Dexter Mill: The Supply Chain Remedy Nobody is Talking About
By Doug Marrin, STN Reporter
So, now we’re facing supply chain issues. Will these pandemic problems never end?
It may seem not. And as we’re quickly learning, while we’re in this mess, we have to rethink many things, like how to get our stuff.
In discussing the current state of affairs with the team at the Dexter Mill, they shared a surprising solution that they’ve found to supply chain shortages, a fix that perhaps we really should be doing anyway.
My first question was whether local farmers were having any problems getting feed for their animals. Dexter Mill owner Keri Bushaw put that concern to rest immediately. No animals are going hungry around Dexter.
“We get a lot of our grain locally,” says Keri. “And the United States grows a surplus of animal feed to export a lot of it overseas, so the supply of grain is not an issue.”
But for those large commercial farms that make a living by exporting their crops, the supply chain problems are working against them in reverse.
“Ships are in such a hurry to get back to Asia after finally unloading that they’re leaving empty,” says Keri. “They’re not waiting for farmers to load product.”
That problem, however, is mainly for the large farm out west and up in Canada. Closer to home here in Dexter, the Mill has faced a few supply chain issues like other area retailers. The problems mainly involve products shipped in from overseas such as many of the gardening supplies and clothing. Carhart has struggled to get its product to retailers such as the Dexter Mill.
“When COVID hit, Carhart quickly reduced production thinking it wouldn’t sell,” explains Kelly Young, one of the Mill’s purchasers. “But demand remained high, creating a shortage. And now, much of the product Carhart can provide is slowed down by the clog in the west coast harbors.”
To remedy the supply chain problems it faced, the Dexter Mill turned to something they have always done. The Mill has always been USA-centric when it comes to what it sells. When garden supplies became a problem, the Mill switched to USA manufacturers. The same for clothing.
“We brought in a lot of Stormy Kromer clothing which is made in Michigan, and they have a good supply,” says Keri.
The same holds true for socks, pet toys, pet treats, and other items. If it is made in the USA, it is pretty much available.
“West Paw dog toys have really benefitted from the pandemic because they are made in Montana from recycled plastic,” adds Keri.
The Dexter Mill also sells locally sourced foods such as a variety of meats from Washtenaw Meats. If you haven’t browsed inside the Dexter Mill lately, it might be well worth a visit.
Kerry McGuire, the bookkeeper for the Dexter Mill, explains that freight prices have contributed to the supply chain problem by skyrocketing. And in addition to the soaring prices, freight surcharges are being added. Goods advertised with free shipping are adding extra charges to offset the higher freight charges from overseas.
This is a problem for larger national companies as well. Traeger grill company CEO Jeremy Andrus recently told CNBC’s Jim Cramer about his company's rising shipping expenses.
“Bringing a 40-foot container from Asia to the U.S. 12 months ago was about $1,500. Today, you’re spending upwards of $30,000, and we’re certainly averaging close to $10,000,” Andrus said in the interview.
Traeger’s sales were up in the third quarter from last year, but gross profit margin steeply declined as a result.
Goya Foods CEO Bob Unanue also stated the same problem in an interview on Fox Business.
"We bring products like coconut water from Thailand [and] from Vietnam and a container with about 1300 cases of coconut water in it used to cost about $1800, $1.40 a case; it’s gone up to $20,000 to get on a container ship if you can," he noted.
For the Dexter Mill, it is further confirmation and incentive to find sources closer to home. It only makes sense—the shorter the distance, the less labor and transportation costs. Fewer exchanges beget fewer markups. And, the money circulates here rather than getting exported overseas.
“I think the fact that we’ve always focused on American-made has helped us overall,” says Keri Bushaw. “The key is to shorten your supply chain. Shop local with an awareness that you’re buying things made in the U.S., made in Michigan, made in Dexter.”
Photos: Doug Marrin