KRWG

The Delicate Supply Chain

Nov 3, 2020

Commentary: Imagine, if you will, the market for air vents that exists in almost all buildings as part of an HVAC system. Steel is forged and rolled in 47,000-pound steel coils that are then sent to either a steel slitter or stamper, depending on the nature of the vent. The slitter/stamper cuts or stamps smaller metal sheets with which the vents will be created. The pieces are then sent to a production plant that finishes them by painting them, installing screw holes, and packing them. 

Since most manufacturers no longer run their own logistics operations in the form of having fleets of delivery trucks, a third-party logistics company, which is a contracted logistics firm, picks up the finished pieces and takes them to a distribution center, where they will await to be shipped upon receiving orders. When ordered, they are then shipped to a retailer, then sold to a general contractor, who then installs them in a building.

   Now imagine taking one link out of this supply chain, for example the plant that paints and finishes the vents. That is exactly what happened at the beginning of the pandemic with many industries, and what is in danger of happening now, with COVID cases spiking again. The El Paso-Juarez-southern New Mexico region is an industrial base that is woven into world supply chains that produce items such as automobiles, consumer products, and medical equipment. In the age of COVID, companies are put at risk and can become extremely vulnerable to dropping out of their supply chain, or having their production restricted by authorities, if a COVID outbreak happens within their operations.

Public officials are playing a very difficult game of attempting to protect citizens, while trying to minimize the economic impact of tightening restrictions. This situation has polarized the public both in the U.S. and Mexico. Here in the El Paso-Juarez-southern New Mexico border region, we are witnessing the rapid rise of COVID infections, to the point that a shortage of hospital beds is occurring. El Paso has converted its convention center to a temporary hospital in order to create more space for COVID victims. Meanwhile, industries are nervously monitoring companies in their supply chains and trying to find ways to avoid disruptions. Many are trying to build redundancy into their supply chains, in which more than one supplier can pick up the slack if one has to suspend operations.  

The production plants and distribution centers that I am familiar with take great care to limit the spread of COVID in their operations. Temperatures are taken, masks are worn, hand sanitizer is plentiful, and workspaces are constantly disinfected. Some plants have spread their workers apart by adding more than one shift in order to social distance while still adhering to their production requirements. In Mexico, most of the maquiladoras (twin plants) have in-plant clinics that provide healthcare services to the employment base, and in many cases, their families.  

However, all precautions can be for naught if one worker lets his/her guard down, goes to a party with friends, becomes infected and then shows up at work the next day, endangering the rest of the workforce. Some plant managers I have talked to are pulling their hair out at the behavior of some of their employees, who are showing no consideration for their colleagues. One careless employee could start a wave of infection in a plant, which eventually would get shut down by authorities to try to contain the spread. At that point, all employees are furloughed, work is lost, and people have to go on unemployment. The entire supply chain could be disrupted quickly.

The vulnerability of supply chains and the ability for products to reach the final consumer ultimately rests with each one of us. The public has grown extremely weary of the COVID lockdown and living with the restrictions that have been imposed to try to protect the most people we can in order to deal with the pandemic. It is human nature to be social and this is exactly what is being curtailed at present. However, until the vast majority of us get vaccinated against this horrible disease, outbreaks will continue to happen if people let down their guard by not realizing that we are in a long-term battle that could last until the summer of 2021.

There are ways to mitigate the infiltration and spread of COVID even in large production plants or distribution centers. Companies are mandating the use of masks, social distancing, and disinfecting, just like the rest of the American public should. Many are educating their employees about the responsibility of staying safe when away from their job, and impressing upon them that they have a responsibility of keeping fellow workers safe by doing so. However, it is individual responsibility that will ultimately determine the outcome.