Paper shortages: What’s behind the problems and what can you do?

In a special article on www.whattheythink.com, Lou Caron, a CPA with extensive business experience in both the insurance and printing industry, and former President & CEO of the Printing Industries Association of Southern California, explored this crucial issue. He identified several factors that contributed to the current problems. These included:

• The closing of North American paper mills, in part, because they couldn’t compete due to aging equipment, rising labour costs, and restrictive environmental regulations which often made doing business a losing proposition.

• Over the years, most printers decreased the amount of inventory they held and relied on paper merchants to warehouse and deliver paper within days or even hours of when it was needed (called JIT or Just-In-Time service). However, this only works when all segments of the supply chain are functioning properly.

• It can take six months to bring a paper mill back online!

• The flow of goods arriving at key ports remains a huge supply-chain “bottleneck.”

• There are not enough containers (and vessels) to ship the materials being manufactured overseas and purchased by North American customers.

• Some printers are hoarding paper in advance of anticipated need.

In the next issue of Graphic Arts Magazine, columnist Dan Sparrow will also examine the current supply-chain chaos and its origins, and help you with suggestions to mitigate the effects of current paper shortages.

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