Reasons For Supply Chain Challenges
Players in all facets of the cleaning industry long for simpler times when supplies could be ordered instantaneously — with a reasonable arrival date and price. The start and ongoing impact of the COVID-19 pandemic, however, has complicated each step of the supply chain process and may not get better any time soon. To better understand the key reasons behind supply chain disruption, Keith Schneringer, Director of Merchandising + Sustainability for WAXIE took a deep dive into a handful of notable culprits. The following is a condensed version of the findings, for the entire report, click here.
Raw Materials — Disruptions and Shortages
Contrary to popular belief, the initial response of manufacturing plants at the start of the pandemic was commendable. While ordering rates were up, there was a shortlist of difference products being ordered which made it easier for plants to adapt and meet the uprise in demand. With the global economy now kicking back into gear more and more, the issue now is the uptick in variety of products being produced, as well as the regions where the demand is back up again. Products that require higher amounts of metals, plastic and paper are now experiencing an uptick in demand for many areas where the manufacturing capacity and or raw resources can’t be accrued at the same rate as demand. Computer chips, which are essential for anything from automobiles to tobacco products, are having its demand dissected into every industry imaginable.
In instances where the manufacturing facilities are capable and resources are on-hand, the next hurdle is finding the necessary labor to perform the manufacturing and distribution tasks. There’s no secret about the difficulties hiring in the current pandemic landscape. From child care obligations as facilities remain closed, to federal jobless benefits sometimes outweighing the benefits of a job, the ability and incentive for quality employees continues to be a concern.
Transportation and Logistical Hurdles
By the time April 2020 rolled around, international trade was nearly nonexistent, which meant empty containers for shipping were less commonly in motion to transport goods (and as a result, fewer shipping containers to then re-fill with other goods). A lack of available shipping containers was coupled with ‘transportation bottlenecks’, meaning wait times to unload cargo were elevated. Going back to labor shortages, fewer employees meant fewer truck drivers and loading dock employees, increasing the prices of shipments and estimated arrival times.
When the prices for materials are near an all-time high and packaging/labor help is scarce, then the overall cost to ship products will inevitably be higher. In a balancing act, manufacturers often have no other choice but to raise prices themselves in order to accommodate. With wholesale distribution as a whole being intertwined with cleaning supplies, the success of one component will be largely contingent on the other.
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