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Pandemic taught Md. small businesses to diversify supply chains

 

The pandemic "has wreaked havoc on businesses," says Jayson Williams, president and CEO of Mayson-Dixon, a business development and management company based in Prince George’s County. "It made this country realize how fragile their supply chain can be."

The pandemic “has wreaked havoc on businesses,” says Jayson Williams, president and CEO of Mayson-Dixon, a business development and management company based in Prince George’s County. “It made this country realize how fragile their supply chain can be.”

At the height of the pandemic, Lou Santoni, president of Santoni’s Marketplace and Catering, was getting only about two-thirds of the supplies he ordered, and he had to close the catering part of his business.

“We took a hit for months and months and months,” said Santoni of his Glyndon business.

Similarly, Rick Rogers CEO of B. Green Wholesale, a food service supplier based in Baltimore, said his business also was only getting two-thirds of what he ordered.

“We had a hard time giving customers what they needed,” he said. “Really, there wasn’t anything that wasn’t impacted.”

In Maryland and across the country, COVID-19 showed just how fragile the supply chain can be for businesses both large and small. Santoni’s and B. Green survived by being creative in finding other sources for their supplies. But many similar businesses were forced to shut down because they simply could not get the goods they needed.

The Wall Street Journal recently cited a survey that found 44% of small businesses experienced temporary shortages or other supply-chain problems during the pandemic.

The pandemic “has wreaked havoc on businesses,” said Jayson Williams, president and CEO of Mayson-Dixon, a business development and management company based in Prince George’s County. “It made this country realize how fragile their supply chain can be.”

Small businesses were especially hard-hit, he said, because when supplies run low, the smaller mom-and-pop stores — not giants like Walmart or Home Depot — typically get bumped to the end of the line.

To avoid such shortages in the future, Williams said, businesses need to rely on multiple manufacturers or suppliers, not just one or two.

He also suggested businesses buy in larger quantities and store the excess in warehouses, so they have more inventory on hand if a crisis hits. Over the past decade or so, many American businesses have taken to keeping smaller inventories to hold down costs.

“I hope it’s a lesson learned,” Williams said about the pandemic-caused havoc. “But my fear is if we don’t take thoughtful action, especially around personal protective equipment and other critical supplies we might be caught in a similar situation again in the future.”

One positive development to come out of the pandemic regarding the supply chain, Williams said, is that businesses began looking for more local manufacturers to supply the goods they needed.

Cailey Locklair, president of the Maryland Retailers Association, says small businesses have learned to diversity their supply chains because of the pandemic's impact. (The Daily Record/File Photo)

Cailey Locklair, president of the Maryland Retailers Association, says small businesses have learned to diversity their supply chains because of the pandemic’s impact. (The Daily Record/File Photo)

Cailey Locklair, president of the Maryland Retailers Association, said small businesses are more likely than large chain stores to put all their eggs in one basket – i.e., one supplier.

“Although in this case, the larger stores did as well,” she added, noting the shortage of paper products, masks and cleaning supplies that characterized the early days of the pandemic.

The reasons for the supply shortage were many, Locklair said, including labor shortages as people stayed home from work, high demand for certain products, the breakdown of many transportation routes and panic buying and hoarding of many products.

“That all caused major disruptions,” she said. “There were times when the largest corporations in the world couldn’t even move paper towels.”

Like Williams, Locklair said business owners should plan for a similar calamity in the future – by, for example, diversifying their supply chain.

Both Santoni and Rodgers said they survived the worst of the pandemic by deploying that tactic, among others. Both, for example, took advantage of the restaurant shutdowns that left food service vendors with extra stock to sell.

“My store manager, who’s very resourceful, went to non-traditional places to find what we needed,” Santoni said. “We just had to be as clever as we could.”

“We had to get creative,” Rodgers said. For example, he said, the company started buying single rolls of toilet paper when large packages were unavailable.

Rodgers was hopeful that everyone up and down the supply chain will learn from their experiences of the past year.

“I think everybody’s more prepared now,” he said, noting that manufacturers might cut some little-used products, for example. “Now that we have all that information in place (from surviving the pandemic) if something comes up, we’ll all know what to do.”

 

 

 

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