The Supply Chain is Regaining Strength –

Next Article

Spring is upon us:

What Does that Mean for Your Business?

BY BILL BEYERLE, AUTOMOTIVE INSTALLED SALES MANAGER, CHEVRON LUBRICANTS ANGI SCHOOLCRAFT, LEAD MARKETING SPECIALIST, CHEVRON LUBRICANTS

The breakdown of the supply chain was arguably the most severe economic consequence of the COVID-19 pandemic, the root of all the problems that followed. It affected virtually every industrial and retail sector, resulting in product shortages, vacant storefronts and layoffs. It led to the highest inflation in a generation and instability in the financial markets worldwide.

Automotive service shops were especially hard hit. Availability of certain oil products became severely limited, and add-on products made in Asia got stuck in congested ports. Shop owners had to get very creative, juggling suppliers and finding substitutes for the brands they knew and trusted – sometimes compromising quality standards while staying within OEM guidelines, and often paying higher prices in the process, simply because demand outstripped supply.

Now, we are seeing signs that the supply chain may have turned the corner. News reports from early 2023 say that shipping timelines are shrinking, ports are unclogging, and dockworkers are back on the job. Warehouses are filling up. Inflation appears to have stabilized. Most significantly for auto service shops, the large-scale, brand-name suppliers you relied on historically are now back to or quickly approaching full production.

sense to continue carrying a wide variety of brands in your inventory? Do the products that met your short-term needs still fit into your long-term plans? If not, you may want to start selling through that part of your inventory and consolidating around the products you prefer.

“Now, we are seeing signs that the supply chain may have turned the corner. News reports from early 2023 say that shipping timelines are shrinking, ports are unclogging, and dockworkers are back on the job.”

Reevaluating your product mix also means revisiting your vendor relationships. Chances are you now have a longer list of vendors than you did three years ago. This is not a time to be burning bridges –as we have pointed out often, you always need to be prepared for the unexpected, and that means having backup suppliers in case this apparent recovery falters. However, it does make sense to re-prioritize your vendors based on what each one has to offer. Talk to your suppliers and get a good sense of their level of commitment. Identify those that will be able to reliably deliver the quality products you need, and which ones you know you can count on in a pinch.

Meanwhile, we are hearing from independent lube operators that business is picking back up. Customers that may have put off their maintenance while their cars sat in their garages are starting to come back for oil changes and inspections. That tracks with some of the key industry metrics we follow – for example, the number of cars on the road and total miles driven is increasing. New car sales are coming back steadily.

In other words, supply and demand appear to be returning to a state of equilibrium. That is undeniably a good thing. But it means we are in for another business readjustment. Having adjusted to a scarcity of certain products and a downturn in business, how do we readjust to a business environment that more closely resembles our pre-pandemic experience?

Now is the time to revisit your lubricant product mix. Perhaps you began stocking products you had not carried in the past just to keep up with customer demand and avoid the risk of running out. Does it make

T his is also an opportunity to realign your costs according to volume. With a loosening of supply lines and inflation stabilizing, you may find you are in a stronger negotiating position on price. Larger suppliers who are at or near production capacity may be able to show a little more flexibility due to their scale.

While we’re not entirely out of the woods, all signs point to a healthy restoration of balance on both the demand and the supply side. It’s a far cry from where we were in 2021, and it bodes well for the future growth of the business.

Bill Beyerle has been with Chevron Lubricants for more than 25 years and is currently the Automotive Installed Sales Manager. You can reach him at BillBeyerle@chevron.com.

Angi Schoolcraft has been with Chevron Lubricants for more than 19 years and is currently the lead marketing specialist supporting Havoline®,Havoline xpress lube®, Chevron xpress lube® and Techron®. You can reach her at angi.schoolcraft@chevron.com