Barnes Bullets factory
Barnes Bullets factory shipping (Dan Z for TTAG)
Previous Post
Next Post

By Andrew Balthrop, Ron Gordon, and Doug Voss

During the two years that COVID-19 has altered American life, we have seen shortages of goods ranging from toilet paper and N95 masks to semiconductors and new cars. The supply chain disruptions that fueled those shortages often followed a general pattern.

  • Unexpected demand caused booming sales for a given product.
  • Retailers and manufacturers depleted their inventories of that product.
  • Supply chain bottlenecks such as temporary Covid-related factory closures or delayed shipments prevented firms from replenishing their inventories, leading to stockouts, rationing, and higher prices.
  • With their resources and options limited, manufacturers and retailers streamlined their offerings, focusing on their most popular products while abandoning niche items.

While gun and ammunition supply chains are unique in some ways, they have experienced many of the same problems and trends seen in other industries during the pandemic.

Below, we examine how gun and ammo supply chains performed in the face of massive demand and outline supply chain principles that will help gun owners prepare for future shortages.

Firearm Supply Chains

Guns

When uncertainty looms, demand for guns surges. Anxiety over election outcomes, civil unrest, and increasing crime rates all fuel demand spikes. In fact, the connection between gun prices and the federal election cycle is strong and predictable enough to be classified as an economic law. But the COVID-19 pandemic raised the bar considerably.

Many gun buyers seem worried that the exponential spread of COVID-19 will lead to a season of hard-to-find essentials — of illness-related disruptions in the grocery supply chain — with angry have-nots out to steal from the haves.

From the Washington Post . . .

Speaking to the Charlotte Observer, a North Carolina [firearms retailer] said, “Our new motto is, ‘Dedicated to helping you protect your toilet paper.’”

The coronavirus, supply chain disruptions, social unrest, federal economic stimulus, and a lockdown-fueled spike in durable goods spending caused unprecedented demand for guns. FBI mandatory background check records dating back to 1998 show that 2020 and 2021 saw eight of the ten busiest days for background checks and nine of the ten busiest weeks. More than 5 million Americans became first-time gun owners between January 2020 and April 2021.

While some supply chains would have buckled under such pressure — particularly during a global pandemic — the American firearms supply chain performed fairly well. Prices rose, but that was inevitable given record demand. And though some retailers experienced stockouts of popular models, they were often able to offer satisfactory alternatives from various domestic and foreign manufacturers. The robust secondary market for used guns acted as a final backstop for buyers.

Ammunition

While consumers were able to buy guns without too much hassle, finding ammunition proved far more difficult. This is a classic example of how fluctuations can be magnified through a supply chain.

empty ammo ammunition shelf shelves
A sign in front of an empty bullet display case informs customers of purchase limits on gun ammunition at a Walmart store in Rochester, New York, on Monday, May 3, 2021. (AP Photo/Ted Shaffrey)

Changes in firearm demand cause even larger changes in ammunition sales. Firearms are durable goods that can be passed down for generations if correctly maintained. And though ammunition has a long shelf life if properly stored, a marksman may go through hundreds of rounds with a single gun during a visit to the range, so each gun sale causes demand for many more bullets.

As new and longtime gun owners reacted to the pandemic’s uncertainty by stocking up on hundreds or thousands of rounds — and media reports about bare gun store shelves fanned the flames — ammunition manufacturers could not meet the demand.

Several factors contributed to the ammunition shortage. For example, while there are dozens of American ammo manufacturers, only four produced primers when the pandemic began. With domestic primer production capacity stretched to its limits and a primer shortage serving as a bottleneck to ammo production, some manufacturers began the lengthy process of sourcing and importing European and Asian-manufactured primers.

Manufacturing and shipping disruptions also interrupted the flow of foreign-made ammunition into the country. And while imports of Russian ammo helped mitigate the shortage early on, the Biden administration restricted those imports in September 2021 as part of its sanctions against Russia for the poisoning of Alexei Navalny, a vocal critic of Vladimir Putin.

Image by Boch for TTAG/GSL.

