Great Primer Shortage of 2020/2021

"Opinion" they did not have a huge surge of panic buying from 1. Riots 2. An upcoming election. They are missing key drivers for the huge demand we are seeing.

Uh oh...you’re trying to make sense of a panic shortage? Good luck. It is an interesting observation though.

I saw an interesting discussion with a Kimberly Clark executive on toilet paper shortages (and certain additional factors with the one that happened early in the pandemic). In my simple understanding and simpler explanation—the key factor is anything that buggers up the just-in-time delivery of raw materials and production and distribution has cascading effects that once begun are difficult to stop and harder to reverse. They must run their course.

And panic begets panic and firms are just as susceptible as are individuals since the former comprise the latter.

Toilet paper production operates on a 20-day supply cycle and each step of the way has 20 days of materials and labor to do its bit. Take a day away or add a day to any step and all heck breaks loose.

Added issues last spring were unpredictable labor shortages in every step of the process. Some were illness induced, some lockdown induced.

Sorry, but I just found that interesting to learn.

just-in-time delivery of raw materials and production and distribution has cascading effects that once begun are difficult to stop and harder to reverse

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This^^ Warehousing costs money so most companies over the last 30 years shifted to just-in-time....except the principles and consequences are the same as the military supply chain....if there's a break in supply during a crisis, the whole system fails.

berettaprofessor said:

This^^ Warehousing costs money so most companies over the last 30 years shifted to just-in-time....except the principles and consequences are the same as the military supply chain....if there's a break in supply during a crisis, the whole system fails.

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Correct. I've actually hauled a LOT of, for example, Kimberly-Clark product when I was an OTR truck driver... they actually use semi-trailers as 'warehousing.' After a truckload is picked up, it may set on a yard somewhere for weeks... until the delivery window is reached, or they need to plug a hole in a JIT inventory somewhere. Retailers like WalMart punish vendors like KC if they run out of product... so it makes sense, assuming you don't have a warehouse somewhere packed with product.

berettaprofessor said:

This^^ Warehousing costs money so most companies over the last 30 years shifted to just-in-time....except the principles and consequences are the same as the military supply chain....if there's a break in supply during a crisis, the whole system fails.

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Interesting that concept was taught back in the late 60’s when I attended J&W for a business degree. Car manufacturers were among the first to put it to practice.

Efficiency and effectiveness of course drove JIT but not until robust computing was affordable did it really take off. And, until fairly recently, another big warehousing expense was inventory tax. I think only a dozen or so states still have them, but for certain they get their cut elsewhere.

It would be interesting to know who started the ball rolling on civilian JIT ...folks familiar with military inventory control? Or the contractors who wrote the code and implemented the IT systems? Or some management guru like Demming? Sorry again, helps me take my mind off of the primer shortage.

Well I googled it and wikepedia gave me JIT information—A guy (Ohno) at Toyota in the 50s.

So basically we need tunnels to sneak into Canada to start smuggling in primers.

packetloss said:

So basically we need tunnels to sneak into Canada to start smuggling in primers.

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I would imagine that there would be a better way to do that like opening back up worldwide sales. I don't know the history of what happened but wolf and Tula and a lot of those other primer companies could fill our need if they had access to our markets. I have never seen a wolf primer for sale in person

Right now, his name seems prophetic....Ohno....oh no!

packetloss said:

So basically we need tunnels to sneak into Canada to start smuggling in primers.

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Go fast boats on the Great Lakes for modern version of rum running.

I guess the folks that load their own ammo, didn't stock-up while the getting was good, and "have to shoot" lots of rounds per week/month are going to suffer some withdrawal pain.

Oh well...

bob40caliber said:

Is anyone just a little suspicious that primer manufacturers may be shipping to Canadian distributors and not shipping to U.S. distributors?

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No.

higgite said:

No.

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Me either although I did hear a kind of jingle when Trudeau last spoke on border closing.

bob40caliber said:

Is anyone just a little suspicious that primer manufacturers may be shipping to Canadian distributors and not shipping to U.S. distributors?

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I'd be surprised if they were, outside of contracts inked a while ago that they have to fulfill. I imagine a far more likely explanation is that there is a certain amount of stock already in Canada and when it is gone, they will be in the same boat we are in. The analogy is 22 short ammo when there is a run on 22LR. 22LR disappears, then people start casting around for a suitable alternative. The shorts get bought up and then they are largely gone until the LR excess demand is sated because the manufacturers can't be bothered to do a run of a specialty product on the same line as their main product that has more demand than they can sate.

This has nothing to do with Just In Time Inventory. JIT is a continuous improvement initiative meant to address inefficiencies in a company's supply chain. Said another way, the reason a company might feel the need to carry extra inventory is really just a band aid covering problems elsewhere (forecasting demand, production planning, quality, supplier management, etc). Fixing those issues allows a company to meet demand with less inventory.

What's actually happening is inventory that used to be in distributors and retailers warehouses has shifted to consumers cabinets and closets. Now there's an air bubble in the pipeline. Because manufacturing capacity is finite it takes time to fill it.

