FLETCHER, NC—For Lauren Rash, it’s the little things that have curtailed production like the many shades of black Velcro here at her tent factory.
His company, Diamond Brands, launched a new line of high-end wall tents called the Liminal, which was thick with the vents and fasteners sought by discerning campers. But that means using a lot of Velcro. And that’s a problem, because black Velcro comes in many colors, depending on the type of raw plastic resin used to make it.
“If I have the old stock and put it in with the new,” the colors won’t match, Rash said. “Black is not black not black.”
Prior to supply chain breakdowns and shortages worldwide in the wake of the COVID-19 pandemic, buying bits and pieces for an assembly line was often as simple as clicking a button and waiting a few days or, at most, a few weeks for delivery. Was. .
Shortage of metals, plastics, wood and even wine bottles has become common now.
The result is a world where buyers must wait for delivery of items that were once plentiful, if they can get them at all. Rash has stacks of tents she can’t ship because she can’t find the right aluminum tubing for her frame, for example, while others lack the right zippers.
The shortage is accompanied by huge price increases, which has fueled fears of a sustained inflationary wave.
Tensions are rising among Federal Reserve policymakers over how to measure the long-term impact on prices. Some Fed policymakers are more confident than others that price pressures will ease once some of the supply chain disruptions are resolved. How this debate develops could affect how quickly the Fed moves to reduce the pace of asset purchases initiated at the start of the pandemic, and how quickly it will lower the policy interest rate from its current level to zero. gets closer.
Rash and other local producers were recently part of a broader forum with Richmond Fed Chairman Tom Barkin, focusing on the challenges to the US recovery posed by supply chain issues, which are causing policymakers to move faster than expected. were not resolved.
There is a shortage of everything from bulldozers to bourbon. Heavy equipment manufacturer Caterpillar Inc. In July, the company had warned that its profits would suffer to some extent in the current quarter due to rising prices of hard-to-find components. The company said, among other things, it is exploring ways to source supplies from non-conventional sources to address the shortage of plastic resins and semiconductors.
Lawson Whiting, chief executive of spirits producer Brown-Forman Corp., told investors earlier this month that a lack of “key packaging materials, especially glass” is causing problems for the maker of brands like Jack Daniels and Woodford Reserve.
New challenges continue to arise at US oil refineries, including storm blockages, which again threaten supplies of plastics and other basic materials.
Some industries are rushing to build new factories, including semiconductor producers, under pressure to feed a growing appetite for chips needed in cars and electronics. But not all growers are eager to build new plants. For example, the bike industry is heavily concentrated in Asia and producers there worry that the current surge in demand is only temporary.
“Asian factories have seen this time and time again,” said Brent Graves, CEO of Cane Creek Cycling Components, another small manufacturer in Fletcher, NC, which relies heavily on Asian suppliers for bike parts. “They say, ‘Okay, we’ll do some extra overtime.’ But overall they are reluctant to do so in terms of crude investment in facilities.”
The current problem complicates the shutdown of supply lines. With so many manufacturers rushing to manufacture supplies at the same time, the containers, ships, and trucks needed to move goods are often not available, and costs add up when they are. This has disrupted some of the mechanisms that normally help keep supply and prices under control.
David Reilly, president of United Solutions, a plastics maker in Leminster, Mass., said rising resin prices — he estimates they’re up 100 percent for some types in the past year — is his biggest challenge.
He generally scoured foreign markets, including China, for resins cheaper than his buyers.
“But we can’t do that,” he said, because shipping prices have gone up so much that they wipe out any price advantage. “Right now, growers in North America don’t have the tough competition that they would if container prices came back.”
Back at the tent factory, Rash said his approach to the problem had undone years of work making his factory more “lean”. That said, a tent requires 48 different parts, and while you can’t depend on getting all those items, stock up on what you can—those in the corners of the factory. appears.
Moving through a maze of shelving, she breaks a galvanized steel tube. “I got a hundred of it which is fine. I’ll go through it,” she said. “But the two (tube sizes) I’m on backorder I can’t find.”
By Howard Schneider and Timothy Appel
This News Originally From – The Epoch Times