CHICAGO — David Bernstein, executive director of CSCNetwork, a resource for independent laundry and linen services, says that pandemic-induced challenges in the global supply chain continue as the world works to recover from COVID-19.
Entire sectors of the global economy—manufacturing, transportation, logistics and energy, just to name a few—are being strained beyond their limits.
“Under normal circumstances, disruption in any one of these sectors could cause temporary ripples in global markets, but when they occur simultaneously it creates a perfect storm,” Bernstein points out.
CSCNetwork hosted the webinar “The Perfect Storm: Managing Supply Chain Risks in 2021,” reviewing what caused the crisis, how long experts expect it to last, strategies and tactics to help with supply-chain planning, sourcing, and procurement, and what laundry-industry professionals can do in the long term to protect their businesses.
Bernstein moderated the webinar panel, which consisted of American Dawn’s Jeff Landry, director of global solutions, and Steve Kallenbach, director of market solutions; Jon Wynkoop, CFO of Gurtler Industries Inc.; Jeremy Lott, president of SanMar Corp.; and Ty Acton, president of Tingue.
This installment concludes the discussion about the participants’ greatest challenges and solutions to help laundry operators.
BIGGEST PROBLEMS, STRATEGIES (CONCLUSION)
BERNSTEIN: Ty, what would you say is, of these issues, your biggest issue? And again, what advice do you have?
ACTON: For us, it’s labor. Supply-chain issues and late and shortages of supplies are certainly a challenge, but for us, it’s labor.
We manufacture a lot of things that we send out custom-cut and sew-and-fit, so it’s a challenge. We’ve got a sales manager going in next week to help in the belting department. We’re pulling supervisors who are not really coaching, they’re actually processing work.
We paused our 401K match during the height of COVID, and we’ve reinstated that. We’re using ZipRecruiter, Indeed, LinkedIn and our local chamber of commerce is helping where they can. We’re paying thousand-dollar employee referrals, half at 30 days and the other half at 120 days—if the referral remains with the organization. In some cases, we can’t get people to apply.
As Steve alluded to, he’s so right, educating our customers and really educating our field reps to let the customer know to go ahead and order it at the first sign of fraying belts or cover wear or anything that you see that may pose a problem. Go ahead and get it on order because it may be three or four weeks before you get it. And if you wait too long, it’s better to have it and not need it than need it and not have it.
BERNSTEIN: John, what would you say of these is No. 1 for you, and again, same question, what advice do you have for your customers and their end-users?
WYNKOOP: Probably the biggest thing is product availability for us, as we were just talking. It would be nice to be able to build up a lot of supply in our warehouses and therefore have it available for everybody, but just sometimes things are going in and out still.
Unfortunately, since things are on assignment, we just get dribbles and drabs, just enough to make sure that we’re providing enough products to our customers but difficult really to try to get ahead.
I would say probably the biggest thing that our customers could assist in is really be prudent and purchase what you need and let’s not get back into the situation we had where toilet paper was being hoarded and things like that. There’s no reason to do that.
The supply chain, at least from our standpoint, is going to be adequate as long as things don’t go into crisis mode trying to stock up. So what we’re doing on our end is we’re ensuring that we don’t overstock at any of our distribution points. We don’t overstock in any of our consignment and inventory situations. We’re trying to really manage how we’re sending these products out.
And I think, inevitably, everyone’s going to have to allow for delays in freight. And be sure to have enough for a backup because if you tell us ship in a week and we arrange for a carrier and you’re going to run out in a week, that’s kind of a recipe for disaster. The carrier may not show up at our end or may be delayed in delivering at your end.
If you’re going to be running out that day, that kind of gets that crisis-mode view in a very quick fashion. It’s better to plan ahead a little bit and don’t stock up but just make sure you have enough inventory.
I think what Steve said, the messaging is really everything, and I think it’s important to make sure that everybody understands the implications of the supply chain and how that’s going to affect them.
BERNSTEIN: I’m going to ask each of you to sort of stare into your crystal ball. How long do you foresee this going on? When will the storm clouds clear and the sky turn blue? Jeff, what are your thoughts?
LANDRY: I think we’re looking at early 2022 to some return of normalcy. If there are no other major impacts, you know, any major COVID outbreaks, major transportation issues, major fuel issues, so if everything remains constant, we’re probably looking at is some gradual improvement as we go through the year to whatever the new normal will be.
LOTT: I’d probably echo Jeff’s sentiment. I think it’s end of Q1 2022 to Q2, at least from what we can see it. We have to not only buy inventory to support sales but buy inventory to support getting back to a more normalized level. Doing that in a time where there are yarn shortages and other things, it’s just going to take time.
So, I think we have another, you know, maybe not quite 12 months, but close to that. It’s going to be challenging.
KALLENBACH: I would say that COVID bit us pretty hard, but it’s not going to win. We’re better than that as a country and as a people and as a world, so I just encourage everybody to look at this adversity and just get better.
Be strong, get agile. Enjoy the new abnormal ride and believe you’ll win. We’re going to make it.
WYNKOOP: I would just say from my chemical world perspective, I know that we are going to continue pretty much where we are today, and I’m hearing some rumblings that things will be starting to ease up. In other words, supply will start catching up with demand, so maybe that’s a good sign for heading into 2022. If nothing else happens, I can foresee that.
Demand is strong right now. The industry is strong, but everything is really backed up. It’s just a matter of picking up on the backlog.
BERNSTEIN: Ty, it looks like you get the last word.
ACTON: I think a lot of the recovery is contingent upon the world being vaccinated. A lot of the supply-chain issues are coming from other parts of the world. I know that China developed a vaccine. The data seems to show it’s not quite as effective as the U.S. vaccine. So hopefully, the world gets vaccinated and we all get back to work.
So, I would say into Q2 for supply-chain issues. As far as labor, I think that we will start getting a little more labor, so we’re hopeful as well.
Steve had a great message of encouragement, and, you know, we’re going to come out of this better than ever. It just may take some time.
Click HERE to read Part 1, an overview of supply-chain issues, and HERE for Part 2, the beginning of the panelists’ discussion.