at component lead times across its suppliers. “What we do is try and isolate where we see a potential problem and tackle those first, locking in the supply that has long-lead-time items,” he says.
Petani also says Fell Marine designs its products so they are simpler and thus more readily available, rather than too custom. And the company maintains good relationships with key electronics distributors. “Arrow is a company we work with,” he says of the New York-based supplier. “They’re probably the largest component distributor in the world for electronics. We work very closely with them to help us get over those situations where there’s a short product supply.”
Robert Oswell, chairman and CEO of Roswell Marine, says his team is looking farther ahead when planning what to stock. “We’ve had to bump up our inventory levels from more just-in-time to where we’re going to have to allocate inventory and resources at higher levels,” he says.
Eric Fetchko, president of Dometic Marine, says he expects the supply-chain crunch to last at least another 18 months — into spring 2023. “It’s a firefight,” he says. “We have people who are chasing suppliers. We have others who are redesigning electronic circuits for new microchips.”
David Dunn, senior director of marine and RV sales and marketing with Garmin, says his company is “forecasting past 2023 [and] planning ahead so we can capture opportunities.”
Slikkers says the situation has vexxed Tiara’s employees. “They wake up every day and they feel like, OK, I got one issue solved for yesterday. Then they come in and they’ll get a call or they’ll get an email that will completely unhinge all of the planning efforts because it’s a commodity or something you didn’t plan on yesterday.
“It’s going that quick,” Slikkers adds, speaking specifically about components. “Usually, you’re getting notifications, and you’re not having a lot of time to figure out what an alternate solution’s going to be. And that’s tough. A lot of vendors are not in a position where they’re taking on new business. So if you are unfortunate enough to be told, ‘Well, we won’t be able to supply that to you anymore,’ it’s not like we’re in an industry like the auto industry where there’s multiple different choices of suppliers that you can source.”
At Fell Marine, which collaborated on its 1st Mate safety and security system with Mercury Marine, the situation was compounded due to a spike in product demand following a federal law passed in April requiring boat operators on boats 26-feet or smaller, when traveling on plane or above displacement speed, to employ engine-cutoff devices.
“We’ve caught up since then. We’ve already got production set up, and we’ll be ready for 2023,” Petani says. “You can’t rely too much on a sole source for any component. You might have a strategy of sourcing from Asia but also have a source in North America, so if you have a shipping problem or there’s some other issue happening, you have an alternate supply.”
This article was originally published in the November 2021 issue.