While the shortage affected all types of ammunition, eventually popular calibers like 9mm handgun bullets and .223 rifle cartridges were easier to find than some of their more obscure counterparts.

This reduction in product variety (so-called “SKU reduction”) is a typical coping mechanism for stressed supply chains. Managers allocate scarce production capacity to their most popular offerings. You have probably noticed this in your local grocery store: while your favorite brands are still on the shelf, fewer sizes or flavors are available.

The shortage was amplified by ammunition manufacturers’ reluctance to invest too heavily in new productive capacity to meet record demand that will eventually wane. Firms in other industries made similar calculations during the pandemic, but few industries have experienced the severe “boom or bust” cycles ammo companies have seen in recent decades.

Executives who saw massive demand during Barack Obama’s presidency give way to a four-year long “Trump slump” know full well that this too shall pass.

Additionally, it is not too conspiratorial to fault big business collusion for the shortage. Two entities — Olin Corporation and Vista Outdoor — own most major American ammunition companies, so it was fairly easy to unify the industry in choosing “market stability” (and high prices) over new and risky investment in production capacity.

Supply Chain Principles for Gun Owners

The pandemic has dramatically raised public awareness that supply chains exist and can be disrupted. While that was not news to longtime gun enthusiasts who have experienced previous ammunition shortages, we will highlight a few core principles of supply chain management that should help all gun owners weather the next shortage, whenever it may come.

  • Flexibility – When the pandemic began, companies who were able to quickly adjust their manufacturing, sourcing, product development, and shipping plans fared much better than their inflexible competitors. During an ammunition shortage, those who own guns of various calibers and those who have firearms with interchangeable barrels that can accept multiple kinds of ammunition are much better positioned than those who rely on a single type of ammo.
  • Demand Forecasting – Retailers and manufacturers plan their yearly operations using demand data from recent years (though that historical data had little value during what will hopefully be a once-in-a-century pandemic). Once the current shortage ends, recent history suggests that demand will go up when a Democrat is president and down when a Republican is in office. Given ammunition’s long shelf life, it makes sense to stock up when low demand drives down prices.
  • Inventory Management – Just-in-time inventory management is a thing of beauty when it works well, as it generally did during the three decades preceding the pandemic. But recent supply chain disruptions have led some firms to take more of a just-in-case inventory approach that involves holding more safety stock. Gun owners may be wise to follow this trend as well, and keep a bit of extra ammo on hand just-in-case.
  • Procurement Diversity – The pandemic has shown companies the dangers of relying on one region, country, or factory to provide key inputs. Similarly, the ammunition shortage shows that it is important for gun owners to build relationships with fellow enthusiasts and multiple shop owners whom they can rely upon when the next shortage hits.
Ammunition cans
Bigstock

A final principle for gun owners is to adopt a strategy of total quality management—of pursuing excellence at each stage of the supply chain, from gun and ammunition purchase to firearm cleaning and maintenance after a day at the range.

In the end, the purpose of the firearms supply chain is “rounds on target.” This requires excellence in marksmanship, which in turn requires excellence in training and equipment. Higher-order competence in “delivery” cannot exist without competence in the earlier stages of the supply chain: procurement, and inventory management.

 

Andrew Balthrop is a research assistant at the University of Arkansas Sam M. Walton College of Business. Ron Gordon is a Supply Chain Communications Specialist at the University of Arkansas Sam M. Walton College of Business. Doug Voss is a Professor of Logistics and Supply Chain Management at the University of Central Arkansas. 

Previous Post
Next Post

45 COMMENTS

  1. I started doing this during the 80’s when cheap military surplus ammo was available. Been doing it ever since. You can never cache to much ammo. As long as you do it correctly it can have an indefinite shelf life.

    • That’s….not entirely true.

      When you have trouble circumnavigating your entire home, you might should get out and shoot some, and stack deep a little less. =D

      • I have it cached in several locations both above and below ground. Where it has been easy to check on. I did have to reinforce the floor under the gun room because of the weight of the safes with the ammo in them and other goodies. I shoot the older military surplus stuff on occasion. As needed after checking on it. As the saying goes…There are only 2 times when you have too much ammo. When you are swimming and/or on fire.

