San Diego Union-Tribune (Sunday)
DEMAND OUTSTRIPS TOILET PAPER SUPPLIES
Experts say product is easily made; hoarding is problem
Don’t panic. There is plenty of toilet paper to go around — so long as people stop hoarding it.
That message, disseminating both from the companies making the in-demand product and from respected academics who study supply chain mechanics, is technically true, even if it rings hollow when considering the day-to-day realities of life during the COVID-19 pandemic.
The toilet paper life cycle, starting with where it’s produced and ending at your neighborhood grocery story or big-box vendor, is healthier than ever.
“Toilet paper manufacturers are saying, ‘We have enough. Everyone does not need to run out and buy so much,’” said Alexis Bateman, who runs a Massachusetts Institute of Technology lab focused on sustainable
supply chain management.
For instance, Procter & Gamble and Georgia-pacific — you know them as the companies that produce the Charmin and Angel Soft brands, respectively — make most of their toilet paper in the U.S., meaning no foreign import woes to worry about. They are also continuing to supply distribution centers without interruption. And their production capabilities have not been negatively impacted by the pandemic, experts say.
The toilet paper business is a nice, consistent business, said Patrick Penfield, who teaches supply chain management at Syracuse University. And though one might assume workers would be harder to come by during a pandemic of this scale, as in more parents staying home with their outof-school kids, that’s not a problem.
“From what I can see, companies have enough personnel. A lot of (the business) is automated too. It’s not like you need a ton of people to make toilet paper. It’s a pretty simple process, and most of it is using machines and equipment to produce the toilet paper,” he said. “They’re fine from a resource standpoint.”
To boot, the major firms have shifted their capabilities, prioritizing toilet paper production over the other goods they make, Bateman added.
And yet, unless you’re able to make it to the store first thing in the morning, good luck finding it.
“Usually, within two hours, toilet paper is out of stock,” said John Sparkenbach, who is the district manager for Ralphs in San Diego County and Temecula. Sparkenbach oversees 23 stores. All of them have experienced noticeably higher demand for nearly everything they carry because of changing shopping behaviors. “For paper towels, it’s usually about three hours (before it runs out). But that’s better than the initial shock of it, where stuff would last five minutes on the shelf.”
Of course, there are runs on other project categories too, although not quite as pronounced or sustained. Local shoppers can continue to expect a limited selection of diapers, baby wipes, hand sanitizer, canned goods, frozen food, bottled water, bread, pasta, eggs and even meat, with online channels offering little relief.
“The food supply chain in U.S. is one of the best in the world, without a doubt,” Penfield said. “One thing people have to understand is that there’s plenty of food.”
The chain starts with domestic farmers, which Penfield said have more than enough supply, in part because of the tariffs in place with China. From there, items move to U.S. manufacturing plants, like those operated by Proctor and Gamble. Goods are then transported from the plants to regional distribution centers run by major grocery and convenience chains, which have shipments sent to their local stores on a daily basis.
“There are no issues (in the supply chain),” Penfield said. “The issue is demand.”
And there are a few creative solutions in the works to fill some temporary voids. Beer distributors, who have virtually stopped selling kegs to bars and restaurants, may be looking to fill their empty trucks with bottled water, for instance. And, on the flip side, stores are relaxing their rules to bring in new suppliers.
“We’re looking at more local vendors,” Sparkenbach, the Ralphs district manager, said. “Mission Foods is struggling to keep up with the tortilla demand, so we’ll go to local providers and we’ll fast-track them to be able to get into our stores quicker.”
Otherwise, individual Ralphs stores place their orders from the firm’s regional distribution centers — there are four in Southern California — and get shipments every other day, four to five times per week or every day depending on their size and volume.
The Kroger Company, which owns Ralphs and Food 4 Less, initially increased the number of Southern California store deliveries to respond to the coronavirus-related inf lux of demand, but more recently reinstated routine schedules because its systems were being overloaded. That’s not to suggest the publicly traded company, whose stock price is climbing because of the panic buying, is shortchanging customers.
“If we have it (in our distribution centers), it’s getting to the stores,” said Jerriann Dalman, who is Kroger’s supply chain services manager. “It is business as usual, so to speak, with the caveat being that unprecedented volume is being ordered by our stores.”
As industry observers and insiders explain it, there is only one kink in the chain: You. Or, perhaps more appropriately, an outsized public outcry for home products that seem essential and now appear scarce.
And, on the front lines, there are new rules to force a correction.
For starters, store hours have been restricted to allow for better cleaning and more manageable restocking. Plus, there are social distancing mandates. At area Ralphs stores, early bird customers must queue up before being let in, 50 households at first and then 25 households per every 10minute interval thereafter. Shoppers can then only purchase one unit of toilet paper and one unit of paper towels at a time. For eggs and meat, they can grab a maximum of two units a trip.
Such is the new normal for Americans, whose instinctual reaction to the rapid spread of the coronavirus strained marketplace dynamics that weren’t structured to absorb big swings in demand. This is what’s known as the bullwhip effect. Panic-buyers are collectively cracking the whip and distorting usually predictable supply chain waves set up to respond to consistent demand or forecasts. And toilet paper is the latest case study.
“The same thing happened in China, Hong Kong and Southeast Asia a few weeks ago, where people were told to stay home and everyone went out and bought,” Bateman, the MIT researcher, said. “What happened was this huge demand curve went way up. Buyers sent out huge distress signals to buy more and more and more. And now (those countries) have excess inventory because production was ramped up to meet demand. Now supermarkets are overflowing with toilet paper.”
The problem is no one can say when exactly in the U.S. supply will once again meet or exceed demand. “It’s everyone’s best guess in terms of when that lag is going to catch up, particularly in California,” Bateman said.
Penfield, the Syracuse professor, expects supply issues for at least another month. Maybe two.
“We have not seen (panic buying) slow down yet,” Dalman, the Kroger supply chain manager, said.
That’s because each new local, state or White House press conference set the stage for the shelter-in-place order that came from California Governor Gavin Newsom Thursday evening, adding to a semi-permanent feeling of uneasiness. That uncertainty is further amplified when buyers are rejected by previously triedand-true e-commerce companies and then confronted by picked-over store shelves.
“When (people) go to the store and see very little on the shelf, it enforces in their mind that, ‘I better get more because there’s very little.’ It’s a vicious cycle,” said Jimbo Someck, founder of local natural food purveyor Jimbo’s Naturally. “The grocery aisle is pretty heavily beat up. Main staples like pasta, pasta sauce, rice, peanut butter and dairy products (are harder to find). But we’re getting deliveries every day for most of that stuff, so we have it.”
In other words, the products are there, until they’re not. It’s a bit of good news — unless, of course, you’re in the market for toilet paper right now.
Barring the introduction of new production facilities, which Bateman and Penfield agree is highly unlikely, toilet paper may be out of reach for most until the panic subsides.