Saskatoon manufacturers grapple with supply chain woes

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Crestline Coach CEO Steven Hoffrogge says the company has never seen such high demand for ambulances — or had as much trouble getting the materials to build them.

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The Saskatoon ambulance manufacturer is one of many companies caught in a global supply chain crunch, trying to reconcile roaring demand with limited access to key supplies.

“I’ve been in this industry for going on 10 years, and the escalation of our cost base is the most significant that I’ve seen it,” Hoffrogge said.

Crestline and its sister companies wrote a letter to Ford and General Motors recently, asking them to make more chassis available so they can keep up with supply — which he is confident they will do, Hoffrogge said.

In the meantime, Crestline has enough for a few months. After that, “It’s sort of a week by week assessment that we’re doing here locally in Saskatoon to find a path that allows us to keep everyone fully employed,” he said.

Crestline, which employs more than 250 people in Saskatoon, is far from the only local firm caught between a rock and a hard place.

David MacLean, the Alberta and Saskatchewan vice-president for Canadian Manufacturers & Exporters, said companies across the Prairies and the globe are grappling with the same shortages as the economy jerks to life, often scrambling to procure the products they need despite more than healthy demand for goods from farm equipment to vehicles to glass to electronics.

“We’ve never seen anything like it,” MacLean said.

“It’s like they’re under siege from every angle, whether it’s shortages, whether it’s supply chain disruptions like the blockage of the Suez Canal, whether it’s cargo container shortages, ship shortages … everything.”

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The cruel irony is that business should otherwise be booming, Hoffrogge said. The easing of pandemic measures on both sides of the border is fuelling demand for goods, and everyone needs ambulances.

Crestline’s sister company, Demers, had to slow production at its Quebec plant because of insufficient chassis. Hoffrogge said he suspects part of the problem is that producers overestimated how long consumer demand would remain down during the pandemic.

“In my personal opinion, it was a missed assessment as to how long retail vehicle sales would remain depressed.”

His is not the only industry affected.

Calian, formerly SED Systems, produces electronics for agricultural firms, satellite communications and space exploration — things that can’t afford to fail, noted company president Patrick Thera. But the Saskatoon firm relies on outside producers of microchips and other goods to create those products, and producers can’t keep up with rising global demand.

Suppliers who used to deliver goods in just a few months are now giving estimated wait times of closer to a year, Thera said, forcing procurement teams to cast wider nets to get the goods they need.

“It’s scary to be in between that sandwich, because there’s nothing you can do to raise the price and not much you can do about the deliveries either,” Thera said. “It has a big effect on us. We’re hoping it’s a temporary thing. We’re expecting it to level out in six months to a year. I like to be optimistic. But in between (now and then) we’re really having to struggle keeping our customers happy.”

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McLean agreed with that assessment, saying he expects supply chain issues to stick around for the remainder of the calendar year.

Hoffrogge and Thera are both advocates for policies that make such goods easier to import to Saskatchewan, but with companies across the world clamouring for the same parts, the best they can do now is wait.

“It’s a little bit of a perfect storm,” Hoffrogge said.

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