“There is a Downside In all places” For Small Companies too – CBS Pittsburgh

(((CBS Baltimore) – Why are the shelves in the local grocery store always partially empty? Why is delivery taking much longer than before? Why is everything more expensive? The simple answer is supply chain. The long answer isn’t that simple.

Needless to say, the one-off COVID pandemic is exacerbating existing problems. These included a shortage of manpower on the way from the factory to the consumer’s entrance for the products and multiple systems that rely on punctuality to function as the demand for these products increased significantly. Will cause a bottleneck.

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Even its more complex explanations don’t fully explain why consumers can’t buy what they want when they want it. That’s because there are no easy answers or easy fixes.

What is a supply chain?

The supply chain consists of a series of steps to deliver a product to a customer. Martin DresdnerThe professor and chairman of the RH Smith School of Business at the University of Maryland, professor and chairman of the department for logistics, economics and public policy, described this as “originating with the end customer”.

A network of specific companies can start with suppliers of raw materials and other inputs and include shipping these supplies to manufacturing facilities. When the input is converted into a finished product, it is transported to a warehouse or store and finally to the end customer. Various agents, brokers, sellers, freight forwarders, and distribution centers can play an important role in ensuring that products are manufactured and reach their final destinations.

The supply chain of large companies can become complex very quickly. Dresdner is an example of a typical packaging company and explains how complex it is. “Manufacturers of packaged goods have many suppliers who provide the raw materials used in the production process, which can be farmers or which farmers can sell through dealers or manufacturers. There may be other component suppliers as the products they use may be made in-house.

“We consider suppliers who sell directly to Procter & Gamble or Kellogg as first class suppliers,” he continues. “But there are people who supply it and we would call them secondary suppliers. There are also third and four tier suppliers that go back to the place where the product components were created. The manufacturers also do not carry out the entire production themselves. They do some manufacturing. These contract manufacturers are the best packaged manufacturers. They are also suppliers and have their own supply chain. “

When a product is manufactured, it has to find its way to the consumer.

“Manufacturers often don’t sell directly to their customers, but rather through distributors,” explains Dresdner. “Dealers can sell to retailers and manufacturers can sell directly to retailers. Other companies may be involved in the sale and distribution of products. Agents or brokers, there may be vans. There are all types of companies that need to be involved in delivering the product to the end user. All of these companies are in the focus farm, the supply chain of the packaged product manufacturer. It’s a part. “

So many steps along the way leave many opportunities to slow down. And those slowdowns overlap and add to business delays.

Several factors exacerbate the problem

Now imagine that every company that makes and / or sells physical products has its own supply chain. Some are more complex and some are less complex. However, there are some basic elements that they all have in common. And they all use the same regional, national, and global systems to (hopefully) get products to consumers on time. This wider global commodity pipeline is a “supply chain” that gathers all the headlines about the delays and price hikes it causes.

500,000 Freight Ships Shipping Containers The ports of Los Angeles and Long Beach are full of goods from various Asian countries. Lack of truck drivers Prevents these cargoes from leaving the port in good time during unloading. Where trucks bring goods to the next section of the journey, they are secured in containers and wait for further shipments. This also blocks trains. If these goods arrive in the warehouse in any way, a shortage of manpower limits on-time processing. And as if that weren’t enough United States Postal Service recently the delivery time was delayed.

The COVID pandemic is certainly due to this chain of problems in the supply chain. But that’s not the only cause.

Global Microchip Shortage, Texas Winter Storm Impacts domestic production and delays the production of automobiles and various electronic devices. China, which produces many consumer goods for the United States, Ongoing energy crisis It is reducing production. In addition, manufacturers in many other countries with low vaccination rates have endured the stoppages and labor shortages caused by the Delta subspecies epidemic.

A small business suffers from major supply chain problems

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NS Unemployed Philosopher’s Guild (UPG) is one of many companies that solves supply chain problems that affect the entire market. A Brooklyn-based gift company specializes in creating and selling smart and fun gifts for smart and fun people.

Celebrity finger puppets, magnetic personality, according to UPG sales manager Trudi Bartow, is one of the most popular gifts. Current bestsellers include former Supreme Court Justice Ruth Bader Ginsburg, former painter and television presenter Bob Ross, and President Biden’s Chief Medical Officer Anthony Fauci.

