Answering Your Questions About The Supply Chain Disruption

Stan Bunger
July 15, 2020 - 12:08 pm

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    As we continue to navigate these unprecedented times, KCBS Radio is getting the answers to your questions about the coronavirus pandemic. Every morning at 9:20 a.m. Monday-Friday we're doing an "Ask An Expert" segment with a focus on a different aspect of this situation each day.

    Today, we're diving into continuing supply chain issues we're seeing at grocery stores and online. Toilet Paper, Clorox wipes, N95 masks, garlic and more all remain in high demand and are hard to come by.

    To answer your questions, KCBS Radio’s Stan Bunger joined by Bob Trebilcock, Editorial Director for Supply Chain Management Review.

    Tell us a little about Supply Chain Management Review is and what your role is.

    Thanks for having me on. First, I’m the Editorial Director of Supply Chain Management Review, so I’m responsible for putting out the magazine and developing the content. We specialize in everything related to supply chain from what’s called procurement, sourcing things (and) buying things, to final delivery to the customer and all that stuff that happens in between.

    We’ve seen in the last few months just how complicated and intricate this is.

    That is absolutely the case. You have conversations with people these days who couldn’t spell supply chain four months ago and now they’re saying the health care supply chain is broken down. I really think, not just the toilet paper thing, but one of the things that really made people aware of supply chain was when Amazon was like ‘We can no longer do Prime in two days. You’re going to get your order in two weeks,’ or whatever the case may be. People all of a sudden realized there’s stuff behind there that made it happen. It was not working the way that it used to.

    Why is it so hard to find daily shower cleaner?

    Part of it is in certain products there was hoarding going on and people were just buying more stuff than companies planned on them buying, so you had this mismatch. Everything goes off the shelves, but companies hadn’t made things to meet the kind of demand that they already had. They make things to a plan and you have to fire up production lines and put it on a truck and all of that. I just read a story last night that if you go to your grocery store, you might have seen 12 different kinds of mustards before and now you’re seeing three or four different kinds of mustards. A number of companies that make consumer products, the kinds of things that you and I buy, are really narrowing down to their best sellers so they can keep up with demand. They’re not making some of the things they used to make and putting all of their efforts into the two or three things that might be selling really fast now. I forget the number of products, but Pepsi has found that soft drinks aren’t selling, but snack foods are. So they’ve cut down the number of variations of Pepsi, Pepsi One and Diet Pepsi, that they’re making and just focusing on the core things so they have more resources towards making their snack food line, which includes Frito’s.

    Early in the pandemic, we heard a lot about how suppliers were still shipping in bulk to restaurants while grocery stores ran short. Why hasn't that changed? We still can't find flour, olive oil, rice and a bunch of other stuff.

    That one is actually a mystery. Certain flours that are in high demand like the - it’s made in Vermont - they just weren’t able to keep up. They weren’t geared for everybody becoming America’s next great baker. King Arthur Flour, yes. Hence, my kids using yeast and flour that they’ve never used before, and lots of us are doing that. I think companies are trying to get their supply and everything back up and running to meet the demand. People are running shorthanded. You have folks out because they’ve been exposed or they’re afraid of being exposed, and a lot of companies are running at maybe three-quarters speed because they don’t have the staff to get things up and running. There was interested in automation pre-COVID, there’s been a talent shortage in the supply chain for some time. Particularly the factories and warehouses. There’s real interest now because they all just got shot down with people not coming to work.

    Supermarket chains like Safeway say they buy lots of local products. Are there ways they could tap into local producers for things that are in short supply or is that just not practical?

    It’s not practical because the things that are in short supply are mass produced and a local producer, you know, your kid don’t the street might grow tomatoes but he’s not making toilet paper in the garage. You might have some artisanal flour makers, but they’re not going to be able to produce at scale.

    We’re getting close to fall and the holidays. Will electronics from China get into the country or elsewhere?

    That actually becomes a trade issue. There was a period in like February and March where ships, even if China was working, ships would not go pick up the product and bring it to the U.S. Shipping is back and working again and we’re getting shipments at a level that was pretty consistent with pre-COVID. Meaning, not just stuff coming from China, but Vietnam and Malaysia and all those places to U.S. ports. Those countries have pretty much recovered from COVID, so I don’t foresee unless there’s a trade issue, a problem getting consumer electronics that are primarily made overseas into the U.S. because of a supply chain issue.

    Costco still won’t deliver more than one of toilet paper and paper towels. Before the pandemic, I usually purchased threeof each quarterlyWhen could that change?

    That’s going to be a Costco decision. My understanding is that toilet paper is back on the shelves and the lines were running 24/7 anyway. My local grocery store here in New Hampshire, there was a period where you had to go in like every day to get one roll of toilet paper. I was in there last Saturday and the shelves were stocked, there were no problems. I went in and bought two things of toilet cleaner because I had a rental property in my own house, they wouldn’t let me get two. I could only get one. There may be some local issues, but I think in terms of a national issues, those things are working themselves out.

    I bought Clorox wipes at the start of the pandemic, but have not been able to find them since. When will we get them back?

    Again, it might be local. I’ve read about grocery stores looking for alternative distributers. Supply chain is complicated, you have a lot of middle men in between. Clorox makes it, then they send it to a Walmart distribution center, but they also might send it to a distributor who distributes X, Y and Z. Most of those places have contracts with specific distributors, and I’ve read that some of the grocery stores are looking for alternative distributors who they may not have worked with in the past. In select areas, there are still going to be these imbalances that companies are trying to work out. Things are getting back up and running. Now that you have other states that had been going are starting to shut down - Arizona, Texas, Florida and California - you don’t know what’s going to be considered an essential workplaces versus being shut down for a while.

    I found N95 masks online from Walmart in January. They were scarce then and have been unavailable since. What gives?

    With the medical supplies, and this doesn’t just relate to N95 masks, those medical supplies are no longer made here or in other local markets. I don’t mean the U.S., not Europe or South America, most of that stuff is made in China. In the competition for N95 masks, we’re not competing just New Hampshire versus California to try and get their hands on masks, we’re competing New Hampshire versus Hamburg, Germany. Those manufacturers who are pretty congregated in some specific spots, have contracts they’re fulfilling to the world. The second piece of it, we just have this raging virus now. A lot of it is going to the essential workers.