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How to Prepare for More Supply Chain Disruptions

November 19, 2020 0 comments

I went to an office supply store today to purchase an ink cartridge for my at-home printer. As I was searching the aisle, a sales associate approached me and told me that they are having trouble keeping the dual ink cartridge sets in stock because HP is still experiencing supply chain disruptions. It was just one more item to add to the ever-growing list of shortages. Most Americans have had a similar experience at this point.

What do ink, canned corn, patio heaters, Lysol, and medication have in common? They are all items that are hard to find due to shortages. And there are countless more. The problem with the COVID-19 supply chain disruption is that it is still disrupted, and more delays and shortages are expected with cases currently on the rise.

According to the World Economic Forum, “COVID-19 and related responses are delivering an extraordinary shock both on supply and demand sides to the global economy – by shuttering production and cutting consumption.”

However, this isn’t the first time the global supply chain has been disrupted, and it won’t be the last. By looking back at supply chain disruptions throughout history, we can understand why COVID-19 has caused so many shortages.

Supply chains throughout history

Supply and Demand Executive explains, “The following are common triggers of supply chain disruptions:

  • Natural disasters and extreme weather
  • Labor shortages
  • Import/export restrictions (sanctions)
  • Extreme volatility in commodity pricing and currency fluctuations
  • Information and communication disruptions
  • Conflict, political unrest, and terrorism.”

For example, Hurricane Katrina led to supply chain disruptions as power was knocked out and transportation routes were cut off. Much-needed supplies simply could not be brought into the ravaged area because cargo ships could not get through.

It is not merely an issue of transportation that causes supply chain disruptions. For instance, the 2011 Fukushima earthquake and tsunami resulted in major problems for supply chains. A Merck chemical plant was located in the affected area. This particular plant was the only place in the world where a certain pigment that gives cars their glittery shine was made. Since the plant was shuttered, it meant car manufacturers could not finish producing vehicles. Therefore, Ford and Chrysler could not fulfill orders.

Disruptions tend to affect geographic regions and industries; however, they tend to not last long. But, as Supply and Demand Executive points out, “All the situations mentioned earlier - fires, hurricanes, even the tsunami - were addressed and eventually people were able to move on within a few months. With COVID-19, we have had spikes and lolls around the world, but it is still with us.” Moreover, COVID-19 is not affecting one geographic region or any single industry – it is causing global disruptions.

Why COVID-19 caused the worst supply chain disruption in history

According to Supply and Demand Executive, “COVID-19 is different. Its impact on the supply chain is far more sweeping than anything ever experienced before.” Basically, the entire global chain has been affected by COVID-19, starting with manufacturing. The chain was unraveling back in January before America even started a shutdown. (Note that My Patriot Supply began seeing a rush of orders due to COVID-19 starting on 1/23/20 with three massive warehouses emptied by the first of February.)

When China went into lockdown in late January to stanch the spread of COVID-19, their manufacturing sector came to a halt. Not only did this stop the flow of certain goods into the U.S., but it also stopped the flow of components needed to assemble products in other countries.

It didn’t stop there. Not only did goods from overseas cause major disruptions, but packaging became an issue. Even if a company could produce a needed product, it didn’t mean they had access to the packaging they needed. For example, while there was plenty of flour available in the United States, brands struggled to find the paper bags flour is packed in, which led to a delay between production and shelving the product in stores. (The same happened to the heavy-duty 4-layer packaging Ready Hour foods uses with the long-term food storage items sold on My Patriot Supply.) The issues continued from packaging to transportation. Once companies manufactured and packaged products, they ran into issues with trucking companies and routes. By late spring, there was a shortage of 40,000 drivers in the U.S. according to the Wall Street Journal.

Meanwhile, if production comes to a halt because workers have the coronavirus, this further disrupts the supply chain. This was evident when meat packaging plants across the U.S. experienced widespread breakouts and were forced to close. On Sunday, April 26, 2020, Tyson Foods took out a full page in the New York Times to draw attention to a potential meat shortage as the “food supply chain is breaking.” According to the advertisement, “Millions of pounds of beef, pork and chicken will vanish from U.S. grocery stores as livestock and poultry processing plants have been shuttered by coronavirus outbreaks among workers.”

