Forest product CEOs thinking “just-in-case” inventoryCredit rating analysts expect the hoarding of paper products to slow in the last half of 2020, an with it demand for tissue supplies to reverse. Supplies may be affected by industrial shut-downs, according to a credit rating issued on Georgia Pacific, a major provider of tissue products. Credit: David Pendered
An empty toilet paper shelf in May this year. Credit: David Pendered
By Maggie Lee
The folks who lead the companies that bring you paper products — some of the biggest of whom are headquartered right here in Georgia — are leaning in to the idea of keeping more products around.
Which might avoid the next toilet paper shortage.
It’s too early to say exactly how companies will change, said Georgia-Pacific CEO Christian Fischer, speaking this week at the American Forestry Conference, an online industry forum hosted by the Georgia Forestry Association.
But the pandemic year has been a volatile time that’s getting consumers and companies thinking differently, he said.
“I kind of like the terms … ‘just-in-time’ that we’re all familiar with — versus the ‘just-in-case,'” Fischer said. “That [if] something happens now, can I rely on your supply chain and availability of product?”
For decades, businesses have embraced “just-in-time” practices that involve making and shipping things at the last minute. That saves money on warehouses, but there’s little room for error in a supply chain that can buckle if a delivery to a plant is just hours off-schedule.
If you’re having toilet paper delivered to your house in a cardboard box and skipping the store altogether, it’s possible that’s a Georgia-Pacific product packaged in a WestRock product. (Both are headquartered in Atlanta.)
WestRock CEO Steven Vorhees said he likes the “just-in-case” descriptor. Long before COVID-19, his company was already adjusting to a world with more e-commerce.
“I think the supply chains, overall, will have to be much more nimble and resilient in order to meet the needs of our customer,” Vorhees said.
And this year has proven customers’ demands can break a supply chain that’s stretched to the limit. Brick-and-mortar stores weren’t spared.
The way demand took off for paper towels, tissues and disinfecting wipes when the COVID-19 crisis hit “was unlike anything, any of us had ever seen, or could even imagine,” said Walmart President and CEO Doug McMillon.
“We saw a spike in paper before we saw a spike in food,” McMillon said. “With many of our paper products, we were selling more in two or three hours than we would normally sell in two or three days.”
Georgia’s forest product supply chain has, broadly speaking, kept running during the pandemic, from, say a south Georgia timber stand to a Macon diaper factory to a metro Atlanta store shelf.
The timber industry was listed among those that shouldn’t shut down, in a federal list of “essential critical infrastructure workers” issued as advice to states.