COLUMN STAWAR: Coping with supply chain disruptions | Opinion


We can all remember the frightening times when the pandemic first began.

Some people have tried to capture the market on products such as toilet paper and Purell. Black market operators have even been arrested for transporting hand sanitizer across state borders just to rip off the public. Jay Zagorsky of Ohio State University says that while hoarding toilet paper makes little economic sense, the most important aspect is that hoarding makes people feel more secure.

When faced with a situation where they have little or no control, people gravitate towards controlling the things they can. Hoarding is quite common in the animal kingdom. It can be an instinctive behavior that manifests when individuals are stressed, due to evolution.

Economist Susan Helper of the White House Council of Economic Advisers and doctoral student Evan Soltas say the pandemic toilet paper shortage was triggered by “a sudden 40% increase in demand for retail toilet paper, type the softer used by households “.

Obviously, the White House knows that there are two grades of toilet paper: commercial toilet paper, which is thin and rough, and household toilet paper, which is thick and fluffy. There has never been a shortage of commercial grade, which I guess is used in prisons, schools and any gas station I have ever stopped by. Desirable fluffy toilet tissue, however, is bulky to store and consumer demand is generally stable. For these reasons, retailers only kept a few weeks of inventory on hand. When it flew off the shelves, it took a while to replace it.

Domestic manufacturers of toilet tissue rapidly increased their production from about 92% to over 100%. They didn’t even bother to try to convince the public to use commercial grade. Good choice. Things are better now, but as the economy recovers, the chain of events means that many commodities will be temporarily short. This may include pulp for making paper, so we’re not out of the woods yet.

According to Helper and Soltas, “Many consumers are making big purchases with the savings accumulated during the pandemic. “

This creates demand on big ticket items like cars and appliances. They hope these supply chain shortages and disruptions are large and widespread, but are likely to be transient.

I remember the gasoline shortage of 1974. In February of that year, the Baltimore Sun reported that drivers in Maryland were waiting in five mile lines to get their gasoline. There were fights, vandalism, and owners of gas stations began to carry guns for protection. Maryland resident John Wanken reportedly said, “It turns us into animals, it’s back to the cave men.” “

It was like the 1960 Twilight Zone episode The Monsters Are Due on Maple Street. In this classic Rod Serling episode, the hidden aliens do nothing more than randomly turn a particular neighborhood on and off. The locals soon begin to fight with each other and sink into a panic of paranoia and violence. The aliens are amused by this and decide that this would be an easy way to invade earth. Losing electricity is one thing, but anything that threatens the freedom to have your own car is sure to ignite Americans.

At the time of the gasoline shortage, I was working at a mental health center in Mississippi. A psychologist said if they ration the gas he believes it will be given priority because the country will need a lot of mental health services. We all believe that we are indispensable.

Today, many businesses have trouble restocking inventory due to the inability to hire employees quickly enough to keep pace with demand. Catching up is especially difficult for companies with complex supply chains, such as the auto industry. An average car can have up to 30,000 separate parts, and many come from outside the United States.

The White House report says shortages are a major drag on activity and growth in specific sectors of the economy, such as new home construction. Relatedly, the shortages have led to sharp price increases, fueling inflation. The price of meat, poultry, fish and eggs, for example, increased by almost 6% from July 2020 to July 2021.

The Federal Government’s Supply Chain Disruption Task Force is currently monitoring four critical areas: semiconductor manufacturing, high-capacity battery production, critical minerals and related materials, and pharmaceuticals. This is how they can help reduce shortages in these important areas as quickly as possible.

Unfortunately, commodities and commodities in short supply are expected to be everything from chicken wings to coffee beans. Just in time for the holidays, shortages are predicted for home furnishings, electronics, seasonal clothing and toys. The Indy Star reported that one of the biggest shortages this holiday season is jewelry.

Many of these shortages do not seem logical. A South Bend restaurant owner told the South Bend Tribune that she suffers from ever-changing shortages, such as plastic cups, chicken (served with waffles), bagels and even a certain brand of tea. My wife Diane and I had trouble getting weird things locally like frozen garlic bread and furniture wipes.

Economist Rodney Holcomb, Oklahoma State University, said, “Meat products are always one of the most difficult products to keep in stock. “

He thinks a lot of people still store meat when they can. The global freezer sales market grew by around 4% last year, and many people bought freezers early in the pandemic with stimulus checks.

The difficulty in actually getting imported goods delivered is, of course, a critical part of the supply chain challenge. Steve McClain of the Kentucky Retail Federation says, “What has happened now is the ports are being backed up. New Orleans, Los Angeles. New York. … They have a lot of containers stacked up and there aren’t enough truck drivers to unload those containers and move them across the country. This year, the American Trucking Association estimates that the shortage of truck drivers will reach a record high of over 80,000 drivers, as shortages of goods, parts and labor create a vicious cycle.

As the global economy tries to unravel this mess, we all need to be patient and creative. Panic only makes things worse. Maybe we can delay buying that new car or that diamond necklace. We can try ordering tofu and waffles and I can have cookies with my dumplings.

Terry L. Stawar, ed. D. lives in Jeffersonville is the outgoing CEO of LifeSpring Health Systems. He can be contacted at [email protected]

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