The bad news is that once the pipeline is full consumers quit buying, having accumulated several years worth of personal stock. Demand falls to a trickle resulting in manufacturers and retailers getting whipsawed in the process

Nature Boy said:

This has nothing to do with Just In Time Inventory. JIT is a continuous improvement initiative meant to address inefficiencies in a company's supply chain. Said another way, the reason a company might feel the need to carry extra inventory is really just a band aid covering problems elsewhere (forecasting demand, production planning, quality, supplier management, etc). Fixing those issues allows a company to meet demand with less inventory.

What's actually happening is inventory that used to be in distributors and retailers warehouses has shifted to consumers cabinets and closets. Now there's an air bubble in the pipeline. Because manufacturing capacity is finite it takes time to fill it.

The bad news is that once the pipeline is full consumers quit buying, having accumulated several years worth of personal stock. Demand falls to a trickle resulting in manufacturers and retailers getting whipsawed in the process

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I’ll pass it on to the Kimberly-Clark COO because the on,y thing I’m sure he said was related to JIT.

CQB45ACP said:

Uh oh...you’re trying to make sense of a panic shortage? Good luck. It is an interesting observation though.

I saw an interesting discussion with a Kimberly Clark executive on toilet paper shortages (and certain additional factors with the one that happened early in the pandemic). In my simple understanding and simpler explanation—the key factor is anything that buggers up the just-in-time delivery of raw materials and production and distribution has cascading effects that once begun are difficult to stop and harder to reverse. They must run their course.

And panic begets panic and firms are just as susceptible as are individuals since the former comprise the latter.

Toilet paper production operates on a 20-day supply cycle and each step of the way has 20 days of materials and labor to do its bit. Take a day away or add a day to any step and all heck breaks loose.

Added issues last spring were unpredictable labor shortages in every step of the process. Some were illness induced, some lockdown induced.

Sorry, but I just found that interesting to learn.

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Just-in-time manufacturing - right out of my Business 101 class. Of course it buggers the supply chain up. Good point and one I had forgotten.

brewer12345 said:

I'd be surprised if they were, outside of contracts inked a while ago that they have to fulfill. I imagine a far more likely explanation is that there is a certain amount of stock already in Canada and when it is gone, they will be in the same boat we are in. The analogy is 22 short ammo when there is a run on 22LR. 22LR disappears, then people start casting around for a suitable alternative. The shorts get bought up and then they are largely gone until the LR excess demand is sated because the manufacturers can't be bothered to do a run of a specialty product on the same line as their main product that has more demand than they can sate.

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Correct! Once those retailers run out the re-supply timeline will be slow. I'd advise any Canadian reloaders to stock up while possible, of course that only promotes people going out and clearing out stores, which then leads to panic buying and the vicious circle we are in.

NMexJim said:

Just-in-time manufacturing - right out of my Business 101 class. Of course it buggers the supply chain up. Good point and one I had forgotten.

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How? I'm curious

Let me put it to you this way guys.

If the manufacturers of primers had a direct line to your house and could call you up and ask, "hey, how much more do you think you're going to need over the next month" how many of you could answer that question with an actual integer value. Are people are snapping up whatever comes available because they're shooting more or is due to anxiety over an uncertain future? If you aren't certain over how many is enough, and you're the end user, why put the burden on the manufacturer's shoulders for not guessing right?

In other words, don't blame something you don't understand (like JIT) when the more accurate answer is a lot closer to home

I think the shortage is due to a lot of things. For starters an extra 5M new gun owners buying up ammo that wasn't already accounted for by previous demand has an impact. Then add to that raw material and labor shortages due to Covid. I see people going into my local gun shops and range and buying their 1 box per day (when they have any for inflated prices). I also see lots of people shooting off tons of rounds every time I'm at the range. Just picked up 700 extra cases in the 40 minutes I was at the range today.

Vista sports says they are backordered 2 years. If they make more money off ammo, of course you would expect them to divert whatever primers they need to ammo production and only allow the surplus to be sold as primers. This too had reduced the amount of available primers in a given time frame. I just don't see the shortage letting up much for about a year. Just a few months ago, when primers popped up on various sites, it would take about an hour to sell out. Now, if any do pop up, it sells out in a minute or less.

Nature Boy said:

Let me put it to you this way guys.

If the manufacturers of primers had a direct line to your house and could call you up and ask, "hey, how much more do you think you're going to need over the next month" how many of you could answer that question with an actual integer value. Are people are snapping up whatever comes available because they're shooting more or is due to anxiety over an uncertain future? If you aren't certain over how many is enough, and you're the end user, why put the burden on the manufacturer's shoulders for not guessing right?

In other words, don't blame something you don't understand (like JIT) when the more accurate answer is a lot closer to home

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The simple answer every time a manufacturer asks me that question is as much as I want until I’m satisfied. (Oops need an integer—50000)

One has to wonder how an industry leader (Vista) can get 1 year behind and still be a leader. I suppose only Winchester is a peer as to market share? Are we (ammo consumers) so unpredictable in our demand that producers can’t build surge capacity? We all reference this or that past panic/shortage. Are we the only ones with a memory? What other leaders in other industries haven’t learned this lesson and remained leaders? After all we’re not asking for snowblowers in July.