Wednesday Special Report >>> From Nairobi to Sydney: Supply Chains are Stressed
Picture credit: Ruchindra Gunasekara
Supply chains all around the world have been crushed by the pandemic and all the restrictions and safety regulations that came with it. Shipping rates have increased exponentially, and this has made it extremely difficult for businesses to even find space onboard ships. This has affected a multitude of companies that rely upon global supply chain networks to get the materials they need.
Covid-19 has had a catastrophic effect on global supply chains. Businesses have had to stockpile resources causing shortages in many areas of the world and port congestion means that supplies and finished products take months to get shipped. However, businesses aren’t the only ones that are affected by this global supply chain crunch.
Customers are usually the ones that are on the receiving end of price spikes and supply shortages, so it is important to look at how different industries and customer groups have been affected by supply chain shortcomings.
Picture credit: Chuttersnap Unslpash
Online shopping and imports
Online shopping has boomed since the start of the pandemic. Just in the U.S alone there was an additional $105 billion revenue made due to millions of people relying on online shopping and delivery.
However, many of these customers all around the world are still dependent on the global supply chain. On August 21st an online shopper in Singapore placed an order for items from the U.S through the Amazon website. Usually, these packages arrive a week after they are ordered. His order however, took almost a month to arrive, and the order itself was just a pair of branded socks. Late deliveries have become increasingly common for customers online, making them more unreliable.
Picture credit: Christian Wiediger
Amazon had to completely restructure their approach to deliveries because of the global supply chain crunch. An Amazon spokesman commented “To serve our customers in need while also helping to ensure the safety of our associates, we’ve changed our logistics, transportation, supply chain, purchasing, and third-party seller processes to prioritise stocking and delivering items that are a higher priority for our customers”.
In Sydney, Australia’s most populated city, because of the sheer volume of orders made through online grocery shopping, some supermarkets have had to send groceries not via their normal delivery trucks, but by hiring cabs and taxis just to get all their deliveries made on time.
Parents in Nairobi struggle to find antibiotics for their child who has a ear infection, even after consulting 10 different pharmacists, none of them had any supplies. This is just one of the cases of medicine not being available when they are most needed.
Medicine and medical equipment have been extremely important throughout the pandemic, but the rise in demand combined with supply chain disruptions have made it increasingly difficult to get access to them when they are needed most.
In Mexico, the manufacturing unit of Icelandic medical supply company Össur has struggled to find supplies to make their prosthetic feet, making them unable to match the demand for people who need them. They even had to reduce their production of neck, knee and elbow braces. Resin, a polymer which is essential to make their plastic products has been in short supply, and according to Eduardo Salcedo, Össur’s global operations director, their production capacity has dropped by almost 20%.
Picture Credit: ThisisEngineering RAEng
When there are shortages in shopping centers however, are when news of this type of information goes viral. There are numerous videos online of people arguing and sometimes fighting to get the scarce resources for themselves.
In September at a Houston Ikea store, some customers appear before the store opens to try and buy a Sniglar crib, a popular item for expecting parents. But it had been sold out long ago and reshelving took a long time due to supply chain shortfalls. When the store finally opened, people could be seen sprinting into the store to try and grab one.
Picture credit: Jueun Song
As we can see the global supply chain interlinks with so many industries and customer bases. We depend on it so much that disruptions in supply chains can sometimes drive consumer behavior. Even though in this current situation some shipping companies are making ludicrous profits, much of the world has been adversely affected by the global supply chain crunch. Experts are forecasting that things will stay this way for another six months. This supply chain stress has forced companies to be innovative and find alternative ways to make sure the supply is met to the best of their ability.
September 29th 2021 | 10:15 AM