The impact of the pandemic on manufacturing has led to disruptions in the supply chain causing many companies to rethink their manufacturing process and dependency on foreign materials.
The Impact of the Pandemic on Manufacturing
October 2021 | 10 minute read
A focus on two areas of impact of the pandemic on manufacturing; Supply chain and labor shortage
Traveling down your grocery store isles, with your squeaky cart and list in hand, you might start noticing some of your items still aren’t on the shelves.
Even 18 months after the panic buying frenzy, many items still haven’t graced the shelves with their pre-pandemic splendor, and it is growing new concerns over shortages.
As post-pandemic shopping has increased, post-pandemic product availability has decreased, and consumers are taking notice.
Shortages of canned goods, pasta and even some popular sports drinks like Gatorade are causing some shoppers’ concerns.
If disruptions in our lives from the pandemic, horrendous fires, Killer bees, and Cycads weren’t scary enough, now we’re facing Christmas gift shortages.
This Christmas gift shortage is leading to a panic buy shopping frenzy, and product availablity anxiety this holiday season.
Because of delays with shipping and manufacturing, the need to buy sooner and in more abundance is causing an influx in consumer spending and heavier shipping needs.
Companies are also taking notice and starting to order items as far as six months out in concern over increased shipping delays.
Two areas where the impact of the pandemic is mostly affecting manufacturing – Supply chain and shipping.
As a manufacturing company ourselves, we understand the tug of war consumers are facing.
From backlogs to products simply no longer being produced, Americans are learning the true nature of what it means to be dependent on foreign nations for products.
This can make it more tempting to panic buy or order in advance.
I wanted to take a closer look at where the shortage is coming from. What is causing the current delays and how companies like ours, are helping customers shop American Made and keep our industries and business alive.
What is causing manufacturing delays?
We all watched the tiny excavator try to pull that giant cargo ship from the Suez Canal. This is a great analogy to think about labor shortages to the massive need for goods currently.
The impact of the pandemic is delaying the manufacturing of goods.
Goods are still being made every day, but the impact is more on the delay of goods.
For example, a major delay for the automobile industry is chips for cars. Many new cars require a semiconductor chip that helps in parts such as touchscreens. These silicon chips are in most new cars and one car part could use up to 1,500 chips dependent on the complexity of that part.
These chips aren’t only in automobiles, but most current electronics,
Automobile makers became reliant on other countries to produce these chips, and because of the delay in obtaining these parts, some automobile makers have halted new car production or have a backlog of new cars waiting to hit the market.
This is one example, but almost every industry is facing some sort of supply chain delay.
Once chips and other items that were causing delay finally reach manufacturers, manufacturing can be completed, and many items like cars, electronics, toys ect. can be shipped out to what is currently the largest parking lot in the world, shipping harbors.
What’s causing issues in the harbors?
It’s a circle of life for products. Manufacturers produce, products ship, truckers transport, employees shelve, customer purchase. The delay in obtaining all the parts is just the first hurdle. This impact from the pandemic on manufacturing is also an impact on labor shortages.
Right now thousands of shipping containers sit in the harbor in California and in some of the world’s largest ports waiting for workers to unpack, truckers to truck, and employees to put on items shelves, which in turn customers cannot purchase.
The labor shortage is affecting manufacturing.
The issue, originally, was COVID. Many employers staggered staff to prevent Covid infection. Social distancing requirements started slowing production, causing a backlog.
Plus, the hundreds of thousands of people who were infected with the virus and had to quarantine. And for some companies, employees were let go because lack of business.
This got some employees rethinking their career plans and how they wanted to navigate this crisis. The labor shortage is just another impact of the pandemic on manufacturing.
Where are all the employees?
Trucking is a hard-hit industry currently. This is causing another hurdle in the supply chain.
According to Trucker Life “drivers are leaving the industry and searching for jobs that offer better pay, benefits and working conditions.”
Many employees in the blue-collar “essential” job sector have decided to reconsider their employment options.
In our state of Colorado, some people are choosing to find new careers because of the COVID pandemic, child-related expenses with daycare due to a change in employment, or even school closures.
Many essential workers have been overworked and offering ridiculously small “hazard pay” bonuses for their commitment to keeping the country running, didn’t encourage most to stay in those positions.
The impact from the pandemic on manufacturing – Supply Chains
It seems panic buying a going to be a new way of life for us. Not only are moms and dads worried about Christmas gifts, but major companies aren’t sidelining either.
More companies are ordering months ahead of needs, causing an even heavier load on shipping and the employees. Referring back to the Suez Canal and the tiny excavator trying to free it from its clog, that is a good way to look at the current situation with the supply chain.
In a related article from Insider on “ Why Store Shelves are empty and supply chain crises,” they talk to former US trade negotiator Harry Broadman about this issue.
“From an economic perspective, it’s sort of like a game of musical chairs,” former US trade negotiator Harry Broadman told Insider, pointing to efforts in the US to compete with 24/7 operations at Asian ports. “The world economy is out of sync because parts of it were forced to go offline when the pandemic started and getting all the industry players back in line at the same time is near impossible.”
While researching for this article, I came across more information from Business Insider when they spoke with Tony Pelli, Practice Director of Security & Resilience at BSI
“All parts of the supply chain, most of which are built on ‘lean’ principles (no slack, little redundancy, from truck drivers to inventory in warehouses), were not prepared for this increase,” Tony Pelli, Practice Director of Security & Resilience at BSI, told Insider. “While consumer demand can increase in a matter of months, it takes more time to increase port capacity, build warehouses, hire employees, etc., to meet that demand.”
Because of labor shortages, many ports and warehouses are dealing with a growing demand for products on top of a substantial decrease in employees.
Many companies offer incentives and hiring bonuses to help encourage applicants, and some companies wonder if new COVID vaccine mandates can offer safer working environments and entice employees to return.
The U.S Government is also trying to make an impact on our supply chain issues. Our government has created the Supply Chain Resiliency Act to help decrease our dependency on foreign materials offering grants to manufacturing companies during this time.
In a press release from Representative Malinowski (D-NJ) it reads
“The United States is dealing with unprecedented supply chain challenges, and we must take action. Today, I’m pleased to join my colleagues Reps. Malinowski and Blunt Rochester in leading the Building Resilient Supply Chains Act, and I’m proud of the bipartisan work that has been done so far on this critical issue,” said Representative Kinzinger (R-IL).
Many manufacturing companies are hopeful and seeing some success with the pass of this legislation offering more manufacturing options and incentives can help some employees return.
Foreign Dependency and American Made
China took over as the leader in world manufacturing in 2010, which is now providing more than 28% of global manufacturing output.
Which if hindsight would have been 2020, we could have averted a global shortage by maybe more companies opting for manufacturers closer to home to elevate some of the hurdles companies are facing.
Using local companies can help businesses community to produce without heavy delay. At Precise Cast, we have been serving companies for the last 20 plus years from our central US location in Denver, Colorado. Our access gives us nationwide reach and our manufactured parts are created in-house with our non-ferrous foundry and CNC Machine shop.
The Alliance for American Companies has been showcasing and supporting American-made for years and is a great resource to learn more information and find companies that you can work with.
The impact of the pandemic on manufacturing- when will this end?
There is no definite answer. But we can ease the pain by using local companies and making a strong effort to buy American Made. Alliance for American manufacturing and Made in America movement can help connect you to.
And for companies looking to release their dependency on foreign manufacturers talk with our expert team and see if our resources can help ease delay in manufacturing for your company. With our central location, we still can provide fast delivery options and outstanding prototype and low-volume production parts.