The coronavirus pandemic is revealing weak links in the global supply chain that fuels American industry, fills grocery store shelves and supplies the online mail-order businesses that deliver to our homes.
But don't worry, there should be ample toilet paper available again before long, Scott DuHadway, professor of supply chain management at Portland State University, told "Think Out Loud" on Friday.
DuHadway describes the supply chain as a globally connected network that includes farms and mines, manufacturers of simple widgets and complex equipment, and also the system that gets everything where it needs to be, including to factories, stores and homes.
“There’s this huge connected network of companies that all contribute in some way," he said.
And just as COVID-19 poses a higher risk for the most vulnerable people around us, the coronavirus pandemic is creating more challenges for the weaker links in the supply chain, said DuHadway, who called the global outbreak a “global stress test of the entire network.”
The weakest links are, in some cases, proving to be those companies that do not prioritize the health of their workers, he said.
“How do I protect my employees? How do I keep them healthy? How do I build in appropriate sick-leave pay and make sure they have health insurance?” Businesses that have not already addressed those questions are proving less able to respond to COVID-19, he said.
Companies that are most dependent on specialized products are also being hit hard, he said.
“For example, a car has a lot of different, very specific supplies that all go into making a car, each supplied by companies that are not within an automaker’s control — and there are few, if any, options for replacing needed parts if a business lower on the supply chain is unable to deliver,” he said.
Businesses that rely on more widely available commodities, meanwhile, have more alternatives when their usual vendors are disrupted.
As to the item of most concern to many people today — toilet paper — DuHadway said there’s good news there. Supply lines are not disrupted; it’s higher consumer demand at a moment of fear about the future that is leading to empty shelves.
“Traditionally, toilet paper has an incredibly stable demand pattern. We use the exact same amount of toilet paper, as a society, on a consistent basis,” DuHadway said.
“When there is a sudden spike in that demand, it takes some time for the supply chain to make that increase in production,” he said. “The good news is, they are ramping up production, so we will likely see an increase in product.”
The same is true of other products being cleared from supermarket shelves as shoppers buy more so they can cook at home and limit trips to the store, he said.
His advice for shoppers?
“When you go into the store and see products that are depleted, focus on buying products that are in excess,” such as fresh vegetables if the canned beans are sold out, he said. “Prioritizing the products that are in excess will stabilize the entire system overall.”