The COVID-19 pandemic caused disturbances felt around the world, including manufacturing and labor shortages. Due to this, over the past few years, there have been unprecedented supply chain problems with products ranging from vaccines to toilet paper, new cars, and even semiconductor chips for electronics. This is something that is to be expected when there is a sudden spike in the demand for goods and services, however, the ups and downs of the pandemic have certainly exaggerated the shortages, known as the bullwhip effect.
Another factor creating a major issue is the COVID-19 virus itself, and the many variants that have followed since the original strain. The surges in cases and the uptick with the new variants left massive labor shortages as infected workers were forced to quarantine, and businesses needed to implement new restrictions within the workplace. China has implemented a ‘Zero COVID strategy’, which is likely to continue to interrupt production and shipping. With all these factors considered, the supply chain crisis is expected to continue well into 2022, but thankfully there are ways to combat manufacturing labor and material shortages.
True Root Cause for Manufacturing and Labor ShortagesThere has been a ‘domino’ effect created by many factors during the global pandemic that has contributed to manufacturing and labor shortages. One glaring issue is the problem with shipping and logistics. Shipping containers move some 1.9 billion tonnes per year by sea alone; this volume is made up of all types of imported foods, electronics, appliances, and raw materials. Typically, these shipping containers are continuously loaded, shipped, unloaded, and repeated, but detrimental trade interruptions created from lockdowns and closed borders have put a kink in the well-oiled machine. Shipping containers have been abandoned in the wrong areas due to the trade shift, there has been a significant reduction in shipping volume, and ships have been unable to dock when and where they were supposed to. All this combined has created untimely delays. A typical container takes about 20% more time in transit than before the COVID-19 pandemic.
Another factor in manufacturing and labor shortages has been human influence. Even with technology booming, supply chains still rely heavily on laborers producing and delivering the products necessary for manufacturing and inventory. Businesses were forced to lay off workers during lockdown periods, which created labor shortages as demand was increasing. Truck driver shortages began to ease up around the holidays as new recruits began working. However, with recent boycotting occurring, problems have begun to surge again. As mentioned previously, we saw an uptick with COVID-19 and variant surges, causing laborers to take sick leave and causing businesses to have to implement new restrictions in the workplace. All these factors have made a huge impact on supply chains, businesses, and the workforce.
In a recent interview, Boston Centerless CEO Steve Tamasi spoke out about the impact the labor and material shortages are having on the company: “We have managed well through the raw material shortages. Long lead times from the mills have left many of our customers scrambling to find material in the short term until the mill orders are delivered. The labor shortage is proving to be very challenging. Like most, we are finding it extremely difficult to grow our employee base, particularly with our direct labor force.”
Are you looking for an industry-leading precision manufacturing and supply chain management partner? Boston Centerless can provide a strategic solution that is unique to your business needs.
Contact the professionals at Boston Centerless to find out more about how we can help you avoid unnecessary material and labor shortages.
What Areas in the Supply Chain Have the Highest Material and Labor Shortages Right Now?In 2021, more than 47 million workers quit their jobs. The manufacturing industry faced a major setback after losing roughly 1.4 million jobs at the onset of the pandemic. Since then, the industry has had a difficult time finding skilled workers that can fill the necessary positions. The truth is, not just any worker is qualified to occupy any position, many manufacturing jobs require a certain level of skill, training, and education. As Boston Centerless CEO, Steve Tamasi, explains, labor shortages are putting pressure on many manufacturing facilities, with “the greatest challenge being finding new employees for the manufacturing floor.”
The logistics industry labor shortages have also caused a ripple effect in labor and material shortages. In 2021, trucking and transportation companies within the United States lost about 80,000 drivers. On average, trucks transport roughly 72 percent of American goods, so a lack of drivers caused a detrimental impact on the fluidity of the supply chain.
How Can Companies Combat Material and Labor Shortages?
There are useful strategies that can be used to help businesses combat material and labor shortages. The most useful way to do so is to partner with a company, like Boston Centerless, that offers supply chain management. Companies that offer supply chain management services can provide their customers with just-in-case inventory while saving them overhead by simultaneously offering them just-in-time inventory costs, thus also helping to avoid stressful material shortages. Additionally, partnering with a third party that specializes in manufacturing can be greatly beneficial for obvious reasons. They have adequate skilled professionals already working within their facilities, meaning that their customers do not have to worry about the stresses of hiring and training laborers within their own facilities. This can also reduce operation costs, as customers need less maintenance on their own equipment, resources to pay employees, and wasted space within facilities to store additional inventory. It is beneficial to partner with a business that has expertise in manufacturing and supply chain management, that way the customer benefits from a detailed and customized game-plan for their business success.
As Boston Centerless CEO, Steve Tamasi, recently stated: “In order to counteract the material supply issues, we took action to build inventories early on which has proven to be very helpful. We also are relying heavily on the strong, long-term supplier relationships we’ve developed over the past 6 decades.
With regards to the labor shortage, we recently hired a full time, in-house talent acquisition specialist. We have raised starting wages and subsequently moved the entire wage scale upward. We have given merit increases to ensure that all employees are fairly compensated. Additionally, all direct labor operators that worked through the pandemic received a bonus. We are reviewing our benefits package to ensure we remain competitive within our industry.”
As a reliable partner, Boston Centerless works closely with customers to create an inventory management program that protects your production needs while aiming to reduce inventory expenses. Our business provides a variety of programs to choose from so that our customers receive a customized effective solution to sustain a healthy business.
Boston Centerless closely reviews our customers’ needs so that we can identify areas where inventory cutbacks can be made. Our managed inventory programs allow us to flow material requirements so that working capital that is tied up in inventory can be significantly reduced. Boston Centerless has
strategically placed distribution centers that stock specific inventory to suit business requirements so that materials will be available for rapid transportation to our customer’s facilities.
The following inventory management options are available:
· Blanket orders
· Kanban
· JIT
· Hold-for-Release
· Dock to stock
· Dock to line
· Product on consignment
Boston Centerless offers resolutions that improve our customer’s manufacturing practices. With more than 60 years of experience, our business produces the tightest tolerances in the industry.
Our product offerings consist of:
– AccuRod® Precision Bar
– BC Medical Grade Alloys
We are also proud to offer the following services:
– Precision Grinding (GrindAll) on customer-supplied material
– Value-Added Services (Supply Chain Logistics)
– Material Testing and Validation (XRF, UT, Eddy Current)
– Supply Chain Management
– SwissAssist CNC Swiss Machine Training
Culture is important at Boston Centerless, so important we call it the BC Way. The BC Way transcends the products we sell, markets we serve and any of our leaders and individuals; it is built upon our unique enduring character and approach to business. Our core purpose is To be a role model for U.S. manufacturing as we continuously strive to set an example for the manufacturing industry, improve customer experience and our own work environment.
Let Boston Centerless manage your supply chain and material sourcing needs. Contact Boston Centerless at 781.994.5000 to learn more today.
