Supply

Strong as its weakest link: Scrambled supply chains portend a disrupted summer |


Remember Building #19?

And Building #19 ½, and Building #19 ¾ and all the rest of the quirky outlets, described in their equally quirky flyers as “our semi-lovely stores?”

They were the brainchild of late local entrepreneur Jerry Ellis, who built a New England retail mini-empire buying what he delicately called “overstocks” from suppliers – whose identity he protected in his advertising — who had guessed wrong about the business basic of supply and demand.

He promoted those errors in judgment as “good stuff cheap” and furnished countless college dorm rooms and first apartments with furniture, rugs and even artwork at discount prices. (Not to mention clothes, shoes and other items that had piled up in warehouses and stockrooms until they were ever-so-slightly out of fashion, but still serviceable.)

The last of the Building #19s closed in 2013. They had faced competition from other discount retailers that sought to copy Ellis’ business model and from the internet of course, but also were hurt because the company’s main source of supply was disappearing. More efficient supply chains were making overstocks less common.

And that, of course is a good thing, isn’t it?

Firms have gotten much smarter — using such things as computerized inventory controls — at predicting what was happening in their markets and with their supplies, notes Mitchell Glavin, a professor at Stonehill College in Easton, who has a special interest in supply chains.

Those tools — like the bar codes on everything from a sack of mulch to an individual peach — allowed companies to know with some precision what was going out of their doors and what needed to come in to match consumer demand.

Costs were controlled, waste minimized and profits increased — the holy trinity of modern business.

No longer were manufacturers and retailers burdened with pallets of stuff they had to pay to keep stacked up in warehouses. Items moved smoothly down the supply chain in response to customer wants. Companies like Dell have components ready to go “but they don’t assemble them until someone orders a computer,” Glavin says. Apple doesn’t keep a large inventory of iPhones because, well, who wants an old iPhone?

It’s a system that seemed built to anticipate the ups and downs of supply and demand. But there were some things it could not forecast.

“When you have reduced inventory as low as you can, you don’t have as much slack,” Galvin says, when the unexpected happens.

Something as unexpected as a global pandemic.

When governments and industries slammed the breaks on the world economy, the delicate balance of the supply chain was thrown off kilter and the impact of any subsequent disruption was magnified.

And that may combine to make for a more expensive summer for many people who have been anxious to escape the restrictions of the coronavirus pandemic.

For example, one of only a few plants in the country that makes chlorine sanitizers for swimming pools suffered a fire, which destroyed some manufacturing capacity. That, combined with a surge in pool buying as people planned for recreation close to home, has created a shortage and a surge in prices. Chlorine tablets are basically unavailable, said suppliers who preferred not to speak on the record, although other chemicals are in stock.

Or take the simple bicycle. A year ago, Bob Sirois Jr., of family owned Sirois Bicycle Shop in North Attleboro was selling up to 15 bicycles a day to people who were searching for something to break the monotony of the lockdowns.

Many distributors had sold out of low-end consumer bikes, he told The Sun Chronicle at the time. And the country faced a severe bicycle shortage as global supply chains in China and elsewhere in Asia, disrupted by the pandemic, scrambled to meet the surge in…



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