The Supply Chain Crisis – What Is It?
The world is abuzz about the global supply chain crisis in the post-COVID economy.
By: Andrew Moran | October 19, 2021 | 534 Words
Got beef? Where’s the toilet paper? How can a problem in Vietnam impact a store in Biloxi, Mississippi? Since the start of the COVID pandemic, common items have gone missing from store shelves. Disruptions to the global supply chain have caused shortages of items from food to gasoline to shoes. What has gone wrong, and what is a supply chain?
The Global Supply Chain: A Primer
These days, most of the items we buy are not made on our own land, or even in our own town or country. Today we have a global marketplace, where people buy things from other continents, companies have factories overseas, and goods need to be transported across the world. This takes a lot of coordination to get right.
There are lots of different stages that items have to go through, before they get to your local store. This is called a “supply chain” because there are lots of links that have to join together properly to get supplies from the producer to the consumer. If the chain is broken, it can cause delays.
First, someone has to manufacture an item – this can involve using resources from all across the planet. Whether it is gold from South Africa or semiconductors from Taiwan, a desktop computer has a lot of elements from all over the world.
Then the item may have to be packaged somewhere else. Then the item is transported, either to another part of the country, or to another country. Then there are truck drivers to transport the items to a store.
Why has the supply chain been disrupted?
The Disruption of the Supply Chain
Since there are so many stages in a supply chain, there are lots of places where things can go wrong – and this ends up affecting the whole chain.
Now that the global economy is reopening as everyone waves goodbye to the coronavirus pandemic, demand has increased, leaving many industries unable to cope.
During the lockdowns, people weren’t buying much. Businesses were forced to make less because there wasn’t much demand for their products, or because of local lockdowns and rules. Now, the economy is revving up again, but it isn’t going very smoothly.
It is like Black Friday when people rush to stores all at once trying to get their hands on the latest videogame console or a new toaster before they’re all gone.
Production was reduced during the pandemic, and now that demand is high again, it will take time for industries to catch up. The problems have been made worse by traffic jams at seaports and a lack of ships and containers.
Toilet Paper, Where Art Thou?
Many products and raw materials are imported from across the globe. When there are problems in the global supply chain, the United States will see empty store shelves and rising prices.
How long could the supply chain problem last? Experts are saying it will continue through 2022.