NASHVILLE, Tenn. (WKRN) — Supply chain issues are plaguing our country right now. But, some of you may be asking what exactly is it and how does it work?
“I have heard more people say supply chain since the first of the pandemic than I have in my entire life,” said Lance Saunders, Assistant Professor of Supply Chain Management at the Haslam School of Business.
Perhaps it’s something we took for granted when things were going just fine.
“We’ve been good at saying ‘I want to have access to everything.’ Well, if you’re walking through a supermarket these days, – I’m not sure where you’re located – but in some areas those aisles are empty, and that’s a supply chain issue.” said Bill Thayer, Co-Founder, Co-CEO, Fillogic.
Supply chain is known as the cycle of producing and delivering a product or service from start to finish.
It starts with the sourcing and removal of raw materials. Then, by boat, plane, train, or automobile those materials are taken to a supplier, and next a manufacturer where they are turned into a finished product.
Then, that product moves to a distributor who will send it to a retailer who will sell it to a consumer.
Saunders said, “I think the easiest way to explain that is: you know when you were a kid you played dominos and stacked them all up, and if you take one domino out the whole chain doesn’t work.”
The dominos could represent dozens, even hundreds of companies working together to ensure you get what you want when you want it.
The entire cycle relies on supply and demand, “That’s what we do. We try to balance the supply coming in to not just store shelves, but the supplier’s supplier – supplier of who makes whatever you’re purchasing on that store shelf.” He continued, “And balancing that supply with that demand downstream is just hard ,and until it starts balancing itself out you’re going to keep seeing these things occur.’
Thayer said we are now in the midst of the biggest supply chain disruption since WWII.
“During 2020, with the beginning of what was really the first wave, all stores shut down, e-commerce grew, 10 years of growth in 18 months. So in the 2nd wave which was really the beginning of 2021, is all that pent up demand for customers that wanted to buy online. Online did not drop off, but stores opened again so all that demand that was backed up started moving toward the retailers.”
Now that all stores are open and e-commerce is still rolling that has everything exacerbated.
Thayer added, “When you look at what’s going to happen 4th quarter this year because of e commerce – the e-commerce growth that has not dissipated. There’s not enough warehouse space, not enough drivers or parcel carriers to get freight to individuals.”
And that’s why we’re seeing empty store shelves.
The best advice for consumers right now is to pack your patience as these issues could move into 2022 and stick around even for 2023.