Supply Chain Woes (CONT’D FROM PAGE 1 )
Broad Effects The supply chain imbroglio has engaged a broad spec- trum of industries. “For a number of years our member companies have been dealing with disruptions caused by factors such as tariffs and higher energy costs,” says Tom Palisin, Executive Director of The Manufacturers’ As- sociation, a York, Pennsylvania based regional employers’ group with more than 370 member companies ( mascpa. org ). With its diverse membership in food processing, de- fense, fabrication, and machinery building, Palisin’s associ- ation can be viewed as a proxy for American industry. “The COVID-19 pandemic has given the supply chain a whole new level of priority. Companies in just about all sectors have experienced pauses and shutdowns. Some have even gone out of business.” Labor shortages are one of the most persistent causes of distribution slowdowns. “One banker told me that his four manufacturing customers could each hire 50 addi-
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tional workers if enough applicants were to show up,” says Conerly. “When a company I work with in Portland was awaiting a shipment of brass from Los Angeles, it turned out there was no driver for the truck.” The reasons for labor shortages are varied. “Part of the problem is that people are not yet willing to come back to work,” says Conerly. “But the fact is that there were not as many pandemic-related layoffs in manufacturing as in, say, food service. A larger issue is demographics: Older peo- ple are retiring, and younger people don’t want to go into dirty, noisy factories. And then you have government cash payments for people who get laid off. And finally, there are childcare issues.” The labor shortage has caused an increase in automa- tion as a way to produce goods with fewer man hours. “In recent months there’s been a surge of business orders for capital equipment,” says Conerly. “The fact that manufac- turing production has not reached all-time highs, though, indicates that the new equipment is not intended to boost capacity. So I think a lot of the business capital spending is intended to replace empty positions with machines. The idea is ‘If I can’t hire somebody to assemble this product,
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24 September 20, 2021
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