Business, Products

Do we have the supplies to continue moving forward

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Funeral homes and those that supply funeral homes have met virtually every need necessary to serve those in need this past year while we have been under the COVID-19 pandemic situation.  When we realized that this pandemic was upon us the situation for most of us was about masks, gloves, body bags, and in most situations, manpower.

Funeral home, cemetery, and supplier organizations had to figure out how to procure those items and schedule their staff in a way that allowed workers to be somewhat secured with their own vulnerabilities before they could take care of the public who was trying to mourn their dead.  Then it was about how to make arrangements and conduct some type of services in a socially distanced world. . . . Fortunately, we have gotten pretty good in those regards. . . Unfortunately, it appears that we still have a ways to go before we can settle back into the “old normal”.

I started to wonder. . . . are we still ready for what may come?  I’ve heard of shortages in some areas of manufacturing in the United States.  For instance, since we did not travel at all this summer, Angie and I decided it would be a good time to overhaul the kitchen at our lake cabin.  When looking at appliances we were told to buy what was in stock because there was no telling when the appliance store would get a new shipment of appliances because of backlogs with materials necessary to build some of the items.

And, furniture stores in my hometown did not let new furniture deliveries be done prior to Christmas.  To do so would take inventory off the floor at a time they needed it most in order to make more sales.  I was told if bought furniture was delivered to the consumer prior to Christmas they could not get restocking furniture fast enough to have on hand for the Christmas furniture sales rush.

Finally, an electrician friend of mine told me several house projects in our community were delayed because electrical companies could not get enough of those plastic boxes that fit into walls where light switches were installed.  There was just no supplier that had them.

It made me think about steel production and casket manufacturing.  By reading between the lines you can figure out that caskets have been sold in higher quantities over the past 12 months than the period before that.  Here is the latest report from Hillenbrand Industries, parent of Batesville Caskets,  which represents the July, August, and September quarter of 2020.  By a revenue measure, they mention that casket sales were up 8% over the previous year and, more ominous, they predicted that casket sales for October, November, and December 2020 will be up 12-15%.

I also did some research and found the graph below which indicates United States steel production over the past 25 years.  I noticed from this graph that steel production was greatly curtailed in the early part of 2020 when many factories of all kinds idled workers due to coronavirus threats.

*Right side axis number represents thousand tons of production

Here is what the Draper blog says of the current steel situation in the U.S.A.:

“What is happening?
All steel intensive manufacturers in the U.S. are facing supply shortages, and those shortages have intensified since October 2020.

There are several reasons for the current steel shortage:

  • Several steel production facilities were shut down during 2nd & 3rd quarters of 2020– about 19 million tons of capacity. Although facilities are being restarted, they are not expected to be able to meet demand until at least the end of the first quarter.
  • Shutdowns were due to Covid-19 greatly cutting demand and creating a dearth of workers. 
  • Steel imports were cut greatly due to worldwide shutdowns increasing demand for U.S. manufactured product. 2020 steel production in the US was 18% lower than 2019. 2020 steel imports by the US fell by 22% compared to 2019.

In addition, inventory levels at service centers and warehouses have dropped to their lowest levels since 2004, average mill lead times are at 9.2 weeks compared to just 4 weeks in 2020, demand is exceeding forecasts, and extended lead-times make it impossible to replenish stock levels.”

So, this is one of those times when I have no answers, just questions.  However, this perceived shortage is something that funeral homes should be aware of and it is something you should probably have a good conversation about where your steel casket supplier sits as to inventory availability.

In my research I also came across a few articles that I thought would be of interest to the death care industry about casket shortages. . .now and back in the 1918 Spanish flue epidemic.

 

NFDA Webinar -TODAY 1:00 pm Central Time-  SBA Stimulus Review.  This is an update on the Small Business Administration’s stimulus package.  Presented by Tim Bridgers, Senior Vice-President at Live Oak Bank.

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One Comment

  1. Interesting perspective. Add to the inventory shortages and production leadtime extensions the supply chain pressure of recreational vehicles, boats, yachts, and personal aircraft, which are in high demand today, and the problem becomes even more complex. These types of products are causing unusual and unprecedented supply side pressures not just on steel but other raw materials as well.

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