  2. My biggest question is why .44magnum and .357magnum are so hard to find. And for that matter, .45LColt.

    • JP, for the reason the author stated. During the shortage the manufacturers concentrated on the calibers most in demand. It makes sense.

    • I would guess that Customer A would see some boxes on the shelf placed there from a recent shipment and buy them all (every retailer I’ve visited in person has had limits of 3 to 5 boxes per customer, but that is easily circumvented at larger stores such as Bass Pro or Turner’s via two separate “in and out” visits or having a buddy go with you and buy 5 more for you). So a shipment of 10 boxes of .357 Mag can easily be taken by Customer A within minutes of its appearance on the shelf, leaving nothing for Customer B who comes in a short time later.

      One time, I personally witnessed an employee taking a pallet (on a pallet jack) of ammo that had just been received at the store to the ammo shelves, accompanied by a manager. I was curious to know what might be available, so I casually followed them. Four more men did the same, and within five minutes of the ammo reaching the shelving area, there were several customers assembled. The manager oversaw the distribution of the ammo (enforcing the store’s quantity limits) and it was all gone in literally minutes. If there was any .357 Mag, for example, and a hungry customer came into the store only ten minutes afterward, he would have missed the opportunity. The manager told me it might be another entire week before the next shipment came, and he had no control or foreknowledge of what would be delivered.

      Next time the political winds are favorable, buy ’em and stack ’em deep.

      • I was at Walmart a couple weeks ago and noticed that they had the .22lr Federal Bulk packs (325 rounds now, not 550), so I bought three (the limit).
        I noticed they had a couple boxes of .270 win on the shelf. The clerk himself suggested I run out to the car and drop off the .22 ammo and come back immediately to get the .270 (which he said he very rarely sees these days).

        I did.

        The price of both .270 and .22 is up about 50% from pre-covid, but not bad these days I guess.

        Thanks Resident Brandon 🙄

    • Most of the new gun owners purchased semi-autos in calibers like 9mm, 45acp,5.56 and maybe 308. As such that is where the greatest demand would be and where manufacturing choose to focus. I finally managed to get my hands on 44 mag brass so I hope it’s going to get easier to find going forward but who really knows.

  3. I pointed this out two years ago.

    At this point you’ll see some easing in availability but I suspect the current, slightly elevated, prices are a dip that will not last and prices will again go up due to shipping issues and other concerns such as India banning the export of wheat adding to other social “tensions”.

    • I agree. Many Governments, especially those in NATO, will be stocking up on Ammo, and of course, our Gun & Ammo Industry will be forced via regulation policies on their manufacturing licenses, to meet those demands.

      • Unlikely to occur to Obiden admin to fill the ASP bunkers. They gave away most of the US stocks of Javelin (which were limited to begin with) without bothering to order replacements. Apparently automatic reorder is not a thing for DOD (as run by demtards).

        • “They gave away most of the US stocks of Javelin (which were limited to begin with) without bothering to order replacements.”

          What’s strangling the maker is not the lack of orders, it’s the two-year lead time on crucial components. It would not surprise me if discussions are ongoing with some of the major international missile makers about producing licensed copies…

      • The world is in the early stage of WWIII . Global food shortages are starting. The global distribution system of almost everything is grinding and breaking down.

        It is intentional

        I’m expecting things to get worse over time. It would be great if things went back to normal, but I highly doubt it.

  4. “…and new cars.”

    I could buy a shiny new F150 at the local Ford lot (apologies to possum & kin), and it’s in stock, but there it will stay for 6 months or more, while they wait for a couple missing computer modules to arrive. A shortage of teeny little microchips is the cause. I’ve been waiting nearly 3 months for a GM remanufactured 5.3 engine, with a dead truck in my parking lot. I often have to check 2-3 parts stores to put together a brake job, and my cash customers are bringing 50s instead of what used to take 20s, with the difference going to someone above me in the supply chain. People ask me about where and what kind of used car to buy, and I tell them to prepare to pay 50% more than they think it’s worth for something I may not normally recommend. The only folks doing well are the pols, but that’s by design.

