Supply Chain Bottlenecks Drive Factory Decisions at This Maker of Boats,

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Like other manufacturers struggling with wobbly supply chains, sports-vehicle maker

Polaris Inc.


PII -0.40%

is deciding what to produce based on what parts it has on hand.

Polaris is changing its manufacturing and sales strategies on the fly to cope with shortages of materials and parts and an unreliable global transportation system that has disrupted precise production planning.

The company said it is juggling 30 or so supply-chain constraints for its all-terrain vehicles, motorcycles, snowmobiles, boats and off-road utility vehicles. Polaris changes its plans sometimes daily for what it produces. The company switches models for a while as supply-and-logistics managers scrounge for parts and materials for other models it is unable to build.

A Polaris shift supervisor gives a report during a production meeting at the company’s manufacturing and assembly plant in Roseau, Minn.

When there aren’t enough seats in the supply pipeline to produce four-seat versions of utility terrain vehicles because of a shortage of foam padding, for example, Polaris shifts production to two-seat or three-seat models. When more seats become available, factories circle back to four-seat models or add the missing seats to vehicles that have already been assembled.

“If you’re mixing and matching, eventually you’ll attain a good product mix,” said

Kenneth Pucel,

operations chief for the Medina, Minn.-based company.

Companies spent decades conditioning their supply chains to deliver just enough components and materials to match production schedules to hold down costs for storing parts. The absence of backup stocks of parts left manufacturers more exposed if a few large suppliers couldn’t deliver on time.

Tight markets typically provide opportunities for some companies to siphon customers away from competitors. But retail dealers say the supply-chain disruptions, transportation bottlenecks and labor shortages for manufacturers are now so pervasive that it is hard for anyone to capitalize. Polaris dealers sold out and the company couldn’t resupply them at their normal levels; instead, customers are now placing deposits on orders sent to factories.

Polaris shipped out some snowmobiles to dealers without shock absorbers and had dealers install them later when supplies recovered.

Chris Watts,

owner of America’s Motor Sports dealership in Nashville, Tenn., said he carries Polaris and other brands. But his stocks of those brands are mostly depleted as well. “Customers are buying whatever they can get their hands on,” Mr. Watts said.

Like many manufacturers, Polaris had an unexpected surge in sales during the Covid-19 pandemic. When restaurants, movie theaters and fitness centers closed, consumers shifted their spending to boats, motorcycles, all-terrain vehicles and other outdoor vehicles. Polaris’s retail sales in North America last year grew by 25% from 2019 and increased by 70% in the first quarter from last year.

Polaris, which last year had sales of $7 billion, has a leading share in off-road vehicles with about 40% of the North American market, according to industry analysts.

Before the pandemic, Polaris could increase orders to its parts suppliers…



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