John Gessert building trucks at his assembly plants in Michigan and Mississippi has never been more troublesome than it is now—even with only a few parts per unit.

The president of American Plastic Toys Inc., headquartered in Walled Lake, found that after the COVID-19 pandemic, even toy trucks are not immune from the supply chain crisis, which has hit car companies and other manufacturers severely.

It seems to be nothing. From Carhartt clothes and Whirlpool washing machines to La-Z-Boy recliners and Masco paints, the cost of products from manufacturers in Michigan and across the United States has soared over the past year. As a result, shelf prices have risen because companies want to protect their products against these costs. Pass it on to the customer.

"I call it a puzzle, a very difficult puzzle," Gusset said. "Trying to put it together and keep things flowing is as difficult as ever."

The unprecedented cost of container transportation from Asia has hit many of Gessert's heavy-import competitors and provided a huge opportunity for his company, which purchased less than 5% of components abroad. However, for American Plastic Toys, this problem is not so much a problem of parts as it is a lack of people to piece things together.

The company has about 250 employees, up from 300 before the pandemic. Gessert said that despite the increase in wages and bonuses, he still could not attract enough workers to meet record demand. He said this resulted in millions of dollars in lost sales.

"We have to reject the retailer's business, they want more products to fill in some products they won't get from Asia or worry about getting it," he said. "Retailers are competing for products."

Gessert's plight has changed in administrative offices and factories of various types and sizes across the country. John Taylor, a professor of supply chain management at Wayne State University, told Crain's of the "bullwhip effect" in the market in May that he said the whip was still breaking.

"It often happens that you start hoarding, causing the company to have to build inventory," Taylor said. "Everyone is hoarding goods. This makes consumer choice more difficult."

William Hardy, senior vice president of supply chain for workwear brands based in Dearborn, said that this is one of the main problems facing Carhartt. Transportation problems and unpredictable delivery time are hindered. .

"I am 29 years old and I think based on collective experience, some of the challenges we have seen are new to many of us, and I believe this is a decisive moment in how we as a company deal with these challenges," he Say. "Our production and sales are increasing year by year, and we will continue to work hard to take advantage of the demand there."

For Carhartt customers, tight supply means that some products, including its classic beanie, will be difficult to arrive this holiday season. Therefore, the company offers different styles and emphasizes gift cards so that customers can get what they want when their needs are not so crazy in the future.

Customers browsing the toy shelves of Walmart, Meijer, and other major retailers should still be able to find American Plastic Toys trucks, but, along with its other products, are expected to pay more.

"From my perspective, I don't think inflation is temporary," Gusset said. "I think it will last at least for a while, because between the material, labor, and transportation costs, what we used to sell for $20 or $25 is now $30 or $35 or even $40, depending on it."

In the past few months, inflation has been a topic of American economists and financial experts. In the supply chain nightmare before Christmas, this is a key issue for Michigan consumers and companies.

Some people handle it better than others. Whirlpool, headquartered in Benton Harbor, turned challenges into substantial profits, with revenue of $5.5 billion in the third quarter, a 4% increase from last year when demand for home appliances surged. The company reported that although the cost of product sales rose by 237 million U.S. dollars, its gross profit margin remained the same as last year at 1.1 billion U.S. dollars.

Whirlpool Chief Financial Officer James Peters said on Whirlpool’s earnings conference call that the negative impact of rising raw material prices, especially steel and resin, "is completely offset by our comprehensive price mix and net cost actions."

Whirlpool Chairman and CEO Mark Bitzer said on the conference call: "Today, we are operating in an environment of limited supply and inflation, which has a negative impact on most industries around the world." "However, we are. A record performance (one year)."

At La-Z-Boy in Monroe, executives asked customers to work with furniture manufacturers to deal with supply chain storms.

President and CEO Melinda Whittington stated on an investor conference call in August: “Given the unparalleled nature of rising material costs, we require our business partners to experience innovation in all of us. The period of record demand shares the financial impact."

According to the company, the waiting time for La-Z-Boy recliners and other products has been extended to seven months, and the company maintains furniture circulation and minimizes interruptions by stocking “key components”. It has also increased product prices several times in the past year.

Passing on the cost did not harm the business. La-Z-Boy reported record profit and sales for the fourth quarter of fiscal 2021 ending on April 24. Gross profit for the quarter was US$222 million, sales were US$519.4 million, and sales were 171.1 million. US dollars, sales of 367.3 US dollars in the same period last year was 1 million.

Zeeland-based furniture manufacturer MillerKnoll acquired Knoll Inc. in the spring and changed its name to Herman Miller, which was hit hard by the pandemic, especially its office furniture division. Although the report said that some people returned to the office, orders increased, but due to supply chain issues, the company estimates that its sales in the first quarter of fiscal year 2022 will reach 30 million U.S. dollars. It also raises the price.

"This is no secret. We are feeling the impact of corporate inflationary pressures. We expect that the pressure on commodities from the fourth quarter to the first quarter will drive costs up by approximately $4 million, which will put pressure on gross margins," MillerKnoll Chief Financial Officer Jeffrey Stutz said at a meeting. Call with investors in June. "We also feel this in terms of direct labor costs, just like many companies."

Livonia-based Masco supplies Behr paint to Home Depot and other wholesale customers. It is another Detroit subway company that successfully passed price increases to Detroit. Although its bottom line has been affected by the supply contraction, it said at the end of last month that strong demand was enough to make up for it.

Toy maker Gessert said he wants to know how long this demand will last - and whether he can hire enough employees to take advantage of it before the demand disappears.

"We could have had a very extraordinary year," he said.

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