You asked €“ I think embedded your question, Chris, was kind of line of sight, how are we operating from a supply chain visibility perspective. If you go back a quarter ago or two quarters ago, and I think we highlighted this on the call, certainly talked about it in our one-on-ones, we were largely hand to mouth. And so we didn’t have a predictable supply of components from our suppliers. They weren’t delivering to their committed dates or in the quantities that they committed. And so we were hand-to-mouth trying to keep the production lines running. In some cases, on some lines, we are still hand-to-mouth, but that has gone down. The number of lines of our hand to mouth has decreased, and we’ve gained better visibility to the supply of parts that we need for, let’s say, the next month and so rather than being hand to mouth across the majority of our lines.
Now we’ve got some visibility across the coming months and are reasonable confident we will receive the parts as they were committed from our suppliers. And I think the other thing we see is more predictability, better predictability from our supply base, where in the past, middle 2022, we were dealing with suppliers have committed and then didn’t deliver on time or in the quantity we expected. We’re still seeing some impredictability but it seems to be improving from a predictability standpoint. Again, not getting all the parts we need as fast as we like, but becoming more predictable. That’s why I would characterize this more as stability than kind of a trajectory of recovery yet. When you think about recovery from €“ purely from a supply chain perspective, we think that it will be €“ continue to be choppy.
We think that while we can take actions to overcome some of the challenges and have positive impacts, we are still seeing ad hoc disruptions caused by suppliers with whatever the cause is, whether they have a lack of labor or they have challenges upstream. We are still seeing sort of ad hoc challenges we are having to manage an elevated number of suppliers to make sure that they can meet our requirements. So net-net, I would say we’re stabilizing, and we expect to be on a path to recovery, but we don’t line of sight to it yet.
Chris Moore: Got it. Extremely helpful. Thank you for that. So it looks like you guys have done a really good job kind of managing S&A while things have been kind of up and down. It feels like I’m just wondering if this level might necessarily be sustainable moving forward. I mean I think it was 28% of revenue in 2022. That’s quite a bit lower than where you had been a couple of years back. Just wondering from an S&A standpoint, moving forward, are there some costs that could come back in there in €˜23 or just kind of how you’re looking at it?
Fay West: So the way that I would characterize it is we are challenging ourselves daily on how to best operate the company, including managing our cost on the S&A line. And we saw significant improvement year-over-year. In our anticipated 2023 guidance, we’ve corrected for a certain number of things like travel, which is opening up or the reversion back to certain kind of compensation and other areas. But in general, our goal is to manage our S&A appropriately and to manage it to a percentage of sales. And I think what we achieved in the realm of achievement in 2023.
Dave Huml: Chris, I would just add, I think we’ve demonstrated over time and certainly in 2022 that we can manage S&A accordingly to how the business is performing. We took decisive actions throughout the year to deliver the results that we were able to and some of those around the S&A side. I will tell you coming through Q4 and into 2023, we are going to be very cautious with our S&A spend to make sure that we don’t get ahead of ourselves before the business is signaling that we can afford the incremental investments.
