DeFehr Furniture’s battle with supply chain issues isn’t unique to the company, according to business advocacy organization Canadian Manufacturers & Exporters (CME).
The furniture company announced Thursday that its Winnipeg plant will be closing, leaving hundreds of employees out of work.
CME’s Ron Koslowsky told Global News that many businesses continue to struggle with supply chain disruptions after months of hard times through the COVID-19 pandemic — whether it’s with labour or trucking, or a single missing piece that holds up an entire production system.
“Profitability is down because of all of this, so depending on who you are and what product you have, it’s all over the place,” Koslowsky said.
“There’s no question there’s heavy strain and stress on the whole economy and the whole manufacturing sector.”
That stress, he said, is being felt most acutely by smaller businesses that are bearing the brunt of it while larger ones get their orders filled first by suppliers.
“One supplier told (a business) that, three days before a key delivery, it might take another 11 months to get that delivery.
“That’s the type of stories we’re hearing, and companies have to figure out ways of getting around that.”
Ultimately, Koslowsky said, the impacts will also be felt by consumers, as far as product availability, choice and price are concerned.
He said supply chain issues are getting worse in some areas, and some companies are unlikely to make it through the heavy strain, but as select production shifts to North America, some areas will see improvement in the years to come.
“I think because of inflation related to all of this, you’re going to end up having the economy start to contract and demand less — which will ironically make it easier to get the materials and even the labour that we need.”
For DeFehr, it’s too little too late.
Company president and CEO Andrew DeFehr told 680 CJOB on Thursday that the local facility is shutting its doors for good in August.
“At some point you run out of equity in the business,” he said.
“You try to run at a loss, hoping that you can eventually get to break-even and get to greener pastures, (but) we were looking at the medium (and) long term and thought ‘I don’t think we can make it.’”
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