Things are improving in the world of aftermarket parts and components compared with where they were at the height of the Covid-19 pandemic. Yes, supply-chain problems continue to pop up like pits of quicksand from which there feels like no escape, but major OEM and aftermarket suppliers such as Patrick Industries and Lippert say they are getting better at dodging them — and are projecting confidence from their respective headquarters in Elkhart, Ind.
“If I compare where we are today to six or eight months ago, at least on materials that we bring in, we are in better shape than we were,” says Rick Reyenger, marine group senior vice president at Patrick. “For example, on aluminum extrusions, we were experiencing 52-week lead times. Usually, it’s six weeks. Those lead times have gotten better, but we really had to get out and bring on some additional suppliers and move products around.”
Lippert, too, reports a better supply-chain outlook for this year than the industry endured in 2021. “But there’s still a lot of improvement that needs to be made,” says Jeff Wysong, vice president of sales, marine.
“There’s so many variables. Some of them are being corrected, but if you have anything to do with components being imported, there’s still restrictions on that, whether it’s shipping containers or overseas factories,” Wysong adds. “The ports are still backed up. The rail services [are] still over capacity.”
Trucking, he says, also remains tricky because there aren’t enough drivers behind the wheel to move all the commerce that needs moving. “We’re not back to no problems,” Wysong says. “There’s still a lot of interruptions out there. Boatbuilders or retailers, there’s a lot of different things — if it’s one finished product that takes 100 different components, one component can hold up the whole product.”
Reyenger says Patrick — which supplies the marine, RV, manufactured housing and industrial markets — has been able to “move materials around from business unit to business unit” to relieve some of the supply-chain kinks. The company also has sent staff around the world to improve its options for sourcing.
“It’s really a combination of knowing where to look, where to put feet on the ground and making connections to find what we need,” Reyenger says, adding that the past couple of years have been the worst supply-chain situation he has seen in his 45 years in the industry. “And then you had labor issues on top of that, just trying to keep plants running and keeping our customers supplied.”
Wysong, a 20-year marine industry veteran, says he’s also seeing things happen that are new. For instance, there has always been a relationship between builders and component dealers — one has to know what’s happening with the
others to keep products moving to consumers. “But over 2021, I think it became bonding over what can we do to solve the problems,” he says.
And just as everyone feels as if they’re starting to figure all of that out, he says, new challenges appear poised to strike the supply chain, raising additional concerns. “A lot of things happening globally are going to challenge that — inflation, everything going on in Ukraine, there are a lot of things out there,” Wysong says. “Coming out of the last quarter of 2021 and into the first quarter of 2022, it’s gotten better, but there’s still challenges with oil-based products, some products that are metal — those are going to remain.”
One solution may be a strategic reduction in the number or types of available components, he says. “We have talked to the boatbuilders we’re supplying, and we’re taking a really hard look at best practices for manufacturing purposes,” Wysong says. “There may have been a component with six or eight colors; maybe we offer three or even one, just so we can help take out the variables and help our suppliers and the supply line be more focused.”
More Acquisitions Likely
Both companies had a healthy number of acquisitions in the past year and are expecting more acquisitions to come, although perhaps not quite as many as last year. “I think you might see a little bit of a slowdown on the mergers,” Wysong says of Lippert’s plans. “But all in all, I think 2022 will be very similar to 2021.”
He says he’s anticipating a slight slowdown because “everybody needs to get their arms around what they’ve got and really be able to support what the market is demanding. Some of that, they will have some control over, but if it’s metal, petroleum-based, global challenges, weather challenges — those are the uncontrollable.”
Reyenger says he sees acquisition activity continuing well beyond what Patrick is doing in the sphere of marine parts and supplies. “I look at the market, right now there seems to be a lot of activity in marine in general, not only with competitors but also with dealers and boat companies,” he says. “That consolidation seems to continue out there, not just in components but overall.”
Past-year acquisitions for Lippert included Elkhart-based Furrion, which makes electronics, appliances, camera systems, power distributors and off-grid energy solutions; Goshen, Ind.-based Trazcor, a specialized metal fabrication company; Kaspar Ranch Hand Equipment, a South Texas maker of custom bumpers, grill guards and steps for the automotive aftermarket; Markdorf, Germany-based Schaudt, which supplies electronic controls and energy management systems to the European RV industry; and Kendallville, Ind.-based Wolfpack Chassis.
“These past ones have been mostly on the RV side or the aftermarket side, but that’s been going well,” Wysong says, adding that Lippert’s most recent marine acquisition was in December 2020, of New Paris, Ind.-based Veada. It manufactures and distributes boat seating and marine accessories.
