The supply chain disruption is real and will last for quite some time, says Manufacturing and Supply Chain Expert Lisa Anderson, president of LMA Consulting Group Inc. Every supply chain is a complex set of connections that spans from the supplier’s suppliers to product or service accessibility for the end user.
“Let’s look at the ‘why’ of the disruption,” she continues. “If you remove industry nuances, there are three main causes of the disruption. The first cause is labor. The pandemic exacerbated the ongoing drain of skilled ‘boomer’ workers, many of whom took early retirement. The pandemic also caused workers to reassess their priorities. That resulted in people deciding that they didn’t like their industry or job or their boss. This has manifested into what many are calling the Great Resignation.”
Labor shortages exist in almost every industry and position. “Manufacturing, transportation, distribution, none of these industries are exempt. And, most of these industries affect the consumer, who has felt the supply chain pinch the worst,” Anderson adds.
The second reason for supply chain disruption is misalignment. “The pandemic caused a shift in demand. When people experienced an out-of-stock, they found new products that were either similar or better. This shift caused a supply chain misalignment: having the wrong products in the wrong places at the wrong time. So, even when the original products were in place, the demand was no longer there because it had shifted,” says Anderson.