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Global supply chain issues short-circuiting goods and services in Madison

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Supply Chain disruptions

At Willy Street Co-op on Madison's East Side, Gracie Groshens looks for a nutrition bar, one of several items the retailer has had a hard time keeping in stock due to global supply chain issues.

Willy Street Co-Op on Madison’s East Side was bustling with shoppers last week, but several shelves typically full of canned vegetables, glass jars and certain meats were vacant — with no time frame for when the goods would return.

The reason: Worsening global supply chain disruptions caused largely by a worker shortage and related price inflation, said director of the UW-Madison Grainger Center for Supply Chain Management Jake Dean.

Willy Street is one of several examples of how the supply chain crisis continues to manifest in the area, as the disruptions are hitting grocers, retailers, specialty shops and their customers.

Also affected are local businesses and consumers looking to build homes and commercial properties, or seeking specific types of hardware or components.

That’s because the time it takes to acquire materials such as glass and steel has stretched from weeks to months, and local contractors have to delay construction deadlines as there are no workers to make products or ship them.

Shopper Liz Chapa walks past a few empty shelves of drinks at Willy Street Co-op on Madison's East Side.

The unemployment rate sank last month from 5.2% to 4.8% and the economy is showing “some signs” of recovering from the COVID-19 delta variant surge, according to a gripping jobs report released by the U.S. Department of Labor last week.

But employers around the world are still having trouble finding workers, particularly staff to ship products by road and ocean — a major contributor to the latest product shortages.

The shortages are also making prices skyrocket to their highest levels in three decades, according to the jobs report.

Dean said there’s a reason for this, in part because the U.S. supply chain system was already fragile before the onslaught of the health crisis.

“I can speculate on some causes,” he said. “Everything is in the wrong place … there isn’t enough labor. I personally don’t understand … it just seems like a bunch of people left.”

The supply ‘wire’

Dean likened the global supply chain to a wire leading from an electrical outlet to a lamp.

Most people don’t think about what’s going through the wire when they turn the lamp on — they just assume the lamp will have power, he said.

But if that wire has one tiny blip, it can have a ripple effect.

If there aren’t workers available to make products or make sure they ship, but the demand for those products continues to rise, that raises the cost, Dean said, which contributes to price inflation for consumers and businesses.

Most shipping companies already don’t have the capacity to keep up with current demand, he said. It doesn’t help that no one product flows along the same supply chain wire.

A sign alerts customers to the supply chain shortages preventing goods from making it to consumers at Willy Street Co-op.

So instead of being able to dock at ports, ships across the world wait in lines to deliver their cargo.

And truck drivers and freight workers are scarce, resulting in late shipments.

The scarcity of certain products also contributes to the increase in prices.

For the next six months, Dean said that people should check their assumptions that they’ll have the product they are searching for “instantaneously.”

“We aren’t going to be back there for a while,” he said.

Not business as usual

At all three Willy Street locations in the Madison area, a holiday promotion couldn’t happen because of an eight-month lead time for anything made with glass.

The store had wanted to promote some of its woodware and bakeware products, purchasing director Megan Minnick said.

The retailer has mitigated the supply chain crisis by shortening the chain — purchasing from local vendors, Minnick said, which the grocer has done since its founding.

For customers of Machinery Row Bicycles on the East Side, manager Ben Classon said they might have to travel several miles before they can find any specific bike component.

Demand for bikes has risen amid the pandemic, while supply for parts has dwindled.

What used to be readily available now might be sitting inside a shipping container somewhere across the nation — or world.

“Freight costs that we never paid are starting to get sent to us,” Classon said. “That’s cutting into our bottom line and making things harder for us to move forward … this already difficult atmosphere for maintaining staff.”

Willy Street Co-op communications director Brendon Smith describes the supply chain shortages the co-op is seeing in glassware, specifically B…

Both Minnick and Classon said the businesses continue to adapt to changing supply chain conditions as best as they can. It’s an issue that has been developing for years.

A waiting game

The supply chain situation isn’t any better for home builders and the construction contractors that build commercial properties like offices.

In some cases, it’s worse, especially when there are unchangeable deadlines to meet for builders like J.H. Findorff & Son, whose sole focus is commercial buildings.

“All contractors including Findorff are seeing shortages,” said executive vice president Jeff Tubbs, noting that causes delays for staff, so they are tasked with seeking alternative materials with quick turnaround times. “There are shortages in countertops, windows, door hardware and roofing materials … the list goes on and on.”

“It’s been the perfect storm of shortage of supply because of either COVID-19 or other related aspects that have shut down some of the manufacturing plants,” he added.

Findorff, with locations in Madison, Milwaukee and Wausau and more than 1,000 employees, also has seen manufacturers consolidate services as they fail to find workers, Tubbs said.

For Drexel Building Supply, having locations throughout Wisconsin, items including the “smallest little screw” are back-ordered for “months”, said manager Keith Batenhorst.

He coaches his staff to be empathetic to the consumers who might have to wait a little longer to build a new deck, or do that kitchen remodel.

“I think one of our biggest ports is (in Long Beach, California),” Batenhorst said of supply shortages specific to Drexel. “Typically we have one ship waiting and coming up.”

“Right now, (the port) has 40 ships waiting to get unloaded,” he said.

The Associated Press contributed to this report.

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