Adding in-demand items to the list, and you have even more supply chain disruptions. For example, you may not be able to buy canned corn for your holiday meals. According to Delish, “The sweet corn used for canning is only harvested once a year, and each summer, the amount that is reaped has to last for months thereafter. This past spring when individuals were stockpiling non-perishable food items with a long shelf life, many were picking up cans of sweet corn.” Popular brands, such as Del Monte and Green Giant, reportedly tried to get farmers to plant more corn to meet demand, but it was too late in the season.

Essentially, if one part of the supply chain is affected, the entire chain is disrupted. A perfect example is Lysol products, which are still hard to find. Lysol wipes contain a certain ingredient that is in high demand. CBS8 explains, “Part of the problem is that many companies make wipes using polyester spunlace, a key ingredient also used for personal protective equipment like masks and medical gowns, which is now in short supply.” Without polyester spunlace, Lysol wipes cannot be made. Since this ingredient is used in multiple in-demand products, there is a supply issue.

What grocery stores are doing differently

The supply chain has still not recovered from the first wave of COVID-19; however, grocery stores learned major lessons from the first run on supplies. Currently, grocery stores are stocking what is being called “pandemic pallets.” Pandemic pallets are wooden structures that are stockpiled with items grocery stores fear may run low during a second wave in the holiday season. They are stored in warehouses where they can be retrieved if there is a run on pandemic supplies. Grocery stores are also stocking for months at a time rather than weeks at a time.

How to prepare for supply chain disruptions

Like grocery stores, we can learn from the previous wave’s supply chain disruptions. Here are four ways to prepare for supply chain disruptions resulting from a second wave.

  • Stay aware – Stay aware so you can prepare. While you don’t need to hoard toilet paper, it is wise to have an idea of needed supplies that are dwindling. For example, experts are expecting shortages for staple medicines. Stat News reports, “The problem is likely to be exacerbated by the vagaries of the global pharmaceutical supply chain, which is heavily dependent on China for active pharmaceutical ingredients and on manufacturers based in India. As of now, 43% — or 67 of 156 — of acute care medicines used to treat various illnesses are running low. This group includes such staples as antibiotics, blood thinners, and sedatives.” Keep getting your prescriptions refilled so you don’t face shortages.
  • Think long-term – When you go shopping, think long-term. Anticipate shortages. What items can you stock long-term that may be difficult to find in the future? These are the items that you should prioritize.
  • Make substitutions – Yes, Lysol wipes are hard to find. However, you can find off-brand disinfecting wipes. If you need cleaning products, the EPA has a list of approved products.
  • Be resourceful – Similarly, if there is a major supply chain disruption and you can’t find what you need, be resourceful. For example, during the first wave of COVID-19, we found ways to bake bread without yeast. There are also household items, such as baking soda and vinegar, which you can use for a variety of cleaning tasks.

Prepare for supply chain disruptions, friends.

In liberty,

Grant Miller

Preparedness Advisor, My Patriot Supply

 

SOURCES
https://www.sdcexec.com/software-technology/article/21159890/afflink-why-covid19-is-different-from-other-supply-chain-disruptions
https://www.weforum.org/agenda/2020/03/covid-19-coronavirus-lessons-past-supply-chain-disruptions/
https://www.delish.com/food-news/a34395581/canned-corn-shortage-covid-19/
https://www.cbs8.com/article/news/investigations/your-stories-8/your-stories-why-cant-i-find-lysol-or-clorox/509-f0a5da33-5142-4d4d-a291-9b198f0325a0
https://www.statnews.com/pharmalot/2020/10/21/covid19-coronavirus-pandemic-shortages/
https://cfpub.epa.gov/giwiz/disinfectants/index.cfm
https://searcherp.techtarget.com/infographic/15-examples-of-supply-chain-disruptions-throughout-history
https://www.scmp.com/economy/china-economy/article/3052823/coronavirus-vietnam-lured-factories-during-trade-war-now
https://www.nationalgeographic.com/science/2020/05/covid-19-disrupts-complex-food-chains-beef-milk-eggs-produce/ https://www.asug.com/insights/how-covid-19-is-affecting-every-aspect-of-supply-chains
https://www.cnbc.com/2020/10/23/pwcs-tim-ryan-on-supply-chain-moves-from-china-under-biden-or-trump.html
https://www.foxbusiness.com/lifestyle/coronavirus-fears-push-more-than-half-of-u-s-consumers-into-second-wave-of-stockpiling https://www.wsj.com/articles/trucking-comes-up-short-in-search-for-young-drivers-1432071355

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