03 Mar Supply Chain Disruptions During a Pandemic. Click to keep reading…
Early on, at the start of the COVID-19 outbreak, businesses were forced to close when state mandates were enacted requiring workers to stay at home. In many cases, exemptions were granted, allowing businesses to re-open as they were deemed essential. Some businesses pivoted internal operations, recognizing the need for social distancing to protect workers from becoming infected. Administrative workers, able to perform job functions remotely, began to work from home. Employees at manufacturing plants still became infected through contact outside their workplace. Asymptomatic, contagious workers innocently brought the virus into their work space causing additional spread. This cascading effect led to more disruptions: deep cleaning, quarantining, and additional testing, with sizable costs and time loss.
Some of the causes of supply chain interruptions are blamed on weather events and not the actual pandemic. Recent examples include the winter storms in the Midwest and Texas. Unusually bitter cold temperature forced electrical power disruptions shutting off customers, based on huge demand and a lack of supply. Businesses were forced to close due to lack of electricity, or over safety concerns as employees could not navigate roadways.
Vaccine shipments were delayed based on recent weather events in many parts of the U.S. As a result, vaccination appointments were cancelled. This added stress to heavily overloaded appointment scheduling and injection sites, as re-scheduling of shots was required in numerous instances. Anyone attempting to make a vaccination appointment undoubtedly shared the frustration a program coordinator encounters trying to get answers on overdue manufacturing components. Last week, we saw cases where electronic chips were back ordered from many automotive suppliers, forcing multiple automakers to shut down vehicle production lines.
Day by day, more deliveries to manufacturers in all areas are being delayed. Material shortages are seen from plastic resin and metals, to corrugated shipping boxes and electronic components. Lead times on most materials are being increased. Recent temporary surcharges, plus significant price increases on materials, impact production costs. In turn, an equipment manufacturer must either absorb margin loss or pass along a higher cost.
All of the aforementioned supply interruptions lead to a fragmented supply chain resulting in added time and money being expended. These outlays will slow our economic recovery process and lengthen the time needed to return to normalcy. I make no predictions on when those “normal times” will return, but can’t wait!–Commentary provided by Cass Roberts, Business Development Professional