MARCO ISLAND, FL — Attendees of the BEMA Convention, held June 23-26 in Marco Island, FL, gathered to hear insight from key industry executives on challenges the commercial baking industry is facing in the wake of massive supply chain disruption.
Panelists included Kerwin Brown, BEMA president and CEO; Robb MacKie, president and CEO of the American Bakers Association (ABA); Rick Hoskins, president, Colborne Foodbotics and 2020-21 BEMA chair; and Brad Alexander, COO of Thomasville, GA-based Flowers Foods and ABA chair.
The disruption happened fast and is still changing at an alarming rate, challenging bakers and suppliers to get a foothold on the situation.
Hoskins noted some statistics to illustrate the situation’s speed and depth.
Cost for a 4×8-ft. sheet of 7-gauge stainless steel
– December 2020: $550
– June 2021: $1,300
Cost for a 3x6x240-in. piece of stainless-steel tubing
– December 2020: $723
– June 2021: $1,300
Cost for a 4-in. x 12-ft. aluminum bar
– February 2020: $400
– June 2021: $700
Alexander likened what’s happening to the concept of a large ship. COVID-19 lockdowns halted much of the global economy. But when recovery ramped up quickly, the global supply chain, much like a ship, takes time to turn around.
“We need each other,” Alexander said. “And we want our suppliers to be successful.”
From left: Rick Hoskins, Robb MacKie, Brad Alexander and Kerwin Brown.
The disruption is impacting every point on the supply chain, from equipment and ingredient manufacturers to end users. The key to getting through it, according to the panelists, is transparency.
“If we have a new project coming, we’ve got to make sure our suppliers understand our needs,” Alexander said. “We’ve been committed to making sure that our purchasing group is communicating with our suppliers to give them as much lead time as possible. Communication — from all of us — is critical.”
Prices and lead times for materials are changing by the month, week … or even day, making it nearly impossible for suppliers to maintain static pricing.
“I’ve been amazed at how our customers have been able to accept new pricing structures, even when they happen at the last minute,” Hoskins said.
More baking companies are looking at their capital investment planning with a longer view and taking a more strategic approach to those plans, which helps to manage unusually long lead times the suppliers are forced to impose. The silver lining, according to Alexander, is that changing these strategies are naturally streamlining capital projects.
“When we communicate more of that with our key suppliers, they know what our plans are over time,” he said. “Then they can schedule accordingly, and that can help cut waste in the system.”
Partnerships between bakers and their equipment and ingredient suppliers are a key element in navigating the disruption and ensuring success for bakery businesses and the industry as a whole.
“We need each other,” Alexander said. “And we want our suppliers to be successful.”