    • Ehhhh…I bought some 9mm defense ammo today at Cabelas in Indiana. And combined my mini trip with some food shopping nearby. I saw the boo-lits I bought were a buck cheaper at the LGS farther south but out of my way. I paid $4.75/gallon for gasoline yesterday and saving a buck a box made no sense burning more than a gallon. I’m doing well with my stash as I stocked up when everything was c h e a p.

  5. I could never understand a former co-workers fixation with buying a boutique-caliber rifle during the worst days of the panic/pandemic. He doesn’t reload, either, so that put him even further behind the curve.

    He’s still got that rifle but doesn’t shoot it as he’s down to one or two boxes of ammo for it and cannot find more at least not more for less than $50+ a box of 20 rounds.

    I’ve also seen an increase in the number of people who show up to the public range looking for (again) brass in boutique calibers. There is none to be had. Most people don’t shoot Grendel, Creemor, 300AAC etc. and those that do keep their brass regardless of whether or not they reload. There’s 9mm and .223 brass (and steel cased cases) all day long but brass for 38/357/380/44/45LC/10mm/Grendel/Creedmor/300AAC and even 308 can be very hard or impossible to find.

  6. The firearms industry in general will have easier time dealing with it all simply because so much is made in the US. Much isn’t but a huge portion is made here. The chip shortage would not be such an issue if they were manufactured in the USA. Even though certain specific metals are more plentiful in other parts of the world. We can weather through storms like Covid but it becomes a Greek tragedy when the primary ingredient is outsourced. The whole world was shut down. This affected so many products primarily because they are shipped in from other countries.

    One fantastic example is all the fruit that is grown oversees when we have plenty of farmers here that can handle it. If government would just get out of the way.

    • We might have plenty of farmers that would be willing to grow that fruit, but the weather won’t permit it. At least not all year ’round. A vast amount of our produce comes from elsewhere because we can’t provide it locally in the winter. Of course, it’s not winter in those other places when it’s winter here.

      Better farming is one reason we have such an abundance of food in our country. But better logistics is the big reason you don’t have to wait for bananas and oranges and apples to be in season.

    • The “reluctant to invest in equipment” is invalid. One of the reasons stated for the shortage of ammunition is that there are so many new gun owners that increases the demand.

      Well, if all the new gun owners are out shooting their newly acquired firearms, it seems to me thinking that the demand will die down is kind of short-circuited thinking. 1000 nw gun owners. Even if they only buy one box of ammo a year, that is demand for 1,000 new boxes of ammo that didn’t exist before the panic gun buying. Perhaps it would behoove ammo manufacturers to read about what is happening in the gun industry. It’s a simple methodology taught in business school called market research and analysis. Before I get a whole lot of sarcasm about 1,00 new gun owners, I know the figure is reported to be in the hundreds of thousands but there really is no way of tracking who is a new gun owner and who isn’t. Is some survey company calling random folks asking them if they are new gun owners? If I got such a call, my answer might not be correct.

  7. The JIT, just in time, supply chain is not something I prescribe to. I keep a stock of what I need, food, water, ammo, medications, etc. I would have more stock but there are constraints where I can store things. At a minimum everyone should have a 3 month stock of food, water and medications on hand. Ammo, that is a personal call, how much hunting, range time and how often do you rotate your self defense ammo? All factors you should consider.

    • ft3 required for a heck of an ammo stockpile is pretty dang small compared to TP, water, food. Ammo and water its a good idea to consider floor load.

    • “The JIT, just in time, supply chain is not something I prescribe to.”

      With damn good reason!

      The owner of a company I worked for 20 years back read about ‘just in time’ manufacturing in a finance magazine of some sort and was all hot-to-trot to implement it in her company.

