8 Ways Supply Chain Shortages Affect Cleaning/Restoration Companies—and a Solution

By Samantha Hager

Practically every industry relies on supply chains in order to receive the highly valuable resources that make their services and products possible. When it comes to the cleaning and restoration industries specifically, the need for countless items that are currently experiencing supply chain shortages poses a major threat to growth and profits. 

Below, we’ll look at some of the largest shortages and shortage outcomes directly affecting industry professionals as well as the solution that many leaders are embracing moving forward. In doing so, we’ll determine the path to success even when the supply chain is far from successful on its own. 

1) Chemicals and cleaning solutions

Since the pandemic began, consumers have been panicked and actively buying out cleaning supply stock in order to try and prevent COVID-19 from harming their families. The problem with this is that not only do these consumers not need this level of stock but cleaning companies, business owners, and managers are simply unable to buy the necessities in time. 

According to Patrick Penfield, Professor of Supply Chain Practice at Syracuse University,  “We’ve never seen the magnitude of orders and demand placed on cleaning product companies.” 

Schools, office spaces, hospitals, and factories are just some of the locations suffering from this supply chain shortage. As the demand grows in a manner that vendors can’t comply with, the outcome is bleak for cleaning professionals looking to keep their various clients in commercial and residential settings happy. 

According to Supply Chain Dive, “The Environmental Protection Agency relaxed its regulatory requirements to make it easier for manufacturers to get products out quickly. Companies can temporarily skip EPA approval to switch supplies for some inert and active ingredients and do not need EPA approval for manufacturing facility and formulation changes.” the problem with this is that more dangerous, ineffective, and potentially deadly chemicals can be sold to unknowing vendors and cleaning professionals leading to lawsuits, workplace injuries, and a loss of particular client relationships. 

2) Parts and products

A missing part or singular product can hold back an entire cleaning company in the blink of an eye. Currently, a single missing part caused by supply chain disruptors is holding up $5 million machines and wreaking industrial havoc. In the cleaning industry, professionals rely on various machines and products to do their jobs effectively. Whether it’s carpet cleaning or hospital sterilization, supply chain disruptions can be costly and lead to several vital machines being unable to operate smoothly. 

According to a study by Thomas Index Report, industrial vacuum cleaners and repair services were two of the 10 categories with the most sourcing activity month over month. It’s also no secret that COVID-19 impacted all aspects of the healthcare field and severely impacted the supply of personal protective equipment (PPE). For professionals in the hospital cleaning, carpet cleaning, and restoration industries, these disruptions are incredibly difficult to navigate and also a massive proponent of profit losses and client relationship losses likewise. 

3) Lumber losses

For restoration companies, a lumber shortage doesn’t necessarily mean the ‘end of the world.’ However, it does mean that the costs have drastically increased and profit margins have begun to slim down significantly as a result. According to Marcum, “Over the past year, lumber prices have skyrocketed. At the end of May 2021, lumber was over $1,600 per 1,000 board feet, an increase of ~300% from a year earlier.” 

In the 2022 Restoration Benchmarking Survey Report, 97% of restoration companies stated they offer water damage restoration, 92% said they offer mold damage restoration, and 86% said they offer fire/smoke damage restoration services. Considering every one of these services is more often offered than not by industry leaders, it’s clear why lumber shortages and hiked prices are disconcerting. With these jobs more often than not requiring new lumber, these services may either need to increase in price or companies will have to accept lost profits to keep offering them moving forward. 

4) Preparation shortcomings

Preventative products such as carbon monoxide detectors, cleaning solutions, IAQ systems, and floor/carpet cleaning chemicals are all experiencing major shortages that could make preparation for future pandemic crises and supply chain disruptions next to impossible. This is not only a problem from a financial and business standpoint for cleaning companies but is also a major societal concern as a lack of these products could only help facilitate the spread of more viruses, bacteria, pathogens, and diseases. 

The impact of floors on indoor air quality and health alone is astonishing, and this is just one facet of the cleaning industry being held back by a supply chain in peril. Without these materials and products, cleaning companies not only can’t complete their work but are also unable to ensure the safety of their team and clients as well. 

5) Rising raw material costs

According to the Wall Street Journal, raw material costs have skyrocketed and corporate profits will skyrocket in return. Many of these rising costs have to do with supply chain disruption helping corporate companies to charge whatever they see fit for their small supply levels. These price hikes are less than ideal, especially for restoration companies relying on home repair materials and cleaning companies that rely on chemical solutions. 

