What's the Supply Chain Got to Do with it?

- Ming Kuo
What’s the Supply Chain Got to Do with it?

You may have noticed empty shelves and low or missing products around town, including Common Ground. For this month’s CGFC Board newsletter article and General Manager article, I (Ming Kuo) wanted to hear from some real experts on supply chain issues –– Gary Taylor, CGFC’s General Manager, and Robert Taylor, CGFC’s Board President (and no relation to Gary. That we know of.) 


I hope you enjoy the interview below. 


Ming: Gary and Robert, you both deal with the supply chain on a daily basis––just how messed up is the supply chain right now?

Gary (35 years in the business): Worst I have ever experienced. There have always been occasional items that were hard to get but the shortages did not last very long before they were back in stock or an alternative could be found. 


Robert (20 years in the supply chain field, in both logistics and operations roles):  I agree with Gary. It is the worst I have ever seen.  Generally supply chain issues only affect one or a few streams of goods.  Right now it is - wait for it… - unprecedented. I won’t say I am at my wit’s end, but I lose sleep over the current situation every night.


Wow. To understand what’s going wrong, let’s start with unpacking the supply chain. How do products get from point A (their origins as raw ingredients) to point B (consumers)?

Robert: Most of the time the only people that really think about the supply chain are the people who make the supply chain work. The store is the end of the road for a product that had a very long line of steps and stops before it ever reached that shelf. Generally it all just works, but at each step there could be a disruption in the supply chain. 


What are some of the steps?

Gary: Getting products from one point to another requires very intricate, detailed steps. Take a bottle of water, for simplicity's sake. There is only one ingredient, but you can imagine how the process becomes exponentially more complicated when manufacturing requires multiple ingredients to make one end product. 


Assuming all ingredients are readily available, the next requirement is properly running equipment. Because of breakdowns and difficulty getting parts to repair equipment, the supply chain can be interrupted even before manufacturing can even begin. 


Assuming everything is working and all ingredients are available there must be packaging for the product, lids, labels, safety seals, boxes to package the product in, tape to seal the boxes, pallets to put the product on for shipping, and enough working trucks to ship the product. 


All along the way we need workers to: monitor the manufacturing process, load the product onto pallets, load the pallets onto the trucks, drive the product to the distribution center, unload the product to a specified slot in the warehouse, fill the order for the store, put the product on pallets for each individual store, load pallets onto a truck, drive to the destination store where it needs to unloaded, and placed onto carts before finally being taken out onto the sales floor to be stocked on the shelf. Finding enough workers, who are also in short supply currently, is definitely a challenge across the whole industry.


RobertHere is a great piece that was recently on CBS Sunday Morning on the current Supply Chain issues. 


It’s got to be frustrating, having to deal with so many problems in a system that usually works smoothly. Is there anything you've found satisfying, working through this period of crisis? 

Robert: The thing about a crisis is that it tends to bring people together to work for a common goal of ending the crisis.  Don’t get me wrong––I have no desire to have another pandemic or global supply chain disruptions––but I have learned a great deal during this time and been able to work with amazing people willing to do just about anything to get through it.


Gary: I am just happy that we were able to get on board with a second major health food distributor. Having KEHE foods as a backup source for products has helped us and will continue to help us find alternatives to sell. We also have found some new local suppliers to fill some gaps (Janie’s Mill).


Which products are disrupted by supply chain issues? Is the result just bare shelves, or do supply chain disruptions affect prices, as well?

Gary: There are probably more store brand out-of-stocks than any other. Store brand goods are produced by the same folks that make name brand products––they just put a different label on them. I am pretty sure [the difficulty we’re having keeping store brands in stock] is because the name brand items get their needs handled first and store brands are put on the back burner. Field Day is our “store brand” and we are seeing sporadic outs on these items. Yes, everything that is affecting the supply chain is affecting prices right now––higher fuel prices, higher maintenance costs, higher labor costs, and higher raw material costs. 


Robert: All products are affected by supply chain disruptions, but to varying degrees.  There are many disruptions right now but the most impactful one is transportation.  There are not enough truck drivers for all the goods that need to move.  In September, there was an average of 6.32 loads for every one available truck. That ratio almost doubles for refrigerated trucks. This drives transportation rates very high, which causes pricing increases on raw materials, packaging, and ultimately the final sale price of a product. Gary also addresses a great point. Bigger and higher paying companies generally get serviced first.


Can you talk about the relationship between [buying local] and [supply chain issues]?

Gary: [Our] buying local helps us immensely! Last year during the early panic buying I saw meat and produce departments that were totally empty at nearby, conventional stores. Our local suppliers however were able to come through for us and minimize our out-of-stocks. Because of Janie’s Mill we were able to get flour and yeast when there was nowhere else to get any. Support Local businesses as much as possible during this time. We need it! 


Any tips or suggestions for folks buying groceries who encounter something missing? 

Gary: Be flexible, be less brand loyal, explore new foods for your diet. Look into placing special orders for items you use a lot. Stock up early for the holidays––items may not be available the day before.  


Robert: Stock up, but don’t hoard!


Any myths or misconceptions out there that you’d like to address? 

Gary: This is no one’s “fault.” There is not just one person or circumstance to blame. We are doing our best. 

Anything else our Owners might be interested to know about supply chains?

Robert: I think most people would be surprised to know how many jobs there are in the supply chain. Until the pandemic hit, we really didn’t have to think about a grocery store or factory worker as a “critical infrastructure worker” but that is exactly what everyone in the supply chain is. Many of us in the supply chain world are invisible. We are like the crew on a Broadway stage.  You see the performers, but not the set builders, costume designers, and all the other roles that make the magic happen but they are all there.


Gary: I love Robert’s analogy about theater production. I did a little bit of background support in high school as a member of the pit band. Imagine if the lighting crew was late, or individual actors got sick, or the building lost power. The show must go on! 


A great note to end on. Thanks for your time, Gary and Robert! We’re lucky to have supply chain experts like you in our community, and at Common Ground.