There’s a Reason For Everything….

I think I finally found something that explains the reason for bare shelves at the grocery stores, and in other places.

My paper products don’t tell you anything about where they are manufactured; they only tell you who distributes them, which poses the question: Should one try recycling stuff like that?  I mean, after all, that’s what the Sears & Roebuck catalog was famous for, wasn’t it? Last year’s edition went right into the outhouse for further perusal and other uses.

Since my local newspaper wants you to subscribe to their rag if you want to read the article online, it was easier to just copy the whole thing and give the author due credit.  Whether or not you agree with her, it all sort of makes sense.

Why stores keep running out of toilet paper and other essentials

By Nada R. Sanders

Retailers are frequently running out of everything from flour and fresh meat to toilet paper and pharmaceuticals as supply chains hammered by the coronavirus struggle to keep up with stockpiling consumers.

Although out-of-stock products are usually replenished within a day or two , the sight of bare shelves typically prompts more hoarding as people fear the supply of the goods they need may be cut off. This vicious cycle is a direct result of shortcomings of modern supply chains, which most companies, regardless of industry, now use .

I believe three main characteristics of today’s supply chain are largely to blame.

1. Supply chains have become very complex

Fundamentally, a supply chain links a series of companies that make, transport, refine and deliver the finished product you buy at a retailer, restaurant or anywhere else.

Consider a cup of coffee from Starbucks. Your coffee might begin as a pile of coffee beans grown and picked by a farmer in Guatemala. They’re then shipped to a coffee roaster, say in Seattle, who then sends them on to a distributor near where you live, who sells them to your local Starbucks.

A shutdown anywhere along the supply chain in any of these locations stops this flow and could prevent you from enjoying your morning brew.

While a coffee supply chain may be relatively simple and linear, it can quickly get complicated for products that have many parts, such as an Apple iPhone. Apple actually has suppliers in 43 countries , and tracing the journey of any one component is difficult. For example, one of the chips that run an iPhone is designed in California but made in Taiwan, tested in the Philippines and then added to Apple products in China.

The result is that few global companies have complete knowledge of the locations of all the companies that provide parts to their direct suppliers.

2. A lean machine

What has made these supply chains even more vulnerable are strategies that rely heavily on “just in time” or lean inventory replenishment. That is, companies maintain only enough stock on hand for a short duration and rely on small deliveries made frequently to keep costs low.

For example, many companies keep just enough inventory to last a few weeks , confident that products will arrive as they are needed. That system works perfectly well provided there are no disruptions.

However, as companies in a wide variety of industries, including food, retail, high-tech and automotive, have increasingly implemented this strategy, they no longer have the extra inventory or excess capacity to make up for production losses caused by a disruption.

The coronavirus pandemic has virtually shut down dozens of economies, with movements of over a third of the global population restricted. This means a surge in demand for any product could easily result in shortages for days or weeks.

Having a lean inventory is a strategy with many benefits and is designed to eliminate waste and cut costs. However, many companies may have taken it too far.

         3. Moving Manufacturing Offshore

Further exacerbating the problem is the strategy of offshoring , in which companies manufacture their products overseas in countries like China, Vietnam and Malaysia in an effort to cut costs.

On the plus side, this has allowed many companies to reduce the number of links in their supply chains — or at least shrink the distance between them — by relying primarily on a smaller number of sources that are concentrated in a specific geographic area .

But in this quest to lower operating costs, including labor and overhead, more companies have put too many of their “eggs” in one basket.

As a result, disruptions in a single country become even more severe.

Of course, it makes sense that companies would do all they can to reduce costs and make their supply chains as efficient as possible.

That has made them incredibly vulnerable to disruptions, even minor ones. And the coronavirus pandemic is a disruption like no other, and undoubtedly people will continue to see temporary and longer shortages of essential goods as long as it lasts.

My biggest concern is that if COVID-19 continues to spread throughout the U.S., devastating the ranks of large meat packing plants and other factories and farms, Americans will begin to experience severe scarcity of foods and other goods.

While it’s probably too late to do much about the current crisis, I hope companies learn these lessons and adopt better strategies to manage their supply chains risks, such as by putting in place more backup suppliers and building up more inventory.

Maybe then more of them will be ready for the next disruption.

Nada R. Sanders is a distinguished professor of supply chain management at Northeastern University. This was written for The Conversation, a nonprofit news service.

I’m going back to pondering taxes now and why things are simply simpler, like they used to be. Someone suggested in the local rag that since the CoVid19 bug has shown that schools aren’t really necessary, they should all be shut down and the kids do all their school stuff from home. School sports be hanged – let the kids sleep in and turn in their homework after supper. And school  lunches? Mom can very likely fix better food than they serve the kids at school these days. I know the lunch ladies at the schools I went to all knew how to cook real food that we hungry little banshees gobbled up and then burned off on the playground.  And no one thought there was anything wrong with real butter and ice cream and real oatmeal cookies.

Category: "The Floggings Will Continue Until Morale Improves", COVID-19