Coronavirus

Charmin And Unrolling The Mystery Of The Great Toilet Paper Shortage

It has been said that a crisis reveals what people truly value, quickly separating the things that one needs to have from those that one merely wants to have.

And, given the state of grocery store shelves for the last month or so due to the coronavirus pandemic, we feel we can safely say that what American most fundamentally value is toilet paper.

Closely followed by disinfectant spray.

As most of our readers have likely noticed, since early March, toilet paper has gone from an afterthought during the weekly grocery run to the hottest consumer good in the U.S. as people start stocking up to an absurd degree.

As of last Friday, Walmart CEO Doug McMillon had confirmed that Walmart in the last five days had sold enough toilet paper to give every single American a single roll to call their own — which for those keeping score at home comes out to over 60 million rolls being sold per day.

“There’s plenty of flow coming, but if everyone could just kind of manage and buy week to week rather than stocking up at this point, it’d be helpful for everybody,” McMillon explained on the “TODAY Show.”

So, how did toilet paper get so wiped out (bad pun intended) so as to have the CEO of Walmart making the truly unprecedented move of asking people to please buy less?

The supply chain breakdown, according to most explanations, is mostly an unfortunate series of underlying factors combining into a big supply chain hiccup. Toilet paper, under normal circumstances, is a very consistently used good — within a pretty close range, manufacturers pretty much know exactly how much toilet paper is going to be purchased. Because it is also a low profit margin good, it is produced to meet the demand.

It’s a system that works fine, even in circumstances where demand suddenly spikes, say when there is a hurricane or blizzard forecast in a specific geographic area. Toilet paper manufacturers deal with surge all the time. As a Charmin representative noted in an email to PYMNTS: “We have experienced volume volatility before — this is not our first ‘rodeo.’”

But there is volatility, and there is the entire nation (and a large part of the world) working from home/being out of school (thus needing a larger personal supply of toilet paper to account for the additional eight to 10 hours a day everyone is home) and also suddenly deciding they need several months-worth of toilet paper at once.

This has put incredible pressure on the toilet paper industry. Proctor & Gamble Co. (the makers of Charmin) in particular has been hard hit because it is the nation’s largest maker of toilet paper and controls about 30 percent of the market. And ramping up production is complicated, according to The Wall Street Journal because toilet paper is actually incredibly difficult to make in bulk at scale. It requires the use of a four-story-tall machine, which costs billions of dollars to create and takes months to build. A single industrial spool can hold close to 50 miles of paper.

Luckily, Charmin noted in its email to PYMNTS, P&G didn’t have to build something new to ramp up production; instead it moved to level up amounts by 20 percent using machines that had previously been idled. The company did a ramp up in a matter of weeks that would normally have taken months.

“From a production standpoint, we are producing and shipping P&G Family Care products, including Charmin, around the clock,” the representative noted in the email. “Demand continues to outpace supply, but we are working diligently to get products to our retailers as fast as humanly possible … We are prioritizing our bestselling sizes to maximize the amount of product we can ship to retailers, and we remain focused on making sure our products are available.”

But, as the WSJ reports, Charmin has found itself managing the coronavirus’s increased need for toilet paper and other shortages the virus has brought with it.

A team of a half-dozen P&G engineers from other plants were sent to the Albany, Georgia, plant to help the company get the idled machine up and producing in about two weeks. Afterward, those engineers were left stranded in Georgia as their return flights were canceled due to the airline shutdown. P&G CEO David Taylor directed a corporate jet be sent to Georgia to retrieve the workers and take them home to Missouri and Pennsylvania.

While the engineers were ramping up production at the Albany plant, its second-largest facility in the U.S., COVID-19 broke out among workers, meaning protective measures had be increased

P&G has started producing face masks and hand sanitizer for its employees and checking workers’ temperatures at the start of their shifts and at lunchtime. Other safety measures put in place include discouraging people from congregating and staggering start and lunch times. Workers are kept 6 feet apart. All foods in the cafeteria are now prepackaged. Overtime is no more, despite needing the labor, because workers on different shifts can create more exposure in the event of infection. If any worker becomes ill, all members of their shift team are quarantined.

“It’s a lot quieter here than it used to be,” John Patterson, a 16-year veteran of the plant, told the WSJ.

Quieter according to P&G officially — but safer as a result, and thus able to stay open, stay productive and keep toilet paper and other household goods rolling off the line. It isn’t easy, and the team doesn’t anticipate it will be for some time. But as long as the need is out there, the company will keep producing toilet paper.

Or, more succinctly, as Charmin’s representative put it: “Charmin is on the way!”

——————————

New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

TRENDING RIGHT NOW