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Why the product shortages?

Stacey K

Stacey K

I like making signs
rjssigns said:
Supply shortages are simple economics:
1)Manufacturers of sign panels, lumber, whatever, shutdown or slowed operations to a crawl laying off workers in the process.
No point paying staff to make product you can't sell.
2)These manufacturers calculated needs based on a nationwide shut down so they didn't buy raw goods.
This plan snaked its way through the supply chain but it was the wrong plan.
3) Stockpiles of raw materials and finished goods were depleted.
4) Now there is a rush to "refill" the supply pipeline.

Issue here is two fold. First is people being paid more to stay home.
Second is these supply chains are absolutely massive. Even if it was as simple as flipping a switch it can takes weeks or months to get back to a normal schedule.
Once back in production you have to fill all the backorders with limited raw materials and staff.

From a business perspective I find all of this fascin
Click to expand...
Completely off subject...the spreadsheet idea grew on me and now I'm using it daily and I love it! I'm adding drop downs, etc. as I go and things pop up. Thanks for the idea!
 
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ikarasu

Active Member
It's not just shortage of labor causing the shortages... It's everything.

How is your guys aluminum supply? We were told boats getting out of China are so delayed right now. I ordered a skid a month ago and it's due to arrive mid June. At the same time I ordered a skid from our secondary supplier... Due to arrive end of June. Called every supplier we know of, no one has sign grade aluminum... We found one shop that just got a shipment of 6 skids in... Bought 3 of them. So now we have $24,000 tied up in material on hand and another $16,000 for June coming in... A few of our trade partners have called asking if we knew where to get any...almost every ship we know of is being picky on what jobs they accept because between the vinyl and the aluminum, there just isn't enough material to go around.

But aluminum is 90% of our work. If we run out.... 15 people in the shop have nothing to do. So we hoarde it... I'm trying to keep 2 extra skids on hand to tide us over for any future shortages.

Same with 180... I've got 12 rolls of 180/8518 sitting upstairs (it's allocated to all the kiosk wraps we have on the books in the next 2 months)

But all the stuff we've had to pre buy and hold onto because of the shortages... We're probably close to $75-100,000 in materials we don't normally have so much stock on.

Then we got a call from our 3m rep... 1170c is 1 month out so we should stock up on it. Sometimes we go through 2 rolls a month... Sometimes 20... So what do we do, spend another 20k on overlam? On-top of it we got an email from our suppliers saying 3m is jacking up the prices 9-15% due to supply issues. I bet it never goes back down either!

More and more stuff is getting harder to buy. I don't care why it's this way, but hopefully it gets better soon. I hate carrying so much inventory... And it's not even my money in spending on it
 
U

unclebun

Active Member
ikarasu said:
It's not just shortage of labor causing the shortages... It's everything.

How is your guys aluminum supply? We were told boats getting out of China are so delayed right now. I ordered a skid a month ago and it's due to arrive mid June. At the same time I ordered a skid from our secondary supplier... Due to arrive end of June. Called every supplier we know of, no one has sign grade aluminum... We found one shop that just got a shipment of 6 skids in... Bought 3 of them. So now we have $24,000 tied up in material on hand and another $16,000 for June coming in... A few of our trade partners have called asking if we knew where to get any...almost every ship we know of is being picky on what jobs they accept because between the vinyl and the aluminum, there just isn't enough material to go around.

But aluminum is 90% of our work. If we run out.... 15 people in the shop have nothing to do. So we hoarde it... I'm trying to keep 2 extra skids on hand to tide us over for any future shortages.

Same with 180... I've got 12 rolls of 180/8518 sitting upstairs (it's allocated to all the kiosk wraps we have on the books in the next 2 months)

But all the stuff we've had to pre buy and hold onto because of the shortages... We're probably close to $75-100,000 in materials we don't normally have so much stock on.

Then we got a call from our 3m rep... 1170c is 1 month out so we should stock up on it. Sometimes we go through 2 rolls a month... Sometimes 20... So what do we do, spend another 20k on overlam? On-top of it we got an email from our suppliers saying 3m is jacking up the prices 9-15% due to supply issues. I bet it never goes back down either!

More and more stuff is getting harder to buy. I don't care why it's this way, but hopefully it gets better soon. I hate carrying so much inventory... And it's not even my money in spending on it
Click to expand...
This is why there are shortages. Hoarding.
 
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ikarasu

Active Member
unclebun said:
This is why there are shortages. Hoarding.
Click to expand...
If a product takes a month to get in, how is buying a month supply hoarding?

You don't buy enough produ t to last two weeks then delay all jobs 2 weeks while waiting for material to get in, that's just bad business.
 
Gino

Gino

Premium Subscriber
Back in the 70's I did roll my own, so to speak. A friend of mine had all that stuff set up in a special room. Only thing made it special was, I hand painted a sign for on the door that said NO SMOKING. Once a month we'd spend a weekend doing just that. But...... that was more than 45 years ago. Now, I'm lazy. I just buy it. Have close to 11 or 12,000 rounds. I just counted it the other weekend.
 
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unclebun

Active Member
Hoarding is when people buy ahead based on hearing that there will be shortages. A small example is that I take care of the pool for our condo HOA. About a month ago, some out of town homeowners from cities which are still not out of lockdown started emailing on the HOA email list about chlorine shortages they'd heard about and we'd better buy ahead. I knew it was no problem, but they persisted, so the treasurer/secretary called me. I told him we already have enough chlorine for the whole summer because we only use one large bucket a year and I'd bought one last fall when we were getting low, but I still hadn't used up the one from the previous year, and had not opened the new one. But the next day he emailed that he'd bought two buckets from a friend who owns a pool supply in Chicago who kept telling him about the chlorine shortage. So now we have more than a three year supply on hand. To what avail?

Meanwhile, I talked to our local pool company who said that even though they've had some of their larger clients (big hotels, etc.) buy their whole year supply at once instead of month by month, they still have more than enough in their warehouse for what all their customers will use in a year. But if people rush in and buy an "extra bucket just in case", then there won't be enough to go around.
 
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