A new deal for the cleaning & hygiene supply chain
By Lorcan Mekitarian, Chair of the Cleaning & Hygiene Suppliers Association
The coronavirus pandemic is having a huge impact on the cleaning industry. Essential for keeping spaces including hospitals, care homes, food retailers, public transport and now offices clean and safe, the sector and the cleaning operatives who work in it are getting the recognition and respect they deserve.
To do their job they need the high quality cleaning and hygiene products provided by the UK’s manufacturers and distributors. But trading conditions have been amongst the most challenging these businesses have ever experienced.
Faced with extraordinary demand for key products, the fragility of the ‘just-in-time’ supply chain has been exposed. A new approach is needed for the future.
Over recent decades there has been an unremitting downward pressure on price. Understandably determined to get exceptional value for money, buyers of cleaning and hygiene products have demanded lower and lower prices. The industry responded in the only way possible – outsourcing manufacture to lower cost-base economies. The move to manufacture in China, Malaysia and other countries in the Far East has been unremitting.
Vital products including gloves and disposable polythene aprons are currently very scarce. Outsourcing is a huge contributor to these supply side shortages. Recognising these products are a relatively small contributor to the overall cost of providing cleaning services, the CHSA is arguing the time has come to focus on product availability and establish manufacture in the UK and Europe. It’s time for a new deal for the supply and hygiene supply chain.
Manufacturing in China was hit by a perfect storm. China re-directed product scheduled for export to its own use or to the highest bidder. Production then dropped off, as normal during the Chinese New Year and remained low as China’s own lockdown continued. The result was severely limited supply at exactly the moment we needed to ramp up.
For some products including gloves, gowns and aprons, as early as January, when the beginning of a dip in supply was noticed and before demand here started to rocket, UK businesses turned to other Far East countries to source product. These factories were also soon hit by a lockdown and while they have now opened up, their order books are full to Q3 2021. Unsurprisingly, some factories are first serving their own countries. Less altruistically, others are keeping back capacity to capitalise on the inflated prices being caused by the huge imbalance between supply and demand.
UK companies are working hard to develop manufacturing capacity in the UK and Europe, but it can’t be achieved over night. Resilient production is not expected to be on stream until Q1 2021 at the earliest.
In the meantime, unscrupulous profiteers, primarily selling online and often little more than shell companies, are making all sorts of claims about product. These products generally have an exceptionally high mark-up and there is no guarantee they meet industry standards. For example, there is a marked increase in imported Personal Protective Equipment (PPE) with fake or no CE marking, the certification mark that indicates conformance with European Union directives regarding health and safety or environmental protection.
A vaccine remains the only certain way out of the coronavirus pandemic. Until it is widely available, demand for cleaning and hygiene products will remain high. Looking further into the future, another pandemic is very possible and will almost certainly continue to be one of the biggest risks facing the human population. Against this backdrop and learning from our experience of recent months, increasing the resilience of our supply chain is essential.
As indicated, manufacturers are already developing production capacity in the UK and Europe, meaning product will be able to flow through the distributor network to the contract cleaning and facilities management companies who need it so badly. An inevitable consequence will be a rise in prices, but still nothing compared to the money being extorted by the profiteers capitalising on the extreme shortages. In return, consistency of supply and quality can be guaranteed; contract cleaners and facilities managers will be certain they can get the products they need to do a good job, safely.