“We work with manufacturers to physically manufacture their products,” says Bartow. “We can say that 65% of our products are made overseas, which is a little different than if they were made in the US. Most of today’s supply chain problems are overseas, so that’s it. Focus. Once the manufacturer makes the product, load it into a container and load the container into a boat. Send the ship to the United States. Go to the port. Unloading from the boat. The container is on the rail. Placed on top. The rail goes to our warehouse. Our warehouse takes the container, puts everything on the shelves, marks everything in stock and puts it in a physical store or an online shop. It sells to, but it doesn’t matter. And the product is taken from the warehouse, loaded onto a truck, delivered to a store, and then physically placed on the store’s shelves for someone to come in. You can remove it and buy it, or you can buy it from the online store and then it will be sent to them. “

These finger puppets, like many other UPG products and merchandise, generally take a long time to reach the market across the market. “We’re not as unique as gift and product manufacturers,” says Bartow. “There are some problems in the whole process, in the whole supply chain … there are problems everywhere.”

Where is the problem?

The United States is the largest economy in the world, with consumer purchases accounting for more than two-thirds of economic activity. Some of these purchases include services such as dry cleaning and luxury hotel stays. Some of those purchases are merchandise that can range from Anthony Fauci’s finger puppets to a $ 45,000 SUV. Around 90 percent of the goods produced travel across the ocean to reach consumers. For a magnetic finger puppet to be displayed in your neighbor’s refrigerator, the journey begins along with thousands of other small finger puppets in a manufacturing facility in China.

And the production line is likely to have problems. Bartow says, “You can start in a foreign factory, which increases the cost of goods, especially the electricity bill for the Chinese power grid. In case of COVID, the warehouse will be closed during cleaning. Stopping there caused a delay. “

Once this little Anthony Fauci is created, he’ll have to find a way to the port where boats can transport him across the Pacific. “It is difficult to get a container into a port because there is a physical shortage of drivers everywhere due to the backlog,” explains Bartow. “Then the things rest for a long time in the harbor because of the delays between the sailors and the boat. So instead of sitting for a week or two now, there are a couple of weeks to wait for a reservation. You can sit too. A reservation also leads to further delays for the dock workers to get their luggage onto the boat. “

The time when Anthony Fauci’s finger puppets cross the sea has not changed. But he has time to embark on the next journey of the journey. “For example, we have now arrived in a port in LA,” continues Bartow. “And because of the long queues at the port of LA, it can take several weeks instead of a week to get off and off. Again, these are all restrictions in the supply chain. Dock There aren’t enough workers. The dock workers there are under security restrictions. There is a COVID shutdown. Depending on the working hours, there is an extension or reduction of the time. Therefore a delay is added. “

Eventually, Anthony Fauci’s finger puppets and all of his finger puppet friends go to the Los Angeles Harbor and get off the boat. However, the delay continues. “I have a driver shortage. There aren’t enough trucks. There aren’t enough physical containers to move things around. “

After a long expedition from the port, finger puppets arrive at the warehouse. “Warehouses are exposed to the same hurdles as everywhere,” emphasizes Bartow. “A shortage of labor leads to a shortage of packaging. Containers can be left outside the warehouse for 1-3 weeks. “

But the journey is not over yet. When an online or physical retailer orders 100 Magnetic Personalities from Anthony Fauci, the box is sent to the store. Customers can buy finger puppets there directly or online. At this point, the US postal system takes over. NS United States Postal Service Delayed delivery to reduce costs. The inevitable consequences for consumers will be a major delay in the final trip of their finger puppet trip.

Due to problems throughout the supply chain, consumers experience a multitude of product shortages, rising prices and supply conflicts across the economy. While manufacturers are trying, it could mean Northern California wine is sourcing a bottle and label paper at grocery stores because retailers are struggling to stock shelves. That may mean artificial Christmas trees and decorations are currently stuck in ports across the country.

Not all supply chain problems herald the next holiday season. A potential gift is likely to be a significant delay crossing the ocean, passing ports, and slowly moving to warehouses and shops along highways and railroad tracks.

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So if you want to give away Anthony Fauci’s finger puppets to remind your friends and loved ones to wear a mask, it is advisable to order early.

“There’s a Problem Everywhere” For Small Businesses too – CBS Pittsburgh

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