Why COVID caused so many supply chain bottlenecks in 2021 – NBC Chicago

This story originally appeared on LX.com

Tackling the supply chain scarcity seen in grocery stores, car dealerships, and more has become a part of life during the pandemic. And although we are approaching our third calendar year with COVID, the 2021 bottlenecks are showing no signs of slowing. Indeed, this Christmas shopping season is expected to be challenging due to shortages in the future.

“Around half of consumers have already started their Christmas shopping, and half of those people tell us they are sold out, both online and” [and] empty shelves in stores and seeing delays and back orders … already, ”Claire Tassin, retail and e-commerce analyst at Morning Consult, told NBCLX.

In addition, recent surveys by Morning Consult show that Millennials and Generation Z are most likely to be affected by product shortages. About 70% of Millennials and Generation Z surveyed said an item they wanted was out of stock in stores, compared to 36% of Gen X and baby boomers. When shopping online, 72% of young consumers were out of stock compared to 40% of older adults. In addition, 65% of young people said an item they had already ordered was behind or late, compared to 37% of the older generations.

What causes bottlenecks in the supply chain?

The current bottlenecks due to COVID in 2021 are partly due to consumers having extra cash because they don’t want to conveniently spend it on experiences just yet. Instead, they buy goods and drive demand up the supply chain.

“That kind of delay in recovery now has a lot to do with consumers’ reluctance to go back to normal life, very understandable because the pandemic is still very strong with us,” Tassin said. “We’re seeing growth again in people’s willingness to eat out, travel, go to the theater … and things like that. It’s just not where it was before the pandemic, and it’s likely going to be Not be there for a while. ” longer.”

Another factor is that prior to COVID, the supply chain “was not in the best shape” and “the pandemic effectively hit the entire supply chain in every way, from manufacturing to logistics to consumer demand,” she explained. “It was really a perfect storm for that to happen.”

For example, the infrastructure that the supply chain relies on is outdated, especially in ports, the trucking industry and warehouses, Columbia University professor Awi Federgruen told NBCLX storyteller Clark Fouraker. Hiring more truckers and changing the ratio of domestically manufactured to offshore manufacturing could help, but it’s “questionable whether enough could be done to make a big dent before the holiday season,” said Feather green.

Let’s take a look at some of the trending bottlenecks in the supply chain and why it feels like there is a shortage in everything.

Lack of chips

The COVID-19 pandemic has created a shortage of chips, also known as the shortage of semiconductors. A lot of everyday electronics need a semiconductor to function, but the auto industry has felt the chip shortage pretty badly. When the pandemic broke out, production facilities were closed due to lockdowns and inventories were limited. Also, 60% of semiconductors are made in Taiwan, so global supply chain disruptions and US tensions with China have exacerbated the problem. CNBC reported last month that the semiconductor chip shortage is expected to last through 2022.

Lack of food

While the U.S. Department of Agriculture is not currently reporting any nationwide food shortages, consumers are still facing shortages and delays in grocery stores across the country, according to Professor Patrick Penfield of Syracuse University. A recent Costco sign went viral for apologizing for the chicken shortage, and the chicken shortage caused KFC to stop advertising its chicken offerings on television for fear of being unable to meet excess demand, NBC News reported.

Food shortages could affect other staple foods, especially during the holidays, such as condensed milk, cooking oil, tofu, turkey, bottled water, carbonated beverages, canned food, bread, liquor and toilet paper, said Penfield, who added, “We continue to disrupt the supply chain in the entire food supply chain. “

Labor shortage

A record 4.3 million workers left their jobs in August and there are about 10.4 million open positions in the US, NBC News reported last month. In addition, the churn rate recently hit a record 2.9%.

“[Workers] have a certain ability to be a bit picky and find a job that suits them. We’ll definitely see [that] especially in retail, “said Tassin.” Many retailers need to raise wages to make these jobs more attractive. Childcare is also still a real challenge. That certainly prevents some people from returning to work. “

According to NBC News, the healthcare sector has lost more than half a million employees since the pandemic began, with a nursing staff shortage being the first. The industry was aware of the pre-pandemic care shortage due to factors such as an aging population, a wave of retiring baby boomer nurses, and fewer nurses wanting to work directly with patients. However, according to the American Association of Medical Colleges, COVID-19 has increased burnout among health care workers and worsened some of these conditions.

Lack of cars

Car dealerships across the country are struggling to meet demand due to the shortage of semiconductor chips. In September 2019, 3.5 million new cars were for sale compared to less than a million in September 2021. The chip shortage affects cars partly because there are simply not enough chips, but also because, at the beginning of the pandemic, the chips that were manufactured were aimed at the electronics people had to rely on when they stayed at home.

The chip shortage has led the vast majority of automakers to reduce shifts or temporarily shut down assembly lines, the New York Times reported recently. According to CNBC, the chip shortage is expected to last through 2022, which will also affect car shortages. According to CBS News, car prices are not expected to return to normal until 2023.

About Christine Geisler

Check Also

Craig International signs major long-term deal with INEOS FPS

offshore staff ABERDEEN, UK — Craig International has secured a major order of INEOS Forties …

Leave a Reply

Your email address will not be published.