Is this the “New Normal” for Procuring Monitoring Equipment?
Posted: May 23rd, 2022Authors: Katie F.
Industrial facilities across the country are continuing to feel the impacts of the global pandemic, rising inflation, and supply chain disruptions. So how does this affect you and your ability to procure monitoring equipment? Unfortunately, the answer is that lead times are longer and costs have increased. We’ll dig into each of these to help your facility navigate the current challenges of monitoring equipment procurement.
Supply chain disruptions are causing monitoring equipment lead times to increase. The manufacturer and transport of parts and materials are taking longer than the pre-pandemic era. The lead times may be further extended for components made of exotic materials or electronic (or chip based) components that need to be shipped from overseas, especially those sourced in Asia. For example, equipment used to monitor the net heating value of vent gases, such as gas chromatographs, have lead times that have increased by more than 10 weeks when compared to the pre-pandemic world. It’s important to note that these lead times start once the purchase order has been issued, so it’s imperative to begin planning for your monitoring equipment needs early. Also, you may have to be flexible on specific design requirements for monitoring systems. Accept substitutions, it may be the only way to procure a complete monitoring system. Delays are not only limited to equipment; the resources needed to design, build, and integrate a monitoring system are also stressed.
The current national inflation rate is over 8 percent; however, some monitoring equipment components are experiencing inflation rates higher than the national average. We are seeing monitoring equipment quotations with a validity of 30 days in the best case scenarios. In some situations, the quotations are only valid for 3 days. The validity of a quote is not only based on cost but also availability. What is in inventory today may not be in inventory tomorrow, and who knows when more inventory will be available. This means your facility needs to make decisions on monitoring equipment quickly to avoid a cost increase if a new quotation needs to be issued. One more thing: this isn’t a “throw more money at it” kind of thing. If the equipment is not available and can’t be obtained, money will not magically make the equipment appear.
As you can see, increasing lead times and inflation can both slow down implementation and increase the cost of monitoring equipment projects. It would be nice to able to quantify the number of weeks you should plan for or the dollars of increased cost; however, these factors are consistently changing to the point where ALL4 is not surprised at what we are seeing in quotations anymore. It seems to be the new normal and we have to react and plan for it the best we can. It is key to be in communication and collaboration with your suppliers. Make sure to communicate expectations clearly and often and set check in meetings along the way. Getting budgets approved will allow the team to issue purchase orders and get the equipment moving more quickly. Consider being flexible on your terms and conditions and approved manufacturers list. Line up your installation contractors early and be willing to install late items in the field when necessary. The bottom line is: don’t wait to begin planning for projects that require installation of monitoring equipment.
If you take action to mitigate the risk of monitoring equipment not being installed and operating by a specific compliance date, there may be room to request an extension. If a regulatory agency needs to be approached to consider an extension request, be prepared to show a “good faith effort” in procuring the equipment. Having clear documentation of the steps taken, including issuance of purchase orders, to procure the equipment and manpower to execute a project on time will be crucial for justifying the extension to the agency.
If you’re interested in how the current monitoring equipment procurement challenges impact your facility or project, please contact Katie Fritz at email@example.com or your ALL4 project manager for support.