Patrick’s purchases in the past year included Indiana-based Williamsburg Marine and Williamsburg Furniture, which manufacture marine and RV seating; Rosenburg, Texas-based Wet Sounds, a designer, fabricator, engineer and distributor of audio systems and accessories such as amplifiers, tower speakers, sound bars and subwoofers; Tumacs Covers, a Pittsburgh-based manufacturer of custom boat covers, canvas frames and Bimini tops; Nashville, Ga.-based Coyote Mfg. Co., a designer, fabricator and manufacturer of steel and aluminum products, such as trailers, towers, T-tops and leaning posts; and Alpha Systems, an Elkhart-based company that makes adhesives and sealants, roofing membranes and injection-molded products for the RV industry.
“We’ve been pretty active in the marine space for the last five years, and this year, as we look at our portfolio and look at what makes sense in terms of what we already have, we’re always looking for opportunities out there,” Reyenger says. “This year, we found a number of them.”
Wysong says Lippert had a strong showing at the Miami International Boat Show in February, with “a big following of captains” who attended social events and dinners. “We talked about what the consumers are looking for and what we can do, whether it’s pontoons, towboats, any kinds of boats,” he says. “That is giving us a lot of good feedback.”
All of that feedback will help to inform the “Lippert Captains” campaign, a social-media effort where boaters join the virtual club to discuss their wants and needs. It’s an idea that Lippert brought to the marine side from its RV
business, where consumers seemed to love it.
“We get a lot of influence on products for the retail consumer, so when we’re working with boatbuilders on bringing new products to the industry through innovation, we take a lot of feedback from the customers, the end users,” Wysong says. “That just started in 2021, and we’re getting a lot of good feedback.”
Reyenger says Patrick also plans to place more of an emphasis on online and social-media marketing that’s not just about products, but also about what customers want to learn about using them. “We have a YouTube presence with a lot of our products,” he says. “What we tend to do is put installation videos up, things that might be of interest to a customer in terms of how they are using our products. YouTube is a great way to show people firsthand what a product is all about, and show people how other customers are using our products.”
Those kinds of videos are especially attractive to newer boaters, he adds. If the industry wants to grow, its marketing needs to appeal to those customers online. “One of the goals of the industry is to bring in new people,” he says. “There’s a big push in diversity, and that includes getting younger people engaged in boating.”
Opportunities for the Future
It’s been a long couple of years filled with unprecedented twists and turns, and Reyenger says he’s not placing too much faith in anybody’s crystal ball for the rest of 2022, especially with all the news coming out of Ukraine. “But I attended the Miami boat show, I was at a conference this week, and I know a lot of people. I think the sentiment for continued growth in the industry is still very, very strong,” he said in early March.
Lack of inventory will continue to be a factor that causes hurdles, he says, and if retail demand remains strong, the pipeline that feeds boats to consumers will need more time to recover. “Whether that’s a year down the road or two years down the road, everybody has a different opinion about that,” he says. “I think that for the next six months to a year, we’re going to continue to see certain components that are a challenge from time to time in the supply chain, and that will affect us from a delivery standpoint, but we’re doing everything we can to stay ahead of that. I feel good about what we’re doing and the position we are in.”
It will be helpful, he says, that OEMs are now giving Patrick greater visibility into what they will be building next, and what parts and components they will need at specific times. “From an inventory standpoint, we’re trying to make sure we have the right products at the right time,” he says. “Our customers are doing a lot better job in terms of giving us visibility into their production schedules and forecasts, and that is key going forward. The more visibility we have, the more we can plan and prepare to meet their needs.”
Wysong says that in addition to continuing to address supply-chain and other challenges, Lippert is working internally on its culture of taking care of “teammates.”
“We’ve been on a 10- or 12-year journey of growing our culture,” he says. “You can’t just flip a switch and have everyone be happy with the culture in an organization. We’ve taken it to a next level. We have goals set for retention. We are almost 15,000 teammates strong now. We want to fortify that and keep them and their families safe and strong for years to come.”
There were a lot of lessons learned during 2020 and 2021 about what it means to feel safe and strong, and to actually be safe and strong, both in business and in life. First and foremost, Wysong says, is to remember that it’s not possible to build anything without people. That’s why Lippert is continuing to work on strengthening its internal culture.
“Our objective coming out of 2021 is retention and training,” he says. “We want people taken care of and going home safe. We’re doing a lot of internal things to make our company even more solid when it comes to our teammates.”
This article was originally published in the April 2022 issue.