KNOXVILLE, Tenn. (WATE) — If you have noticed empty shelves and some of your favorite items missing from stores, there is an explanation for why.
Supply chain management professor at the University of Tennessee and member of the Bruce Chair of Excellence, Ted Stank, explains why the stock market is experiencing flucuations.
Stank believes this issue began during the pandemic, when people stopped paying for services and started focusing on goods. The general public started prioritizing what they could do from home and what they could order, rather than where they could go.
During this time, the demand for goods skyrocketed, leaving the suppliers in a shortage.
“A lot of areas we weren’t expecting major demand increases in, and then saw overnight major increases that suppliers hadn’t planned for,” said Stank. “It’s just crazy swings in demand that the system was not atuned to accomodate for.”
The supply side of the market experienced difficulties as well.
“We had demand going crazy and right where are suppliers were, China was shutting down all of their factories because of the pandemic,” said Stank. “United States distribution and manufactoring facilities were shut down, supply capacity dropped off right when the demand wave hit.”
Stank explains domestic foods are affected by this as well. While food can be grown, trucks are still needed to deliver these domestic foods to their designated markets.
“We have a critical shortage of truck drivers in the United States, it was happening before the pandemic and it’s even worse now,” said Stank. “All companies are having problems finding people to go to work.”
While nobody can provide a definitive answer as to when these shortages will be resolved, Stank believes that expenditures should begin normalizing around the summer months, if there is not another surge of COVID.
“If we have another surge, I think you add 4 to 6 months to that timeline,” said Stank.
Stank believes that there has been one benefit from the past two years, more people and businesses paying attention the the impact supply chains can have. He hopes to see more local and federal governments paying more attention to regulations and investments in supply chain activity.