Supply chain securityWhy You Should Expect More Suez-Like Supply Chain Disruptions and Shortages at Your Local Grocery Store
When the Ever Given container ship choked off traffic in the Suez Canal for almost a week in late March 2021, it made big headlines around the world. Yet many people I spoke with, including students and professional colleagues, didn’t seem to have a clue about what was happening, why it mattered or how it affects them.
When the Ever Given container ship choked off traffic in the Suez Canal for almost a week in late March 2021, it made big headlines around the world.
The price of oil rose, and companies fretted as hundreds of ships carrying everything from coffee and cattle to toys and furniture were delayed. Experts estimated that every hour traffic remained stuck cost the global economy over US$400 million in lost trade.
Yet many people I spoke with, including students and professional colleagues, didn’t seem to have a clue about what was happening, why it mattered or how it affects them.
As a supply chain expert, I was truly surprised. If nothing else, the COVID-19 pandemic should have made it abundantly clear how easily a disruption in the supply chain or a sudden increase in demand for a product can lead to empty grocery store shelves and other problems that might directly affect you.
Without a change of course, I expect this problem to only get worse.
Supply Chain Strains
The pandemic revealed that even simple supply chains, such as that of toilet paper and hand sanitizer, can easily break in the face of disruptions. The same was true with food, personal protective equipment, pharmaceuticals and ordinary household items, which all suffered from severe shortages that lasted for months into the pandemic.
Pandemic-strained supply chains are now creating a global shortage of semiconductors, a component used in a wide variety of consumer goods, from Samsung smartphones and Apple laptops to Ford Explorers and Sony PlayStations. Virtually every piece of electronics needs a chip, and the supply chain is much more complex than for toilet paper.
The Suez Canal blockage that began on March 23, 2021, and lasted six days exacerbated these already stressed supply chains. Even though traffic is now running smoothly through the canal, the jam is still causing massive ripple effects and delivery delays – even toilet paper could once again be in short supply.
It may take up to 60 days for the supply chain system to reset itself to where it is functioning close to normal.
That means consumers will continue to feel the impact of these problems for months to come as well.
Lean and Mean
The fundamental problem behind each of these disruptions is simply the inability of modern supply chains to adjust when something goes wrong, even briefly.
