It’s no secret that the fenestration industry is still wrestling with major supply chain issues. We have huge demand from homeowners, compounded by Brexit, the many impacts of Covid-19, global raw material demands, supplier production challenges and severe price inflation. How we manage these issues is crucial.
This has always been a sector where we don’t have long lead times, or great visibility of the pipeline. But, as the economy continues to recover, we have been looking at levels of demand that are 26% higher than anticipated, and we’re breaking records just to keep up with orders. July is our biggest month on record. And our assumption is that the months ahead can still get bigger.
This unprecedented demand has caused difficulties worldwide, and, in June, our parent company, Veka AG. announced force majeure due to pandemic-related supply issues. It was a straight and honest decision, designed to protect both its customers and suppliers. To be clear, they are delivering more product to their customers than any time in their history,
We have been kept informed of the situation every step of the way, but it is important to stress that the decision does not affect Veka in the UK, despite rumours, sadly spouted by some competitors, to the contrary. A key reason that Veka UK is successfully mitigating supply issues is due to the £5m investment made back 2014, when we built our own mixing plant in Burnley. It gave us autonomy and allowed us to source our own raw materials. We mix in the UK, extrude in the UK, and sell in the UK. And, when we need the global backing of our parent, it is there.
The other differentiator for Veka is that, while we have all been challenged sourcing raw materials to support volumes, we have our sister to support us, Veka Recycling. This has put us in an incredibly strong position. At times this year, they have delivered five times the level of product that they were contracted to – the kind of service and level of prioritisation that you’d struggle to get from anyone other than a sister company. With virgin material so hard to source, our lines may well have struggled without this strong partnership.
And credit to our customers too, who have embraced recycled content like never before. The transition has been smooth and it is here to stay.
Using recycled content is an important part of the sustainability agenda at Veka. But this year, we’ve seen it go from being the right thing to do, to being a critical element of our overall performance; it’s gone mainstream, and as a result, from next year, we will be ordering 50% more recycled content than this year.
Finding new ways to source raw materials has been just one factor in helping us to meet this year’s unprecedented demand, Another has been the role our employees.
From optimising stock levels, to rationalising product lines and maintaining strong and open relationships with our customers, the way in which our teams have ensured that a continuous flow of product has left the factory, has been amazing. For instance, we have averaged 99.4% on time, in full on white extrusion, an exceptional figure given the shortages of resin. Laminated product demand is where the real impact of spikes has been seen and, while performance has been good when benchmarked against others, we are focused on driving it higher.
You learn so much about people when they’re up against it, and the team at Veka has blown me away with their level of commitment and determination, in particular, the way in which the whole business has pulled together, as cross-functional working becomes the norm, both to help us deliver on the intense short-term challenges and the long-term ambition and plan. It’s this reaction to such intensity which has meant that, despite the trials of the last eight months, we have maintained our commitment to customers that if they order on day one, we will supply by day three. And, while there are exceptions due to supply or specific demand spikes that were not predictable, we keep that promise.
This year has tested our resolve and ability to achieve this, yet I have had more unsolicited positive compliments about our performance from customers in the last six months than I’ve had in the rest of the time I have been here. One of our top five customers messaged me to say:
“The overriding feeling among fabricators is that Veka has been an exceptional supplier in an extremely challenging environment.”
“To be honest, it doesn’t get much better than that. Our customers know themselves how hard it is out there currently; they know they are demanding a lot more product, and they are looking to us, as a trusted partner, to keep delivering it.
“We are working with challenges every day, yet you can be confident, as a Veka customer, that our global group and local business here in the UK is stronger than ever and the safe pair of hands you need.”
Managing director of Veka