Supply Shortages Continue to Abound

By Sue Doerfler, Senior Writer, Inside Supply Management Magazine—

Supply chain complications and shortages have been a hot topic among supply management professionals – and consumers – since the onset of the coronavirus (COVID-19) pandemic. They have ranged from personal protective equipment, for which shortages were rampant at the beginning of the pandemic but have since eased, to semiconductor chips, which are experiencing lead times of up to a year.

Increased demand, port congestion and shipping issues, lack of inventory, market dynamics, and extreme weather disturbances, including a February storm that hit Texas, are among the contributing causes. Since the onset of the pandemic in February 2020, factory shutdowns and staffing issues also have impacted supply availability.

The Biden administration has announced it is creating a task force to deal with near-term bottlenecks in four industries: construction, agriculture/food, transportation, and semiconductors. The announcement, made June 8, followed the completion of a 100-day review of supply chains.

Led by three Cabinet secretaries – transportation secretary Pete Buttigieg, commerce secretary Gina Raimondo, and agriculture secretary Tom Vilsack – the task force “will bring an all-of-government approach to addressing the near-term supply and demand mismatches we are seeing in these sectors as the economy reignites,” Sameera Fazili, deputy director of the National Economic Council, said during a press briefing.

You can’t consider supply shortages without looking at logistics issues that include congested ports and container shortages. Shipping schedules as well as a recent COVID-19 outbreak are said to contribute to increased port congestion in South China, meaning a delay in exports. Experts expect the supply chain to be strained through 2022. Container pickup delays, lack of trucking and warehouse capacity, and a shortage of containers also have been issues at many ports.

One industry experiencing some relief in its supply availability is home building. According to Bloomberg, U.S. lumber output is up, due to sawmills increasing production and a drop in demand due to price surges. Lumber futures prices have dropped 40 percent since a May 10 high.

Among the strategies supply management professionals can take to improve supply disruption, experts say, include:

• Turning to dual sourcing and local and regional sourcing
• Increasing supply chain visibility using data and analytics
• Qualifying alternate designs and components
• Building in supply chain resiliency
• Collaborating/partnering with suppliers.

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