It has been six months since coronapanic started. Why is the local Target still out of paper towels, spray cleaners such as Formula 409, cleaning wipes, etc. People are actually using way more of these items? The Chinese can build a hospital for 5,000 patients in 10 days, but American factories can’t expand production in 6 months?
From August 26, 2020, the Target store in Watertown, Maskachusetts:
(shoppers were continuously reminded via the overhead audio system that wearing a mask was required, a bit like being at an airport and hearing warnings about unattended baggage over and over again)
Maybe AOC and Ed Markey are right? Capitalism is a failure?
Maybe the companies don’t want to spend capital to permanently expand capacity for what they view as a relatively short transient demand? Also, these shortages seem to be very locally specific. Except for a short period, months ago, I have had no problem buying toilet paper and paper towels at my nearby stores.
I typically buy that sort of stuff on line from Wal-Mart and they deliver. Since early March it has been hopeless with Wal-Mart out of stock of anything you would want. Last week I tried again and it had in stock most of what I needed thought most cleaning supplies were only available for store pick up & there are no Wal-Mart’s in NYC thanks to the foresight of our government officials who preserve jobs by ensuring that the sorts of people who shop at Wal-Mart pay top dollar for what they need and those with internet access buy what they need on line and create zero jobs in NYC. Go figure.
While I’ve seen the smaller stores (and even Market Basket) have at least some quantity of these items after an initial panic where the shelves are empty (and maybe the 12 pack days are gone?), I wonder if Target and Walmart negotiate much more favorable prices from the manufacturers, so in a shortage situation, they’d rather sell to the stores where they are making a better profit and maybe ration what they provide to the bigger chains? And, as Daniel mentioned, maybe they view this as temporary (but not short enough, so far) and are loath to ramp-up production, or maybe they just can’t (hard to imagine) or won’t?
Aug. 21, 2020 answer:
https://www.wsj.com/articles/why-arent-there-enough-paper-towels-11598020793
“Blame lean manufacturing. A decades-long effort to eke out more profit by keeping inventory low left many manufacturers unprepared when Covid-19 struck. And production is unlikely to ramp up significantly any time soon.”
The reporter that wrote that article was an idiot.
The article should have be titled… “Blame incompetently implemented lean manufacturing” or more likely “Blame greed.”
I practiced lean for 14 years. I saw it done incorrectly all the time by self- serving management.
One of the very basic principles of lean manufacturing is that you NEVER operate a process at 100% capacity. You intentionally build-in process surge capacity to meet variability in demand and/or handle unexpected process downtime due to issues such as unplanned equipment failures, etc. You also create a buffer of finished inventory to deal with variability in customer demand. I can readily agree that the finished good inventory buffer couldn’t handle the unexpected level of customer demand, but the process should never have been designed to operate at 100% capacity.
What likely happened in this case is that the management got so greedy that they intentionally eliminated the extra process capacity to increase short-term profits.
Phil,
Lack of some items may be a local MA phenomenon. Paper towel availability both at Publix and Costco in FL is back to what it was before the panic although there was a brief period I think in May when Publix limited number of paper towels/bottled water per person.
Re. AOC&Markey. Perhaps, capitalism is a bad system, but the socialism they’ll start vigorously implementing in January will be a total disaster when the goal is finally achieved (hopefully, we’ll have enough time to die before that happens). There had been no paper towels in existence in the Soviet Union ever, as well as toilet paper, which may be what MA commie wannabes are striving for — no product no problem with the product shortage for masses but party bosses can use special distribution centers just as they did in the SU !
Typical. Anything that does not conform to the Trump agenda or the idiotic ideas of the boys and girls at Faux News is a socialist. Do you even know what socialism is? A political system where the means of production, distribution, and exchange should be owned or regulated by the community as a whole. Show me where Biden has ever talked about seizing paper towel companies or regulating their distribution. He is a middle of the road Democrat like Obama, Clinton and others before him that have done a pretty good job of restoring prosperity and responsibility after the Republicans have had their hands in the till. It is probably not a good thing to wish for an intelligence test before someone is permitted to vote, but sometimes…
Formula 409 is sold out most everywhere I’ve looked, including Target’s website. There are some indie stores on Amazon that have it. They must have bought early and often.
I wonder if the school districts and colleges, etc., that *are* opening or trying to open have sucked up all the supply of cleaning products? Consider also that any business like a restaurant trying to stay open during the Plague is consuming a lot more cleaning products in the process, if they’re following the guidelines.
Where will we defect to? We can’t all go to Sweden.
https://www.businessinsider.com/how-a-soviet-pilot-defected-to-the-west-with-a-secretive-mig-25p-2018-9
https://theaviationist.com/2016/09/06/the-story-of-the-soviet-pilot-who-defected-to-japan-with-a-secretive-mig-25-foxbat-40-years-ago-today/
I’ve noticed that certain grocery store chains have enough paper towel and toilet paper while others just down the street have been out consistently since March.
