According to the survey company IRI, as of August 9, 265,438+0% of household paper products in major retailers in the United States have been out of stock. And this situation does not seem to change immediately, because American manufacturers have no plans to increase new capacity. In addition, it will take several years to assemble the machine core components needed to make paper towels.
The root of tissue scarcity: strictly follow the "just-in-time inventory"
During the COVID-19 epidemic, the United States faced great pressure, and the lack of paper towels was not a particularly serious problem. But from the beginning of the crisis to now, Americans have been suffering from a shortage of paper towels for nearly six months. If we understand its background, we can understand that it is precisely because of insufficient preparation that the United States has been hit unnecessarily.
The root of tissue scarcity lies in a common problem of American enterprises for decades. These enterprises deal in different kinds of products and earn more profits by almost never relaxing their operations. But usually, enterprises only produce the share that can be sold quickly, and only order the raw materials that can maintain the operation of the production line, and their distribution strength can only match the capacity of 1 day. Therefore, the inventory of goods on the shelves is very small and can only be maintained until the next batch of goods is delivered.
According to the Wall Street Journal, consumers are waiting in line in front of a supermarket in Texas.
This concept is called "lean manufacturing" or "just-in-time inventory", which was born in the Japanese automobile industry with high production efficiency in the 1970s and became the belief of many American CEOs. This concept first appeared in Detroit, the center of American automobile industry, and then spread to other manufacturing industries in the United States, and finally spread to more industries from logistics to retail.
Disaster prevention experts in the United States have warned this. They believe that in the event of an emergency, there may be a risk of insufficient supply of materials. But this warning has little effect, because investors highly appreciate those enterprises that reduce costs through lean management, which is reflected in their stocks and other securities.
From busy in the morning to late at night, the orders of paper towel factory surged 10 times a week.
Patty Austin, 55, lives in a fishing village near the Bund in North Carolina. At the beginning of March this year, when she saw the shortage, she didn't consider hoarding goods. In an interview with the Wall Street Journal, Austin said, "As time goes by, when you walk past the store, you will find that the shelves are getting more and more empty. I noticed that some goods were not replenished for a long time after they were out of stock. Paper towels, toilet paper and detergents are quickly used up. "
Deb Corduto runs a paper towel factory in Naxilla, Alabama. When the retailer's orders began to rise at the end of February, she did not feel the threat from the new crown epidemic. Corduto recalled that orders in one week increased five times than usual, and orders in the second week even increased by 10 times. In order to fulfill these orders, Corduto's factory has started 24-hour uninterrupted production. To this end, she and nearly 65,438+0,000 employees in the factory began to explore ways to increase production. By cutting the variety to reduce the switching time of the production line, they finally succeeded in increasing the output by 25%. Even so, it still can't satisfy all orders. Corduto is often busy from 5 am to late at night.
According to the Wall Street Journal, employees of Procter & Gamble's factory in Albany, Georgia are inspecting the packaging of paper towels.
In April this year, an outbreak of COVID-19 occurred in the town where Corduto was located. "If there is anything that can keep me awake at night, it is how to ensure the safety of every employee. Look at everything you do with suspicion and make sure that the virus will not invade the factory. " Corduto said that although several employees were diagnosed with COVID-19 virus, her factory still maintained normal production.
As Americans began to hoard a large number of goods, the sales of paper towels in physical stores increased by 150% in mid-March. Procter & Gamble said that even now, the demand for paper towels is still about 25% higher than before the epidemic.
After the epidemic, Americans snapped up other commodities, which also led to the congestion of the supply chain to some extent. Such as food, disinfectant paper towels, masks.
Toyota's lean production model has influenced all walks of life in the United States.
Although each commodity has its own specific problems, in general, it involves the lean operation of manufacturers or raw material suppliers, logistics and retail channels suitable for normal demand levels.
Of course, there is no doubt about the advantages of lean system until one day there is a shortage.
