4 Reasons You Need to Pull the Trigger on Your Elevator JobRolly Mechler
I have been working in industry for over 30 years and in the elevator industry for over 20 years and I have never in my career experienced the volatility that we are currently experiencing. Obviously, there is “nothing new under the sun”, but using the word “unprecedented” is not totally unreasonable.
I received a quote last week from an equipment manufacturer for an identical job to one we installed two years ago, and our price was almost 40% higher! Even the salesperson was surprised and dug deeper into the details, but it was correct. In fact, some of the key components they sourced had increased by 150%. Another supplier increased their base elevator price this week by 75%! It should not be a great surprise, however, as steel prices have soared in the last 2 years and elevators are made primarily of steel.
4 Reasons you Need to Pull the Trigger on your New Elevator Project Now:
As a salesperson, these are really challenging times. I personally, and Elevator One, have always committed to showing integrity in all our dealings, beginning with sales, and I hate to pressure or scare people into buying, but I’m conflicted as I feel we would be providing a disservice to our current and potential customers if we don’t recommend pulling the trigger now, for the following reasons:
- Price Escalation: While holding prices in the past for a few months was no big deal, we are now challenged to hold them for even 30 days, as our supplier prices are changing every month. US inflation is running at 6.8% (where most materials are coming from) and as mentioned above, steel and other industrial commodities are outpacing that significantly. This is a certainty – your prices will only go up as you wait.
- Project Lead Times: It was not so long ago that our quotes read “2 weeks” to get shop approval drawings. That then changed to “4-6 weeks” and now I have to simply put “6+ weeks”. All elevator manufacturers seem to be challenged with massive production backlogs, so it is difficult to get expedited service on shop approval drawings. Thereafter, equipment lead times that used to be “12-16 weeks” are now “20-24 weeks” or even beyond. When I was a Project Manager in a past position, I quickly learned that the greatest schedule savings are found in the “fuzzy front end” (i.e. the time before orders are placed). Vacuum up your fuzzy front end and save yourself many precious weeks/months that you cannot make up post award.
- Labour Challenges: There is a consistent theme when you speak with any elevator contractor today – “we’re swamped”. We have definitely seen very strong sales in both our modernization and new construction departments, which is of course welcomed, but it means labour crews are tied up on projects well into 2022 already. We have also recently quoted on more projects than ever before, so we see no end to the project backlog. Once again, ordering early may allow you to block out a crew for your project rather than the next project that comes in. While we do not oversell and we designate a crew in our labour schedule for your timelines, customer’s changing construction schedules are a challenge, so getting an order in earlier than later will help secure a crew to fit your timelines.
- Pending New Elevator Code: Ontario has been operating on the 2010 elevator code for over a decade now. This is changing in 2022 as the TSSA has decided to adopt the 2019 code. While most changes will not be significant, there is one very significant change regarding emergency communications. For decades emergency communication has been accomplished through emergency telephones (i.e. telephone in the car which rings to an emergency answering service). The new code is changing requiring 3 ways of communication (i.e. audio, video and some sort of text option). This is a massive change as it requires significant new technology in the elevator car, but it also significantly increases the requirements on the receiving side (in-office). Manufacturers do not yet fully know the magnitude of these changes and the cost implications. The TSSA has not yet finalized implementation plans, but there will be a drop-dead date by probably the summer of 2022, where new projects will require new code compliance. Every new code implementation has some challenges and extra steps as all the parties figure out exactly how to interpret and enforce the new code clauses. This iterative process also adds time to every elevator installation. Order early and avoid the pending cost increase from the new code.
As the person primarily responsible for sales at Elevator One, I can’t pretend to be unbiased. Full disclosure, I have a vested interested in expediting sales. Having said that, we’ve been very successful as an elevator company for over 27 years by being as transparent as possible, and giving the straight goods, even where that has resulted in us losing a sale. So, understanding the risk of losing a sale, if you’re sitting on a pending project, do everything possible to expedite the process of placing orders for your elevators. As everyone knows, elevators are one of the keys to getting occupancy, and the above risks are ones you can mitigate if you move sooner than later. Feel free to reach out to me if you have any specific questions on any of the above: firstname.lastname@example.org.
Sales & Marketing Manager
Rolly has been in the elevator industry for over 20 years in both a sales role and running an Operations Department. He works hard to help implement methods to provide superior service to Elevator One clients.