My gut tells me that it’s related to how much profit the supplier makes from the chain store.
Can vouch for able to buy all I want in CA, OR and WA. Perhaps in MA it was being restocked by senior center residents with part time jobs.
The short answer is that:
– It’s actually surisingly hard to add meaningful paper making capacity in a short time
– Knowing that the installed capacity actually far exceeds the typical needs, the best guess is that something upstream in the supply chain is constraining it
Since I feel like this blog might attract the kind of reader interested in the longer version, here it is:
Adding capacity:
– Paper making is incredibly capital intensive, and most of the assets can’t be repurposed easily (i.e. printer paper plants can’t really be converted to absorbent paper plants) since the whole machine is designed for one kind of paper
– To give an order of magnitude, a paper machine runs ~$500M, the plant and utilities around it add another 250M. I’ve heard “just under $1B” thrown around as the ballpark figure for the minimum standalone paper towel plant – that’s of course penny pinching private sector figures, I can hardly imagine a Massachusetts town attempting to procure one.
– The stuff that bigger producers run can exceed that, though usually they get efficiency by co-locating at huge plants that look more or less like this:
https://www.google.ca/maps/place/Procter+%26+Gamble+Co/@41.5733636,-76.0481471,1164m/data=!3m1!1e3!4m5!3m4!1s0x0:0x69887a6886fef4e1!8m2!3d41.5733716!4d-76.0469026
– The main bottleneck is what’s called a “yankee dryer” or roll. It’s highly customized to the plant/machine/product and lead time including design can easily be quoted in years. You basically can’t cut corners there, you can only make as much paper as you can dry. They’re also quite a pain to move around:
https://bloximages.newyork1.vip.townnews.com/thederrick.com/content/tncms/assets/v3/editorial/6/03/603581f0-66ba-5206-aca8-85255bcab6ad/5df1e20919412.image.jpg?resize=1200%2C783
– As odd as it sounds, it’s a lot easier to set up a helicopter factory filled with typical milling machines and off-the-shelf instrumentation – save for maybe some CFRP fuselage parts, but those would be more easily hand made on a wooden frame than setting up proper tooling for it a la Spirit Aerosystems.
Current bottleneck:
– Since they’re such a pain to set up, paper plants have been overbuilt for the typical non-covid needs of Americans. For example, the P&G (Bounty) plant in Mehoopany shown in the google maps link above is built to single handedly produce enough to cover the entire US market. The large warehouse north of it has about half a year’s worth of paper towels for the US – there’s a little subdivision next to it for scale. Bounty runs at least 2 other (smaller) sites for the west coast, and noname manufactures run a bunch around the great lakes.
– Given this, my assumption is that something upstream in the value chain is holding up the production. The easiest that comes to mind is wood pulp, typically imported from Brazil or Asia, and given the forest-management red tape, growing, chopping, grinding trees and shipping them to America might not be something that can be turned around in a couple of days
– It’s of course entirely possible to use north American wood (in theory), and I don’t know of a good reason, besides price, as to why that wasn’t considered.
Dunno, paper towels, sanitizer, masks available in WA Costco.
I think your results may vary. The Meijer in Hoffman Estates and the other major stores I have seen around the Chicago suburbs now want for nothing except Clorox wipes and occasionally rubbing alcohol. Even a decent variety of hand sanitizer and masks are in stock.
Glocks and most popular ammo, however, are totally out of stock everywhere around here. Other popular “self defense” guns (concealable antipersonnel guns would be more honest) are in short supply too.
Sounds like we might need to start looking at Costco here in the Seattle area… we’ve been seeing the same, every single non-bulk store has none of these products. It’s even getting more pressing now, our schoolteacher friends are being told they must source their own towels and wipes and hand sanitizers for their use (not students)… sigh.
Jeff / Seattle, WA
Hm, I have not encountered a shortage of those items in my part of San Francisco for the past 3 months. I wonder why?
The Walmarts in my area of FL are very well stocked with all supplies, and have been since late April. CVS and Publix were much more limited and late in getting restocked. At Walmart this past weekend, stacks of cases of cleaning supplies and hand sanitizer overflowing the aisles; they were, however, all out of 22LR ammunition.
I avoid Target at all costs.
In Iowa, I am still seeing some stores with some suspiciously empty shelves. Maybe one store is 99-100% out of paper towels; another store out of toilet paper; and another store out of hand soap. But if I’m willing to go to at least a couple of stores, I can get all three.
Clorox wipes and the like remain especially scarce everywhere!