b'SUPPLY CHAIN CHALLENGE CSIA 27W e thought the supply chain issues thatdisruptions caused by factors such as tariffs and arose in the aftermath of the COVIDhigher energy costs, says Tom Palisin, Executive 19 pandemic would be resolved byDirector of The Manufacturers Association, a York, now. No such luck. Businesses arePa.,-basedregionalemployersgroupwithmore grappling with recurring problems caused by laborthan 370 member companies (mascpa.org). With its shortages, a new round of inflation-spurred over- diverse membership in food processing, defense, buying,andshippingdisruptionscausedbythefabrication,andmachinerybuilding,Palisins Russia-Ukraine wear.Faced with robust consumerassociation can be viewed as a proxy for American and commercial demand, companies are beefing upindustry. Companies in just about all sectors have costly inventories and wooing second level suppliersexperiencedpausesandshutdowns.Somehave to help close the gaps when shortages arise.even gone out of business.ProductshortagesanddelaysandassociatedLaborshortagesareoneofthemostpersistent price hikeshave been no strangers to companiescauses of distribution slowdowns. One banker told inrecentyears,thankstointernationaltariffs.methathisfourmanufacturingcustomerscould Whathadbeenanexerciseinefficientmaterialseach hire 50 additional workers if enough applicants distribution,though,morphedintoafull-scalewere to show up, says Conerly. When a company crisis with the arrival of COVD-19 and its effect onI work with in Portland was awaiting a shipment of labor shortages, bottlenecked ports, and shutteredbrass from Los Angeles, it turned out there was no productionfacilities.Thereturnofavigorousdriver for the truck.economyonlyincreasedpressureonanalready thinlystretcheddeliverystructureasbusinessesThe reasons for labor shortages are varied. Part of and consumers accelerated their purchasing. Mostthe problem is that people are not yet willing to come recently, the arrival of inflation caused businesses toback to work, says Conerly. But the fact is that increase their buying of goods even more, in a movethere were not as many pandemic-related layoffs to beef up inventories before anticipated price hikesin manufacturing as in, say, food service. A larger kicked in. Finally, in early 2022 the Russia-Ukraineissue is demographics: Older people are retiring, war created shipping disruptions that fractured vitaland younger people dont want to go into dirty, noisy sections of the global supply chain. factories.Andthenyouhavegovernmentcash payments for people who get laid off. And finally,CENTRAL STATES INSULATION ASSOCIATIONAll of these forces have come together to create athere are childcare issues. challenging environment for businesses looking to balance the dependable delivery of raw materialsThelaborshortagehascausedanincreasein withtheneedtokeepinventoryatmanageableautomation as a way to produce goods with fewer levels. Everyone in manufacturing and wholesaleman hours. In recent months theres been a surge distribution sems to be dealing with supply chainofbusinessordersforcapitalequipment,says disruptions,saysBillConerly,PrincipalofhisConerly.Thefactthatmanufacturingproduction ownconsultingfirminLakeOswego,Oregonhas not reached all-time highs, though, indicates (conerlyconsulting.com).Manycompaniesarethatthenewequipmentisnotintendedtoboost telling me the problem seems to be getting worsecapacity.SoIthinkalotofthebusinesscapital as pent-up demand creates additional pressures.spendingisintendedtoreplaceemptypositions with machines. The idea is If I cant hire somebody Broad effects to assemble this product, maybe I can hire a robot to do it. And I think thats a good strategy.The supply chain imbroglio has engaged a broad spectrumofindustries.ForanumberofyearsA decline in the cost of automation has helped fuel ourmembercompanieshavebeendealingwiththis trend. The cost of labor has gone up while the continuedpg. 28csiaonline.org'