In our continuing Industry Forecast series, we talk with John Hazen White, Jr. – Executive Chairman & Owner of Taco Comfort Solutions, on topics such as the short-term economy, supply chain issues, and lessons learned over the course of the pandemic. Here is our exclusive Q & A with John Hazen White, Jr.:
MH: We’ve all experienced supply chain shortages, whether it’s industry related or things such as computer chips, plastics, bacon, etc., for example. Do you project a turnaround soon or within the next 6-12 months for certain materials that relate to your specific company?
JHW: Due to the China’s current COVID lockdowns and further supply chain disruptions caused by the war in Ukraine, we believe that chain issues are going to get worse over the next several months. Much of the processing of base raw materials and secondary materials has been shut down, further straining the supply chain. Exacerbating these issues, the skyrocketing costs of fuel and transportation are going to make the delivery of goods more costly.
MH: We are in the midst of some of the highest inflation rates since the early ‘80s. Do you think that higher inflation becomes a “newer normal”? Explain.
JHW: Eventually costs will temper demand and inflation will slow. Unfortunately, this will be accompanied by an economic downturn. The risk is that governments may try to artificially stimulate the economy, which could potentially prolong the inflationary upturn.
MH: In general, how do you see the economy short-term? Give a few examples of how you draw that conclusion (housing starts, commercial construction, etc.).
JHW: The short-term economy appears to be healthy. Orders remain strong and backlogs are at all-time highs. Data such as housing starts point to continued growth in 2022, with low inventory levels and a tight rental market driving that growth. In addition, manufacturing construction is on the rise to meet capacity demands.
MH: Where are you seeing signs of positivity, if any?
JHW: Short-term, the economy appears to still be growing, but at a slower pace. Although the last two years have been very challenging, these challenges can also serve as a catalyst for improvement. Companies are reinventing their structures and processes to adapt to a much faster business pace. We’re seeing step changes in productivity, efficiency, and innovation to keep up with today’s challenges and changing business environment.
MH: How do you as manufacturers work with customers who are dealing with longer lead times and/or higher prices? Is it a matter of open lines of communication?
JHW: Constant communication and strong partnerships are great ways to manage through the current supply chain and production issues. Most customers understand the challenges that all manufacturers are currently dealing with – they just want to be kept informed to minimize surprises and plan their projects accordingly.
MH: It seems that in today’s employment landscape, it’s hard to find good labor, whether it’s truck drivers, waiters at restaurants, etc. In our industry, how do we continue the fight to highlight the trades as a great career choice?
JHW: Social media is a great way to reach future tradesman of our industry. We have been running a social media campaign called #TradePower, which highlights successful contractors in the industry and the pride they take in their craftsmanship and service. Above all else, Taco has benefited by continuing to do what we always do – treat people right.
MH: In spite of COVID, people must move on. How has your company evolved—or continued to march forward—over the past two years, and talk about any new initiatives, expansions, etc.
JHW: The sudden disruption of COVID restrictions in 2020 forced a much faster adoption of planned technology upgrades. A planned rollout of organizational digitization was condensed from 18 month to two weeks, which gave us the ability to continue functioning and growing in the new work-from-home reality. One of the biggest positives we saw during the pandemic was the rise of global collaboration. The quick adoption of virtual meetings boosted our collaboration with our entire global workforce, ensuring the best players were part of any team meeting. This has led to an increased sharing of ideas on everything from safety protocols to operational improvements. More than ever, we are thinking globally to optimize our resources and maximize our growth.