Fender CEO Andy Mooney on worsening supply chain struggles: “Some components that last year cost 30 cents, this year are costing $30”

Fender CEO Andy Mooney has weighed in on supply issues that have plagued the industry since the start of the pandemic, saying that he does not expect those challenges to be resolved anytime soon.

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Discussing the effects of worsening supply pressures on production costs in a new interview with Music Radar, Mooney said, “There’s concern across the board. Some components that last year cost 30 cents, this year are costing $30, so it’s literally making bringing some products to market completely impossible.”

Citing the highly popular Mustang Micro as an example, Mooney added, “We’re going to be challenged to get component parts at the level we’d like going forward. So we’re always trying to pivot to find other suppliers. Internally, we refer it to Whac-A-Mole, because you feel like you’ve just solved one supply chain issue, from a component point of view, and then something else rears its ugly head.”

“So I think we’re going to be facing electronic component shortages at least through 2022, and probably into 2023, maybe even longer.”

That said, the company has put in place several new strategies to cope with exploding demand for guitar gear despite increasing supply pressures: “A new programme we recently communicated to our dealers is a six-month futures programme. If you as a dealer commit your order to us six months in advance you get guaranteed price no matter what happens due to currency or cost pressures, and you get prioritised delivery.”

“During a period of rampant inflation, currency volatility and on-going supply chain challenges, we felt this would be a real benefit to dealers.”

“We’d like to offer guaranteed delivery as well but there’s too many supply chain challenges to honestly commit to that, but certainly prioritised delivery. In exchange, we offer retailers a significant increased margin opportunity. So we’re trying to connect the dots across the supply chain to make it beneficial for the retailer, make it more predictable for us to plan.”