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n e w h a v e n b i z . c o m | D e c e m b e r 2 0 2 1 | n e w h a v e n B I Z 21 New Haven-area manufacturers anticipate long-term impacts — some positive — from supply chain crisis New Reality By Liese Klein T he images of empty shelves and container-ship traffic jams over recent months have sent a strong message: e supply chain crisis is hurting American businesses and consumers. But for Guilford manufacturer George Schmitt & Co., the turmoil in global supply chains has had an unexpected silver lining. Kristen Gunther, a fih-generation executive at the specialty printer, said recent shortages in materials like paper and adhesives have forced the company to bolster communication between managers and its customers. Internal procedures have also tight- ened up, she said. "Some of the positive things that have come out of this is that you really don't have room for inefficiencies," Gunther said. "You become the most efficient and organized company that you can in order to deal with the current issues that are arising. If things get better, great. If not, you've been able to improve your processes." Even as the supply chain crisis shows some signs of easing, many Connecticut manufacturers are resigned to long-term changes in their ways of doing business as delays in shipments of crucial raw materials and components linger. At George Schmitt & Co., that means managers have been working more closely with customers, who range from pharmaceutical companies to airlines. Demand for the company's products, which include pressure-sensitive labels, shrink sleeves and RFID-embedded labels, has surged since the start of the COVID-19 pandemic, even as global supply chains stalled. Booming sec- tors like vaccine-makers and cannabis producers are also clamoring for the company's secure wrappings and other products, Gunther said. "We've engaged with our customers and our suppliers of materials much more since the supply chain issue started," Gunther said. "We've developed better forecasts and commitments to customers, which can then translate into ordering the raw materials." Within the company, workers at all levels coordinate more closely than ever to ensure that orders are filled on time, Gunther said. At the company's plants in Guilford and Florida, space has been reconfig- ured to house larger amounts of raw materials, stock- piled over months to ensure that pro- duction continues despite supply chain holdups. "ere has been some shiing around and making more space available for the amount of stock of raw materials that we need to keep in-house," Gunther said. "It's been sort of an ever-flowing process of organizing and shiing to meet the demand." Blank purchase orders as prices soar Fueled by supply chain issues, steel prices were rising so fast earlier this year that Jamison "Jamie" Scott had to take a big risk. Executive vice president at Air Handling Systems of Woodbridge, Scott signed a purchase order for a future shipment of the steel needed for his company's industrial ductwork — with a blank line where the cost should be. "e only way I could ensure I'd have material and not run out was to give them a purchase order without a price on it," Scott said. "Which is risky, but it's always worse to run out of material." Even so, the decision was a tough one: "How do you price your products if you don't know what you're going to pay for your raw materials?" Scott, who also serves as executive director of ManufactureCT, an industry group for New Haven area manufactur- ers, says many companies are facing the same dilemmas. "Every member I talk to has a story to share about how it's affecting them," Scott said. "Everybody's dealing with the same issues: rising costs, supply issues, labor issues." At Air Handling Systems, executives ordered as much steel as they could earlier this year in anticipation of rising prices. "I saw the signs," Scott said, adding he had been through several similar price spikes in the past. Now prices seem to have stabilized and prices are coming down again as more steel from Europe arrives through less congested ports on the East Coast. Manufacturers that can are also "reshoring," seeking suppliers and raw materials domestically. "We're going to be seeing more man- Jamison Scott Continued on next page Kristen Gunther is a fifth-generation executive at Guilford specialty printer George Schmitt & Co., who says the pandemic has changed the way she does business. PHOTO | CONTRIBUTED

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