Like other manufacturers struggling with shaky supply chains, sports vehicle maker Polaris Inc.

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is deciding what to produce based on the parts he has.

Polaris is changing its on-the-fly manufacturing and sales strategies to address material and parts shortages and an unreliable global transportation system that has disrupted precise production planning.

The company said it juggles around 30 supply chain constraints for its all-terrain vehicles, motorcycles, snowmobiles, boats and all-terrain utility vehicles. Polaris changes its plans sometimes daily for what it produces. The company changes models for a while as procurement and logistics managers search for parts and materials for other models it is unable to build.

A Polaris shift supervisor reports during a production meeting at the company’s manufacturing and assembly plant in Roseau, Minn.

When there are not enough seats in the supply pipeline to produce four-seater versions of all-terrain vehicles due to a lack of foam padding, for example, Polaris shifts production to models at two or three places. When more seats become available, factories revert to four-seater models or add missing seats to vehicles that have already been assembled.

“If you mix and match, you’ll end up with a good mix of products,” said Kenneth Pucel, chief operating officer of the Medina, Minnesota-based company.

Companies have spent decades conditioning their supply chains to deliver just enough components and materials to match production schedules to reduce the costs of parts storage. The lack of spare parts inventory left manufacturers at greater risk if a few large suppliers could not deliver on time.

Tense markets generally offer some businesses the opportunity to turn customers away from their competitors. But retailers say supply chain disruptions, transportation bottlenecks and labor shortages for manufacturers are now so widespread that it’s hard for anyone to capitalize on. Polaris dealers sold out and the company was unable to restock them to their normal level; instead, customers now place deposits on orders sent to factories.

Polaris shipped snowmobiles to dealerships without shocks and had them installed later when the supplies were collected.

Chris Watts, owner of America’s Motor Sports dealership in Nashville, TN, said he sells Polaris and other brands. But its stocks of these brands are also exhausted. “Customers buy anything they can get their hands on,” Watts said.

Like many manufacturers, Polaris experienced an unexpected increase in sales during the Covid-19 pandemic. When restaurants, movie theaters, and fitness centers closed, consumers shifted their spending to boats, motorcycles, all-terrain vehicles, and other outdoor vehicles. Last year, Polaris’ retail sales in North America increased 25% from 2019 and 70% in the first quarter compared to last year.

Polaris, which achieved sales of $ 7 billion last year, has a leading market share in off-road vehicles with about 40% of the North American market, industry analysts say.

Before the pandemic, Polaris could increase orders to its parts suppliers when needed. But this time the suppliers were less responsive. After a week-long factory shutdown last spring to slow the spread of the Covid-19 virus, available stocks were exhausted. To make matters worse, clogged ocean ports, the abnormal winter storm that hit Texas in February and a ship blocking the Suez Canal that delayed ships carrying shipping containers with Polaris parts and products from from Asia.

Polaris said it has designed workarounds to ease the company’s reliance on more difficult-to-obtain components, including semiconductor chips used in vehicle gauges. The company said its engineers redesigned the on-the-fly gauges to work with different chipsets that were more readily available than the chips the company was using.

When the foam supply for the seats tightened following the Texas storm in February, Polaris built vehicles without seats for weeks and installed them later when the resin to make plastic foam ran out. became available again.

About a third of vehicles coming off the company’s assembly lines are held up until the missing parts arrive, the company said. This is about double the volume of new vehicles that typically need to be reworked.

An Indy-style snowmobile is on display in the Roseau factory hall, while snowmobiles and ATVs await shipment outside.

The availability of shock absorbers has been particularly irregular. When the snowmobile shocks ran out during the fall production season, Polaris shipped snowmobiles to dealerships without them and sent the shocks in later for dealers to install.

“It was not cost effective, but it saved us time,” said Managing Director Michael Speetzen.

Shocks for single-seat all-terrain vehicles became so scarce late last year that production officials at the Roseau, Minnesota plant switched to a two-seater variant of the four-wheeled motorcycles. wheels instead that used different but available suspension components. The plant’s production lines that welded the metal frames and produced plastic moldings for the ATVs were reset overnight to allow production of the two-seater models to begin the next morning.

“You move away from parts shortages. Our team is good at building what we can, ”said Mr. Pucel.

Mr Pucel said at least 10% of the company’s suppliers have been under pressure since the pandemic, often struggling to get enough materials from their own suppliers or to find the money to purchase additional equipment to scale up. the production. He said the number of struggling suppliers would be greater if Polaris had not eliminated underperforming companies from its supplier base a few years before the pandemic.

A worker assembles control and shock arms on the plant’s ATV assembly line.

Polaris stepped in to purchase equipment and materials for some vendors in exchange for reduced prices. When plastic resin production in Texas shut down due to the February storm, Polaris allocated some of its own resin to its suppliers.

In anticipation of increased and prolonged demand, Polaris is expanding its plant in Monterrey, Mexico, where some of its most popular off-road utility vehicles are assembled. The company is increasing boat production at its plant in Elkhart, Indiana, and reopening another in Syracuse, Indiana. It hired approximately 1,000 additional employees in the past year, a 7% increase in the workforce.

Equipment maintenance and urgent work to realign assembly lines to produce different models often occur overnight or on weekends. Production disruptions and social distancing procedures at factories due to Covid-19 have been tough on employees.

“The entire organization has been on high alert,” CEO Speetzen said. “This is one of the things that worries me.”

A worker checks an ATV part created by an injection molding machine at the Polaris factory.

Write to Bob Tita at robert.tita@wsj.com

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