Worcester Coronavirus Pandemic Business Supply Chain Polar Holy Cross
WORCESTER – Not enough containers to store homemade ice cream.
A bicycle shop can’t make repairs because the parts don’t arrive.
And this month, Polar Beverages, one of Worcester’s largest companies, cut its manufacturing schedule to three days in a one-week period – from its normal 24-hour production cycle. 24, 7 days a week because she couldn’t get carbon dioxide and nitrogen to run her business.
“It’s a disaster,” said Chris Crowley, executive vice president of Polar Beverages.
These are just a few of the supply chain disruptions in Worcester caused by the coronavirus pandemic that have left some business owners – and customers – wondering how long this will last.
President Joe Biden announced this month that the Port of Los Angeles would remain open 24 hours a day, so that a huge backlog of product on container ships would be unloaded, put on trucks and shipped throughout. the country.
As part of Biden’s plan, big companies like Walmart, FedEx and UPS will increase shipments overnight.
Meanwhile, prices for consumer products have skyrocketed because there aren’t enough items on store shelves to meet growing demand.
Won’t last forever
“The crisis is not indefinite,” said Lagnajita Chatterjee, assistant professor of commerce at Worcester State University.
Chatterjee, like all market watchers, has no idea how long the supply chain fiasco will last. She lives the experience of waiting weeks – or months – for orders to arrive.
A desk Chatterjee ordered for her apartment didn’t arrive until her education program began at Worcester State.
She improvised by sitting down on her couch, with a stack of books in her lap and a laptop perched on top of the books.
“I was teaching like that for a week or two,” Chatterjee said.
A complicated problem
Supply chain headaches highlight a global economy that is a complex web of interconnected parts. If one breaks down, the whole system collapses, said Victor Matheson, professor of economics at the College of the Holy Cross.
In other words, it’s like a new car, assembled with hundreds of components.
“If part of the supply chain falls apart, you can’t make the car at all,” Matheson said.
Matheson is familiar with the supply chain nightmare. In May, he ordered a bulkhead door to prevent water from entering his home’s basement.
He has not arrived.
At Polar Beverages, the engines and gearboxes the business needs usually arrive within two days. It has been several months now.
“It’s very disruptive and not good for business,” Crowley said.
If the supply chain gets stuck in the mud, Matheson said some companies will delay investing in their people and equipment.
This could mean that a small business is delaying the purchase of new laptops for the sales team. Or a company with a transport fleet does not invest in replacement trucks.
The problem with these scenarios is that nothing lasts forever.
“Eventually everything wears out and you have to bite the bullet,” Matheson said
Good and bad
There is a good and a bad side to difficulties in the supply chain, said Eric Busenburg, president of Euro-American Worldwide Logistics, a Worcester-based company that stocks raw materials and supplies for manufacturers.
The evil is rising inflation and Busenburg gave an example.
The price of a shipping container that Worldwide Logistics buys from a customer for material storage has skyrocketed – $ 2,500 before the pandemic to $ 25,000 today.
This tenfold increase in cost will be passed on to consumers in the form of higher prices. If consumers refuse the shock sticker, some businesses could go bankrupt.
The “relocation” is the good news, said Busenburg. Companies facing manufacturing disruptions due to overseas supply chain issues are relocating, which means they are setting up manufacturing in the states.
The reactor, a bioproduction site on Shrewsbury Street in Worcester, is a prime example, Busenburg said. The demand for space is burning there.
“Much of the life science manufacturing is coming back here and starting in Massachusetts. It doesn’t stop. It’s the tip of the iceberg, ”Busenburg said.
Supply chain stories
Landry’s Bicycles in Worcester did good business during the pandemic, store manager Neil Medin said. One reason could be social distancing, which has made some sports impossible to navigate.
That’s not to say Landry’s was immune to supply chain disruptions. The parts needed for repairs – and new bikes – were hard to come by, so Landry’s took proactive steps to meet the challenge.
Buyers of the company ordered supplies in advance, which created a tight inventory system. Stores in Worcester, Westborough and Natick know exactly what’s available and place orders based on customers’ purchase commitments.
Landry also turned to other suppliers.
“What we’re trying to do during the supply chain problem is we want to keep the cyclists on their bikes,” Medin said.
Supply chain disruptions have not made life easier for Julia Moriconi.
She owns Ms Moriconi’s ice cream in Worcester and made her first sale in July 2020, amid the pandemic.
Artisan, hard ice cream cakes and novelties, that’s how Moriconi described his business. It distributes the product through farmers’ markets, deliveries and catering.
The past month has been a busy selling season and Moriconi was unable to secure some ice cream containers. Either they were out of stock or there were not enough drivers to deliver them.
So Moriconi improvised. She bought a waffle iron and cookie dough, and made ice cream sandwiches that were a hit with customers.
“Labels, containers, spoons, napkins. All you need is a problem, ”Moriconi said.
Especially the containers. There are simply not enough and Moriconi had to withdraw from some farmers’ markets because she did not have containers for her produce.
Its sales forecast for October will be affected by supply chain disruptions – an estimated drop of 66%.
“For a small business, this hits particularly hard,” Moriconi said.
How to solve the supply chain problem
Control of COVID-19 is at the top of the list.
“By far the most important thing,” Matheson said. That means getting the recalcitrant vaccinated and an approved vaccination for children – as well as the public adhering to the mask mandates.
To put low-skilled workers back into the jobs they left during the pandemic, companies will need to carefully consider issues such as wages, benefits and working conditions.
“We are seeing a real shift in the way low-paid workers perceive their role in the economy,” Matheson said. “The workers say they don’t want to come back; that life is too short and you had better do something to increase wages, benefits and working conditions.
Flexibility is key, said Chatterjee of Worcester State.
This means that companies that normally depend on a single supplier of raw materials must look beyond the horizon for additional sources.
They also need to be prepared to quickly switch to another type of manufacturing when the market goes south. A good example, Chatterjee said, is of companies that started making face masks and hand sanitizer early in the pandemic.
There is also what Chatterjee called “predictive technology”.
It describes companies that analyze crisis data to predict consumer behavior. From these predictions, products could be developed for storage during the next pandemic or global disruption.
Matheson of Holy Cross sees this point differently.
From a public health perspective, it is possible to provide for a stockpile of personal protective equipment, ventilators and oxygen, Matheson said.
But when it comes to predicting what consumers will need beyond public health needs, it’s “probably an impossible job,” Matheson added.
“Who would have guessed that there would be huge amounts of flour, cookies, yeast, toilet paper. It’s almost impossible to plan all the individual pieces like that in a reasonable way,” Matheson said.
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Contact Henry Schwan at [email protected] Follow him on Twitter @henrytelegram