Manufacturers across multiple sectors have worked to increase inventory to match rising demand for their products. But because of supply chain challenges in the current market, doing so is more easily said than done.

Clorox's net inventory grew nearly 51% YoY to reach $688 million in its most recent earnings cycle — the company has raced to keep up with elevated demand for its cleaning products during the pandemic. And 3M's inventory grew by almost 6% YoY to reach $4.45 billion. But Sherwin-Williams' inventory shrank more than 5%, and executives said its inventory growth was below its expectations.

Clorox has been working for months to increase inventory. It stepped up production on specific lines and facilities in an attempt to meet demand and named capacity as a key priority. 

"Our teams continue to look for every opportunity to expand our production capacity, while recognizing the ongoing volatility this creates on our extended supply chain," Clorox CFO Kevin Jacobsen said last month.

Despite these investments, Clorox hasn't been able to match demand in multiple segments.

"As with wipes and sprays, our supply chains have not caught up with demand in Brita, particularly for filters and impacting our shares and sales," Vice President of Investor Relations at Clorox ​Lisah Burhan said. "On a positive note, we're continuing to make progress in addressing these supply issues, which has already helped us begin to recover share."

Manufacturing inventories have been fairly volatile over the last few months. Inventory levels contracted in February, grew in March and went back to contracting in April, according to the Institute for Supply Management's manufacturing report.

But as inventories oscillate between growing and shrinking, demand has remained. The ISM backlog of orders index has been in growth territory for the last 10 months, and it expanded at a faster rate in April.

The combination of a growing backlog and low inventory means that manufacturers will be working hard to fulfill those orders, ISM Manufacturing Business Survey Committee Chair Timothy Fiore said on a press call Monday.

"Inventory accounts will need to be rebuilt and backlog burned down even when the orders slow," Fiore said.

He noted that April's inventory contraction can largely be pegged on suppliers struggling with transportation and labor availability.

"Demand continues to be very strong. Supply chain delays hamper our availability and ability to sell more," an ISM panelist company said in the April report.

3M and Sherwin-Williams cited a third issue: the availability of raw materials.

Sherwin-Williams is experiencing these issues at a time when its sales rose more than 12% YoY in the quarter.

"We have been highly proactive in managing the supply chain disruptions to minimize the impact on our customers," Sherwin-Williams CEO ​John Morikis said on the company's earnings call last week. "We expect to be in a similar mode throughout the summer months, as reduced raw material availability resulted in lower-than-anticipated inventory build during our first quarter."

3M said it expected raw material prices to result in a hit to its margins of 75 to 125 basis points.

"We are taking multiple actions to address these increased headwinds including price increases, global sourcing efforts, improving yields in our factories, and ongoing demand planning given the dynamic environment," 3M CFO Monish Patolawala said on the company's earnings call. "We expect these actions will gain traction as we move through the year, particularly in the second half."

And 3M is leaning on new cloud technologies "to provide better insights into our global workflows," according to CEO Michael Roman.

For Clorox, meeting the demand will require work with the company's suppliers, CEO Linda Rendle said.

"We're pulling every lever available to us to improve supply, including working with third-party supply sources as we continue to run flat out," Rendle said.