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Behind the bookstore shelves: How supply chain interruptions impacted Notre Dame merchandise and what they mean for business at large

| Friday, February 18, 2022

Maggie Klaers | The Observer

Even Notre Dame’s signature Kelly green is not safe from supply chain issues interrupting industries across the globe.

As supply chain complications persist into 2022, the Hammes Notre Dame Bookstore confronts a number of lingering inventory challenges, including difficulties sourcing Kelly green clothing items to sell online and in stores, director of strategic initiatives Gracie Gallagher said.

Since the merchandising industry is fairly forward looking, Gallagher said the Kelly green shortage has not yet affected customers, but it might become prevalent next fall if supply chain complications prevent her team from chasing down enough of the color.

“When we’re hearing in the fall, ‘There’s no Kelly green,’ you might not necessarily notice that immediately, but you might notice it next year,” Gallagher said. “Is the supply chain going to open up enough that we can chase a little bit more with Kelly Green? Otherwise, right now, [we] don’t necessarily have the amount of Kelly green that we would normally want.”

Last football season, the bookstore also faced difficulties stocking every size, adequately staffing stores and maintaining the same volume as previous years. Customers may have been surprised when they could not find their size, or they might have noticed the bookstore looked a bit sparser than usual, Gallagher said.

While most customers were understanding, Gallagher observed many surprised reactions that Notre Dame — despite its resources and reputation — faced the same supply constraints as any other merchandising company.

“A lot of people know Notre Dame as an incredible place, a place that has very good resources and the ability to give lots of financial aid and offer top tier products in the bookstore,” Gallagher said. “The fact that the supply chain woes were impacting a place like Notre Dame was kind of surprising and humanizing to people.”

Gallagher said the bookstore also faced supply challenges for personal technology. Staff members often had to wait months longer than anticipated for computer replacements.

Business professors, including Katie Wowak, who specializes in operations analytics and supply chains at the Mendoza College of Business, also referenced the delays faced when replacing office equipment and computers. 

From a wider scope, Wowak said recent supply chain issues have spurred businesses to change the way they think about their operations and fostered new interest in formerly overlooked supply chain operations.

“I think that COVID really exposed how fragile supply chains are and how global they are,” Wowak said.

Before the pandemic, lean supply chains were the name of the game, but pandemic-induced bottlenecks have encouraged businesses to re-evaluate the low cost just-in-time inventory strategy, Wowak said.

“Companies really tried to operate lean,” Wowak said. “They don’t want to keep a lot of safety stock or excess inventory on hand because that can be expensive for them.”

Holding safety stock and excess inventory adds costs for companies, but the inability to provide products to customers in times of shortage also hurts profits, leading some firms to beef up inventory as insurance against shortages and bottlenecks.

Many manufacturing companies shut down when the pandemic struck. This included many large factories in China where COVID-19 was first discovered. Businesses with lean supply chains quickly burned through their inventory and were unable to order more input materials to solve the problem. 

At the same time, Wowak said consumer buying habits changed as people spent more time at home and demanded more household and home improvement products such as at-home fitness equipment, baking products, lumber and even toilet paper.

Manufacturing firm closures created the initial shocks to global supply chains, but a slightly different problem persists today: bottlenecks.

Wowak defines a bottleneck as a step in the supply process that has the lowest capacity or a rate limiting factor within a supply chain.

“A big component of [bottlenecks] is ports,” Wowak said. “If capacity at one portion of the supply chain is limited, that’s restricting all of the flow from upstream in the supply chain in order to get down to the consumer.”

Major ports often lack adequate space and manpower to unload products from cargo ships, Wowak said. This means the inventory lies idle inside cargo ships, unable to reach the consumers demanding it.

Gallagher said port bottlenecks shrunk and slowed inventory for the Notre Dame bookstore, especially during the initial phases of the pandemic.

“It started when we couldn’t get our shirts and sweatshirts and shoes off of the tanker ships off the coasts at various ports, and then that is just a ripple effect,” Gallagher said.

Later in the pandemic, shortages of certain products — including all things Kelly green — added on to port problems already straining bookstore inventories. 

Businesses and economists are still grappling with the question of how long these supply complications will last.

“It’s a million dollar question of how long these things will last,” Wowak said. “I think it’s going to last for an extended period of time. I don’t see timelines getting shorter at all.”

Managers see the light at the end of the tunnel for the Notre Dame bookstore and anticipate a better inventory position before the 2022 football and holiday seasons.

“We’re still seeing some of that impact, but we are getting more positive reports on the supply chain opening up more towards the end of this year,” Gallagher said. “It should be easier to get our hands on the volume of product and the kinds of product that people are used to seeing.”

In the short term, companies can try to mitigate supply issues by accumulating more inventory to buffer supply shocks and changes in demand, Wowak said. 

Gallagher said the Notre Dame bookstore maintained a buffer of inventory stored up from when people were buying less merchandise during the height of the pandemic; however, those reserves were quickly used up once stores reopened and merchandise became harder to source.

In 2021, merchandise and bookstore managers were forced to face the tough realities of supply chain limitations.

“This was hard because we could only be so proactive,” Gallagher said. “We had to be flexible in that we got products or sold products at different times of the year than we would normally.”

At one point in the middle of the football season — during an unusually warm week — the bookstore ran out of most of its warmer temperature inventory.

“We didn’t have any t-shirts. Our t-shirt volume count was so low, so we put out our winter gear, and then we got this huge shipment of t-shirts in November,” Gallagher said.

Many decisions last football season were characterized by trying to make the best of shortages and supply constraints, Gallagher added.

“It was hard to be as problem solving as we all would’ve liked to have been,” she said.

Looking for long-term solutions, Wowak said companies should start exploring plans to add more suppliers, a move which could have prevented the supply shocks that occurred when many international manufacturing hubs went dark.

“When you get additional suppliers, you kind of spread out the risk from your supply chain,” she said. “That’s a long-term fix that can help [companies] mitigate supply chain issues moving forward.”

Wowak thinks there will be a “fundamental shift” in how companies source their inputs, with many likely opting to purchase the same component from multiple suppliers, a strategy called dual or multi-sourcing. 

“I think we’re going to see companies move really away from lean operations and keep more inventory on hand,” Wowak said. “And I think we’re going to see a shift in the degree of domestic sourcing.”

Given the impactful changes on the horizon and the everyday impact of supply chain bottlenecks, Wowak said student interest in supply chains has reached a new high. 

Specifically, students have taken greater interest in the introduction process analytics course she teaches, one she believes should really be titled “supply chain management.”

“Before COVID I would always have to sell the importance of supply chain management. ‘I promise you it’s a legit thing,’” Wowak would tell her students. “And now, you don’t have to say anything. You just say ‘supply chain’ and everyone’s like, ‘Oh my gosh, yes, I totally understand.’”

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About Maggie Eastland

Maggie Eastland is an Observer Assistant Managing Editor majoring in Finance and minoring in Journalism, Education, and Democracy at Notre Dame. When she's not writing business news, you can find her reading a book, going for a run, or carrying around a bottle of Heinz ketchup.

Contact Maggie