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ASCM Insights

Air Conditioning Supply Chains Feel the Heat

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The world is experiencing some tragic indicators of climate change. An unprecedented amount of rainfall has caused catastrophic flooding in Germany, Belgium and the Netherlands, leaving about 200 people dead, many more missing or displaced from their homes, and tens of thousands without access to power or drinking water. Greenpeace East Asia predicts that several regional cities will suffer a similar fate within the decade. On the other end of the spectrum, Madagascar is facing its worst drought in four decades, which has led to the world’s first-ever climate-change-induced famine.

Here in North America, residents are dealing with multiple deadly heat waves. Canada reached temperatures never before seen — some as high as 121 degrees Fahrenheit — causing the deaths of more than 100 people in Vancouver alone. Boise, Idaho, had temperatures above 95 degrees Fahrenheit for 24 straight days. Las Vegas hit an all-time high of 117 degrees Fahrenheit a couple of weeks ago.

Unfortunately, many people are unable to find relief due to the scarcity of air-conditioning units, parts and laborers. Steve Seitz, vice president of sales at Blanton’s Air, Plumbing and Electric in Fayetteville, North Carolina, told ABC 11 News the root causes of the problem are copper and steel shortages. Others in the industry blame the talent gap, an inability to obtain parts from other countries and COVID-19 outbreaks at manufacturing facilities.

Of course, with so many normally temperate areas suddenly in need of air conditioning, demand is spiking. “On Monday, there were four-hour waits to get into our store,” Norman Chusid, owner of Portland’s Ankeny Hardware, told The Weather Channel. “All the big box stores in the area and all the hardware stores and variety stores were sending everybody here.” In three days, Ankeny Hardware did nearly three months’ worth of business.

In addition, employees returning to offices after the pandemic are receiving a warm welcome — but not the kind their companies intended.  Commercial heating, ventilation and air-conditioning systems are failing after sitting idle during the pandemic, heightening demand for components.

It’s important to note that these regional surges are relatively small compared to the amount of additional cooling equipment that will be needed in the years ahead. As global temperatures continue to rise, the International Energy Agency predicts the number of air-conditioning units will increase 66% by 2030, up from the roughly 2 billion units in operation worldwide today.  

Stay cool, think green

Supply chains are in jeopardy but, more importantly, lives are at stake. In numerous countries, extreme heat is the deadliest weather hazard. A leaked draft report from the United Nations’ Intergovernmental Panel on Climate Change warns that hunger, drought and disease will affect millions of people worldwide within just the next few generations. It’s vital for supply chain organizations to examine and improve the environmental sustainability of their operations.

“All of this disruption has been a critical wake-up call for supply chain professionals. It’s unfortunate that a global disaster was required for us to get here, but we now have a precious opportunity to emerge better than we were before,” ASCM Editor-in-Chief Elizabeth Rennie writes in SCM Now magazine. “As the spotlight shines on our industry, the entire world is beginning to understand the impact of supply chains on their lives. Hopefully, businesses will take this opportunity to review their key focus areas and, ultimately, choose to prioritize people and the planet.”

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About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer at ASCM, the largest nonprofit association for supply chain and the global leader in supply chain organizational transformation and innovation. Prior to this, he was the managing director for the Operations Consulting Group of American Express Tax and Business Services. His leadership roles have included project management, business process redesign, and individual and organizational alignment. Eshkenazi may be contacted through editorial@ascm.org.

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