| I wonder what the current toilet paper manufacturers are going through right now? I'm an industrial engineer, so production issues and supply/demand issues are always of interest to me. A few possibilities: * Adding shifts at overtime pay to meet demand (lower profit/unit, but more equipment utilization and total profit) * Potentially higher freight charges (entirely unsure how freight rates are going these days compared to normal) * Calloffs from employees from illness, exposure, or fear * Lacking supply if they're working on a Vendor Managed Inventory (VMI) system - where the supplier owns inventory until pulled by a customer, at which time the supplier gets paid. These agreements often have parameters about stocking and forecast levels, which are typically fine, but then Sales talks about the "customer relationship" and wants to make drastic changes to how the factory runs (sub-optimizing production) to keep $bigCustomer happy. Per the manager, the grocery store near me averages 10 units/day of toilet paper sold (good size town in the Midwest, with many grocery stores). One day about 2 weeks ago they sold 3,000 units. They have ~75 feet of shelf space (4 shelves high) dedicated to toilet paper. Literal semi's full of toilet paper flying off the shelves. They now have a limit if 1 unit per trip. I've been to the store twice since then and always check the toilet paper aisle as a gauge of how they're doing. Still completely empty when I visit after work. COVID-19 doesn't show GI issues as a symptom. Consumption isn't going up notably, but demand has been bonkers. Everybody will have months of toilet paper in their inventory at home, causing demand in the coming months to drop significantly. They may need to reduce the number of shifts or eliminate overtime at the factories. Shelf space at grocery stores is expensive. If the toilet paper companies pay for less shelf space, they may not get it back. Grocery stores won't be excited to use that much space for a product that's moving at <50% of previous volumes. It really is a weird issue and I don't envy the people figuring out how to deal with it. |
Why? Because spiking supply now will hurt them later. Usage hasn't/doesn't actually go up. In fact, usage will go down by whatever percentage of the population succumbs.