Company executives included a question about lead times. They then decided to add a second clarifying question about lead times before the pandemic. What they found was a significant shift in expectations.

Prior to the pandemic, 41% of respondents said five to eight weeks was an expected lead time. Another 32% said nine to 12 weeks, and 24% said one to four weeks. Only 3% said more than 12 weeks was an expected lead time.

Since the pandemic, 41% of respondents said more than 12 weeks was an expected lead time, with only 3% saying one to four weeks. Eighteen percent said five to eight weeks, and 38% said nine to 12 weeks.

John Buck, director of strategy and commercial industrial sales at Marlo, said the company makes most of the parts for its air handlers in-house. But fans are among the parts bought from suppliers, and that’s an item that faces supply chain challenges. Buck said a two- to three-week turnaround before the pandemic became six to eight, then 10 to 12.

Fans Cause Most Delays

Early last summer, Marlo’s preferred fan suppliers were out at 19 weeks, Buck said. Today, it’s something of an unknown. One fan might take 20 weeks, another might take eight. An ECM fan could take a year.

“They’re struggling to get motors, they’re struggling to get material,” Buck said.

Marlo executives visited every fan manufacturer at this year’s AHR Expo. They all told the same story. Buck said customers understand the situation because they face supply challenges themselves. And it’s the same for Marlo executives. They can get material, but it costs a lot more.

For example, stainless steel was $1.41 per pound a year ago. The price shot up to around $5 a pound for a time and remains elevated. Buck said Marlo resorted to monthly price updates in their configurator software, where it was previously 90 days.

“We’re monitoring this situation pretty closely,” Buck said. “From a raw material standpoint, there are certain commodities that aren’t hard to get, but you better be prepared to pay for them.”

It’s the same for the entire industry. The Associated General Contractors of America recently reported that construction input costs outpaced bid prices in March. The Producer Price Index for new nonresidential building construction — a measure of the price that contractors say they would bid to build a fixed set of buildings — increased 0.6% for the month and 17% year-over-year.

Skilled labor also is in short supply. Buck said finding qualified welders is a challenge. This leads to the company working with customers to find alternatives.

Many coils can be made with either copper headers or stainless steel welding boxes, Buck said. Marlo clients now receive an incentive of either a shorter lead time or a discount to take the copper option.

The pandemic accelerated Marlo’s adoption of technology, Buck said. In the long run, this should benefit the company. In the short run, Buck said, Marlo — like its customers and suppliers — will have to deal with supply chain challenges.