Although the raw versions of these products may not be what industry professionals utilize, they serve as key elements of many essential items such as gas for company vehicles, lumber for restoration jobs, chemical compounds for sanitization, and parts for products and industrial machines. 

6) Workforce exodus

It’s hard to believe that any industry leader is unaware of ‘The Great Resignation’ at this point. With 41% of the global workforce thinking of switching jobs, it’s no surprise that the cleaning industry has not been immune. According to ​​Madan Kanala, CEO of Startosfy, “Job openings in Commercial Cleaning Industry have risen by 1,620% in the last month alone. Reportedly, many commercial cleaning companies are turning down new businesses due to the lack of staff. Some are even canceling the existing customers, making ‘The Great Resignation’ the biggest post-pandemic challenge for commercial cleaning companies.”

Much of this shortage has to do with a consensus amongst employees that the supply chain has exacerbated. The consensus is that American employees are overworked and undervalued which, with many companies struggling to catch up given shortages in supplies, has only become more evident as employees are forced to work longer hours with no raise in pay. 

As leaders, it’s crucial that your team feels valued and recognized even when shortages are present since this problem has now become the metaphorical ‘cherry on top’ of the supply chain disruption pile. Without paying attention to the concerns of these employees, cleaning and restoration companies are struggling to find employees let alone the supplies they need to finish projects. 

7) Facility shutdowns

Another unfortunate outcome of supply chain shortages has been facility shutdowns. For cleaning and restoration professionals, this affects supply procurement, client acquisition, and daily management operations all at once. Whether it’s the facility your company works within, a facility you service, or a facility that serves as a supplier for your team, shutdowns are less than ideal. 

However, with the supply chain wreaking havoc on every aspect of our modern society along with health and safety hazards ever-increasing, it makes sense why some facilities are forced to shut down even when it may put company leaders in a lurch. According to the U.S. Burea of Labor Statistics, manufacturers, small companies, warehouses, professional and technical service brands, and health care and social assistance facilities were the most common establishments to experience a government-mandated closure during the pandemic. With these establishments being some of the most common ones to work alongside the cleaning and restoration industries or be a part of these industries directly, it’s clear why this has become a major issue for many company owners and managers throughout the last few years. 

8) Customer budgets 

Lastly, with supply chain shortages truly affecting every industry as well as residential consumers, one of the most concerning outcomes of these disruptions has been a decrease in budgets for cleaning and restoration service customers. 

Whether these customers are residential and part of ‘The Great Resignation’ or they are commercial and are experiencing the same profit decreases as you are, this decline in overall incomes in America has been a major problem for small company owners to handle. The result has been less large projects, return clients, and profits overall. 

Although these issues may seem relatively ‘scary,’ the goal of this article is not to fearmonger. Instead, by addressing a few of the issues the cleaning and restoration industry is currently battling with, it becomes far easier to visualize the solution that is all too obvious for overcoming these roadblocks moving forward. 

It’s time to ‘clean up’ and localize American supply chains

A recent article by IMD explains the power of localizing and reshoring your supply chain. Supply chain shortages can be mitigated entirely with this simple solution. “Essentially, global trade has led to supply chains becoming more localized. Trying to produce and ship locally will ensure less disruption in case of limited movement of people and goods,” says Bettina Büchel, Professor of Strategy and Organization at IMD. 

This is just one of the many sources online encouraging companies to stop seeking overseas suppliers moving forward. With these disruptors wreaking havoc on every industry, it makes sense why countless leaders are turning to American suppliers to get the job done and appease their consumer bases. For cleaning and restoration companies, local suppliers are more than capable of handling supply demands and ensuring the products are safe before delivery as well. Instead of cutting EPA corners or taking risks with suppliers you can’t communicate directly with, it’s time company owners and managers look for local solutions that can simply sit down and get things done. 

Not only does this solution save company owners and managers money but it also helps to stimulate the local economy. As a local business owner, this community support could grow into a cross-promotional and positive relationship that only furthers your perceived status in your region as well as your customer base. 

For now, it’s all about procuring these suppliers in an efficient and educated way. To learn more about effective local supplier procurement, check out how to build better business relationships and succeed together today.