Taiichi ohno, vice president of Toyota Motor Corporation, is very familiar with the birth of lean system. In the 1950s, when he was an ordinary engineer of Toyota, he suddenly came up with this idea while visiting supermarkets in the United States. In this supermarket, Taiichi Ono found that as long as customers buy goods, the clerk will replenish them immediately, and there will be no empty cabinets or surplus goods in the supermarket.
At that time, all manufacturers needed to keep raw materials or parts in the warehouse for several months. Manufacturers need full money or loans to buy these raw materials or parts, and storage fees need to be included in the cost.
In 1970s, Japanese automobile industry began to challenge American automobile manufacturers. One of the secrets of low-cost cars in Japan to ensure revenue is to strictly pursue production efficiency. Therefore, in the assembly plant of Japanese automobile industry, a large number of parts will not be kept, and only the parts necessary for assembly will be distributed, which greatly saves capital investment.
The Wall Street Journal said that the paper towel factory of Georgia Pacific Company in the United States
American automakers frustrated in the competition are scrambling to copy the "Toyota model". Soon, many American academic and business leaders praised this model and published a lot of research works. By searching the telephone records, the spokesman cited "destocking" and "slimming" more than 550 times in the corporate earnings conference call of 20 19 Standard & Poor's 500 stocks to measure the acceptance of this model in the United States.
At the retail level, Wal-Mart decided in 2006 to streamline its inventory of $6.5 billion. Executives said the move would release funds to help companies manage rising expenses, such as store renovation plans and fuel costs.
Wal-Mart has also established strict discipline for suppliers to punish them for delivering goods too early or too late. Suppliers who deliver goods to Wal-Mart must also deliver about 80% of the goods within the specified two-day time window, or they will be fined 3% of the cost of the goods. Competing retailers require suppliers to deliver goods according to an accurate schedule to reduce the need for warehouse expansion.
Mike Hsu, CEO of Kimberly-Clark, an American paper towel manufacturer, said that large paper products manufacturers were the hardest hit by the epidemic. Because they take up too much space and have high storage costs. 2 1 century, P&G began to lay off employees. Colgate and Kimberly followed suit and closed dozens of factories.
The crux of the shortage of paper towels: the production capacity can't keep up.
Companies that adopt lean inventory methods largely ignore the principles of system design. Initially, it needed an extensive backup plan in case of power failure or sudden increase in demand. The stipulated strategies include developing relations with standby suppliers so that the factory always has enough materials.
As far as paper towels are concerned, the risk of shortage does not include relying mainly on overseas manufacturers like masks, and the supply of raw materials is not a problem. It is reported that the supply of pulp is sufficient, and the main problem lies in the insufficient capacity redundancy of paper towel manufacturers.
Rick mcleod, head of Procter & Gamble's home care department, said that if it is left idle for a long time, the main machine for producing paper towels will break down. The industry can't transfer the production line from commercial paper towels to household paper towels, because companies either don't produce both kinds of paper towels at the same time, or they can't switch production lines quickly enough.
Dave Taylor, CEO of Procter & Gamble, said: "The cost of making paper towels is very high, and it takes a long delivery time. We won't do business with 30% or 40% extra capacity. This cost will prevent us from pricing in a way that meets customer needs. "
Although P&G has no plans to build a new factory, it restarted idle equipment in a factory in Albany, Georgia in March. Procter & Gamble said that by sending engineers from all over the country, the restart task, which usually lasts for one month, was completed within two weeks. When the machine was up and running, air travel had stopped. P&G can only send these engineers home by commercial plane.
In summer, the shortage of toilet paper has eased, because consumers have enough inventory to cope with the increase in their use of toilet paper at home. However, as people do more cleaning work during the COVID-19 epidemic, the demand for paper towels is still high, and the serious shortage of sanitary napkins makes the situation worse.
Based on the viewpoint of long-term demand, some American paper products production companies are considering transforming some toilet paper production lines into tissue production lines. But they have no plans to build a new tissue factory. Because it exceeds the manufacturing capacity of investment, it is necessary to predict whether the population will increase significantly.
Editor Guo Yu
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