With no indication supply chain shortages will ease anytime soon, local manufacturers are planning ahead — way ahead.
Increasing inventory is one way to ease anxiety and save a little money, says Eddie Harris, owner of American Specialty Manufacturing Co., which produces Boss Sauce. For instance, he used to buy one truckload of sugar at a time, but due to price hikes, he now buys three truckloads at once to save money.
“I have to think eight or nine months down the road instead of next week,” Harris says.
In his 40 years running the company, Harris says he has never before experienced such extreme product shortages. Like many business owners, his woes began at the start of the pandemic in March 2020. Over the past two years, shipment delays have gradually worsened, says Harris. The reasons are multifold: A shortage of truck drivers, crops damaged by extreme weather and, due to COVID, too few workers to harvest crops.
Due to scarcity, prices are rising on other products, too, likes boxes and glass.
“You can’t get your supplies, be it dry goods or liquid ingredients,” he says. “And if you’re missing one item, you can’t complete the task.”
Recently, Harris received a half-full truckload of sugar when he had been expecting a full load. He needs the sugar to produce Boss Sauce, which was created from a family recipe.
“The thought of not being able to get your ingredients — it’s a mental pain,” says Harris. “You’re worrying when you’ll get your products. If you don’t know when, you can’t really plan.”
Boss Sauce fans will be relieved to know they can still find the company’s sauces on store shelves.
“I’m a week or two behind, but I’m able to get it out there,” says Harris, adding, “I worry I won’t be able to make it next time.”
The global supply chain was disrupted early in the pandemic when many factories were shut down or forced to reduce production because workers were sick or in lockdown. Warehouses became full, leading to loaded vessels sitting in harbors for days, sometimes weeks, waiting to unload.
At Jason Manufacturing, which produces plastic laminate casework, primarily for the medical and dental fields, some materials are more available than a year ago. Others, like manufactured hardware for slides and hinges, remain scarce.
“It’s certainly been painstaking to get through daily operations,” says Ric Wallenhorst, president of the Rochester company. “We’re constantly on the hunt for materials and products to keep our production moving.”
Delivery delays affect production, turning what would normally be a six-week production schedule into 10 weeks. And customers sometimes must make on-the-fly decisions whether to wait for a particular product to come in or choose one that’s available.
“The bottom line is it’s taking us longer to get materials and we’re turning over less profit,” he says.
Wallenhorst doesn’t foresee relief in the supply chain flow anytime soon.
“I’ve heard some forecasts that it will be up to 24 more months before there is stability in our market,” he says.
But Wallenhorst remains steadfast.
“We’re fortunate enough to be in a market that’s extremely strong, so we’ll get through it,” he says. “It just takes a lot more work to get the same results.”
Andy Germanow is the longtime CEO of Germanow-Simon Corp., which is comprised of two companies: G-S Plastic Optics, which makes precision components for medical devices, and Tel-Tru Manufacturing, a metalworking manufacturer, which produces thermometers and pressure gauges. His grandfather founded the business.
Certain products the company could previously get in two weeks now take several months.
“We buy domestically from the manufacturer, but [delivery] may be impacted by other shipping issues,” says Germanow. “We’re trying to buy some items ahead of time. Some materials are critical to us and if we don’t have them, we can’t do what we need to do to serve our customers.”
For example, at one point the company couldn’t obtain silicon fluid anywhere.
“We had to wait months for a 55-gallon drum of the stuff,” Germanow recalls. And when it finally arrived, he was “astounded” by the price.
Some delays were COVID-related, says Germanow. But he also cites tariffs initiated during the Trump administration for supply chain breakdowns. To reduce the U.S. trade deficits, Trump imposed tariffs from January 2018 to June 2018, initially on solar panels and washing machines and later steel and aluminum from most countries.
To compensate for unpredictable supply shipments, Germanow is amassing a large inventory of certain critical raw materials. The CEO says that company money that used to sit in the bank is now spent on expanded inventory.
His suppliers are facing similar challenges.
“We work with many, many suppliers. They all have their problems too, their own suppliers,” he said. “It’s a classic ripple effect that goes through the economy and impacts everyone.”
Matt McConville Jr. of Faro Industries, Inc. has also grown accustomed to playing the supply chain waiting game. Faro, a plastics manufacturer, makes food containers, medical components, retail displays, automotive trim, electronic parts and other products.
About six months ago, certain plastics once readily available, like polyethylene terephthalate (PET) and PVC, now take “weeks and weeks” to arrive.
“We are having a hard time meeting due dates,” says McConville.
Another product, a flame retardant material, which used to arrive in four weeks, now has a 24-week lead-time.
Last February’s winter ice storm worsened an already tough situation, causing many Texas processing plants to temporarily close, says McConville. Once reopened, they had to play catch up to fulfill orders.
If a product is on backlog, McConville will also ask customers whether if they are willing to substitute if for a material that’s available.
“Most people understand because it’s not just our materials that are harder to come by,” he says.
Like other local manufacturers, McConville needs to plan further ahead than he used to, stockpiling materials.
“It’s the first time I’ve faced these kinds of shortages in my 25 years in the business,” he says. “I don’t see it changing any time soon.
McConville’s costs have risen dramatically the past 12 months — with many raw materials increasing anywhere from 50 percent to 100 percent.
“There are fewer products out there and more people fighting to get it,” he says. “That makes prices go up.”
McConville informs customers when prices change.
“A lot of it is out of our control, but for the most part everyone is pretty understanding,” he says.
The good news: business is brisk.
“That’s the funny part — we have more work than we know what to do with,” says McConville. “Everyone still catching up from COVID.”
Donna Jackel is a Rochester-area freelance writer.