      It took some time to talk her out of it. I told her while we could (with a little work) hold up our end, we could not count on our suppliers to WITHOUT FAIL deliver to our production line what was needed. I had to paint a stark picture of her production line frozen with her paying her hourly employees standing around doing nothing because one supplier failed to show up on time.

      It works (mostly) in Japan because they understand a sense of urgency to perform as contracted. That simply doesn’t compute to the average lackadaisical American employee…

    • One key is: you can do JIT logistics when you already have a stockpile.
      If you, say, buy 1,000 rounds of 9mm because that’s what you shoot in a year, then you buy 100 rounds every time you go shoot 100 rounds, you’re getting some of the advantage of JIT inventory, backed by a robust “pad” so you can absorb the times when you can NOT get your JIT ammo.

  8. Dear Customers,
    We sent all the ammo to Ukraine because Biden said we have to and we do what we are told. Thank you for your support.
    The Woke Ammo Company.

    • I understand the sentiment and under these circumstances I can’t disagree. I would only suggest that it be considered that the US has received firearms help from other countries at various points in history. We have always made guns here but we have not always had the capacity to make them fast enough in large enough quantities to meet our needs. Such capability is actually pretty new.

  9. Next!?!
    When did this one end?
    Tons of calibers still don’t exist on shelves.
    Your already behind if ya ain’t there now

    • Yep, that was my first reaction! I have a reasonable amount of the common stuff mostly 5.56 and 9mm, but I really want a 6mm ARC rifle, and while a barrel and bolt are no big deal, the cost and availability of ammo, or even components if I wanted to reload have put a cork in that.

  10. The reloader’s supply chain is one step removed from the ammo buyer’s. Briefly, a cartridge is brass, primer, powder, projectile.

    First, the primers disappeared, then powder and projectiles. I’m left scrounging the local outdoor range for brass. Yes, I’m a “range chicken”; we “Hoover” whatever is left behind. (And proud of it! Personally, I really hate it when at practice and my back foot rolls on a bit of spent brass.)

    Since then, primers have reappeared at 5x the previous price. Powder is 2x. Projectiles? I use Federal’s and Speer’s cast-off rejects to produce practice ammo while their production lines catch up with restocking the shelves at the LGS.

    And yes, I bought a few boxes of actual personal defense ammo when times were good. The only time I use those stocks is to verify a new load – because supply chain issues. Recently, I moved from Blue Dot (unobtainium) to N350.

  11. I am also interested in firing with different Guns you have prepared for those who have a lot of enemies and are forced to keep Guns for their life safety.

  12. Between the crises (when things are calm until the next crisis), I try to pick up a box or two each payday rather than bulk buying. It doesn’t impact the ol’ wallet as hard, and gives me an excuse to visit the sporting goods store anyway. By the end of the year I have a good ample cache.

    • How I do it too. Cept my payday comes once a month.
      LOL, I picked up a box of 12guage the other day along with a shotgunm , took it out and shot it once to make sure it worked, sure was hard to stop at one but that’s the way it is.

  13. Some major ammo companies admit they are still using the same outdated machinery they bought back in the 1950’s. Lets face facts they could be producing way higher quality ammo and more ammo if they had modern updated machinery.

    American 22 rimfire ammo is so bad (pure junk) that I do not know of anyone who uses it for serious bench rest competition. Most U.S. rimfire ammo is unreliable for any defensive use as well. Misfires are the norm. This does not happen with high quality match grade foreign ammo.

    I had Remington thunderbolt ammo so oversize it would not even go into the chamber of some of my .22 rimfire firearms, it was actually that bad and I had plenty of misfires with it as well.

    Powder is scarce and selling for scalpers prices and primers are as scarce as hens teeth and are also selling for out of this world prices. The high volume shooter is priced right out of the market.

  14. British Dissertation Help is renowned for providing stellar discussion essay writing solutions as per the guidelines of the university. We have a team of expert Essay Writers to help create your Dissertation essay with accuracy and within the strict deadline. Some of the benefits of hiring us are pocket-friendly prices, unlimited free edits, round the clock online services and others.

LEAVE A REPLY

Please enter your comment!
Please enter your name here