I’m no expert. But I read that during the last ammo shortage, the ammo manufacturers bought new equipment, expanded their footprint and hired new employees. By the time they got everything up and running the ammo shortage was slowing and within a few months demand diminished and they caught up and prices went lower. They made this huge investment in equipment, footprint and employees and the shortage didn’t last long enough for them to recover their added expenses. And being gun shy this time, they are not making investments this time like they did the last time. So for that reason alone (if true) the ammo shortage will last longer because they are not increasing manufacturing capabilities this time.
Again, I am regurgitating this from memory from an article I read back when this shortage was already a few months in. I could be wrong or the article could be wrong. This is just what I remember. Hopefully I remember correctly.
I took a graduate degree class for an MBA that had us do computer-guided games.
One was to budget for R&D, expansion of capital resources in a rising market, dealing with additional labor costs, etc.
One mindset is to expand permanently, planning for an ongoing increase in demand and higher prices in each revenue period.
What seemed to make the most sense (and may apply now) was the temporary mindset.
Instead of buying or building more production, storage and support services space, it's probably better to rent another factory if available,
Instead of hiring more full-time employees to work the new rented factory, try working shifts in the existing space.
Instead of hiring more full-time employees to work shifts, offer overtime to existing employees, or hire part time workers for those jobs that don't take a full shift, like working in the shipping/receiving warehouse for incoming raw materials and outgoing shipment preparation (palletizing orders, verifying order accuracy, printing shipping labels, etc.). Just need enough additional labor to handle the increase in shipping customers. Most of the product will be going to distributors, so the number of customers won't be massive.
Instead of renting and equipping a new factory space, see if another ammo factory has surplus equipment and space to lease.
When McDonald's opens a franchise in a new region, they hire bakers to make their breads, beef and poultry companies to provide meat, etc. They don't own 100% of their production chain. Ammo makers could farm out portions of their production, too. As with McD's, the quality control would be an additional cost working with 3rd parties, but cheaper than capital investment to do it all yourself.
In summary, there are always options to ramp up production without sinking a chunk of revenue/profits into capital investment. Labor is often the most expensive variable cost in any business. Shift work for 24 hour production, part time and temp workers, and overtime are all ways to avoid the cost of bringing on new workers who may be laid off in the near future.