Millwood’s Tom Slaters, regional sales manager, and Tiffany Greene, inside sales specialist, recently had the opportunity to speak on a virtual panel hosted by Westminster College for the Westminster College Analyst Program’s Winter Speaker Series. The panel discussed the global supply chain crisis and how the pandemic, low supply of materials, steady or increasing consumer demand and lack of labor are impacting various industries and parts of the supply chain.
Tom, along with his sales counterpart Tiffany, who is a graduate of Westminster from the class of 2016, spoke about these challenges from the perspective of the pallet and packaging industry.
“There is some appreciation that has been built up for the simple wood pallet. Businesses realize they can’t ship product without a pallet,” Tom said. “So, we have not had the luxury of telling our customers to come back at a later time when we have something. Instead, we’ve had to find pockets of supply.”
Tom further explained that while our business is typically localized to the customer, in light of lumber supply issues, Millwood has had to source pallets from all over the country. This leads to a heavy reliance on the also-strained trucking and logistics industry, which further complicates the process of getting pallets to the customer.
The panelists also discussed the ripple effects of difficulties and blockages currently plaguing ports in California. With fewer shipping containers coming into the coasts, fewer still then make it inland to the rest of the country. According to the panelists, companies are willing to use whatever shipping containers they can get their hands on. Tiffany added onto Tom’s earlier point that pallet logistics is now stretching from coast to coast and everywhere in between.
“I wouldn’t normally pull pallets from California and send them all the way to Illinois, but now, that’s absolutely what we’re having to do,” Tiffany said. “The ripple effect is spanning across the entire country – even the entire world.”
One of the most undeniable and unignorable pain points of the supply chain crisis is the skyrocketing cost of doing business. Pallets and containers are more expensive than companies can sustainably afford year after year, and the cost of supplies to make those products has risen substantially. Businesses are willing to pay the price to ship their products, especially those with perishable products like the food and beverage industry, because they don’t have much of a choice. However, from a pallet supplier perspective, raising prices too much could jeopardize customer relationships and cause too much budgetary strain long-term.
“Tom and I often ask ourselves how we can find the balance between getting these guys their pallets in a timely fashion while also not charging them three months of a budget with one load,” Tiffany said.
While some companies are looking for ways to relieve pricing pressure, others are seeking ways to keep their profit margins high even after end-consumer prices presumably even out when this crisis ends. Many companies that are vertically integrated can remain as independent as possible from outside forces to a certain point, but no company is an island; there is always going to be another link on the chain causing a ripple effect, especially when labor is in question. Supply chain industry research shows that the companies most likely to survive this disruption and the next will be the ones focused on resiliency and innovation.
Thank you to Westminster College for inviting Tom and Tiffany to speak about issues that affect not only Millwood, but the global supply chain industry as a whole. Our thanks to their fellow panelists who provided valuable insight from the perspective of their diverse industry backgrounds.
In addition to Tiffany and Tom, the panel featured speakers from a variety of industries:
- Dr. Bryan Bischof, head of data science at Weights & Biases in San Francisco, CA
- Carl Carpenter, account executive with Stephen Gould Corporation of Whippany, NJ
- Michael Kurywchak, sales development with WESCO Distribution in Charlotte, NC
- Dr. Christie Grewe Nelson, assistant research professor at Rutgers University in New Brunswick, NJ
- Rodolfo Sant’Anna, supply chain, facilities and human resource director for Galena Farmacêutica in São Paulo, Brazil.
- Jarod Forsythe, chief marketing manager for Infiniti brand
- Lauryn Todd, senior accounting and finance major at Westminster and speaker series director moderated the discussion