Every pandemic-era newscast has addressed the impact of COVID-19 on our world, but most Americans don’t need a reminder. After all, we are living through it. The pandemic has affected us personally and professionally through sickness, loss of loved ones, working from home and shifts to online learning. It has also engendered greater appreciation for the fragility of global supply chains.
Every mine, farm, factory, warehouse, transportation company and retail outlet use supply chains from the source of raw materials to the point where products are consumed. Supply chain managers are responsible for the planning and execution of purchasing, production, storage and transportation of every product with the goal of ensuring that goods are available when consumers need them at a price they are willing to pay.
Beyond health and wellness, the disruption of supply chains and product shortages are perhaps COVID-19’s biggest impact. When the pandemic began, there were stockouts of personal protective equipment (PPE), toilet paper, cleaning supplies and food. Along with frontline workers, supply chain managers who helped mitigate these stockouts were largely responsible for preventing a proverbial zombie apocalypse during the pandemic’s first few months.
These initial shortages are largely resolved, but consumers in the market for new cars, furniture and many other goods still face limited choices and delayed delivery times. Many products are in short supply due to COVID-19-induced unloading delays at international ports of entry.
COVID-19 has impacted supply chains in part because of an inability to forecast and manage supply and demand fluctuations. The infamous and often parodied spring 2020 toilet paper shortage is a good example. There was enough toilet paper supply to meet normal conditions, but demand patterns shifted and spiked, because people began working from home. Office and home toilet paper are different, so demand shifted from commercial to residential-grade products. Furthermore, while many Americans maintain large quantities of food, most home paper good supplies are minimal. Homebound consumers, fearful of running out, purchased large quantities of product, and it took time for supply chains to adjust to this demand spike.
The current new car inventory shortage has slightly different underpinnings. Unlike paper goods, cars contain thousands of parts ranging from the mundane to highly technical. Car assembly plants rely on a large and diverse supplier base. In contrast to paper mills, assembly plants and their suppliers are often located in more densely populated areas where COVID-19 is easily transmitted. Multiple assembly plants were shut down at the beginning of the pandemic due to COVID-19 outbreaks among plant workers and have endured further shutdowns due to similar problems at supplier locations. Car assembly plants are vulnerable to supply disruptions given their use of just-in-time inventory systems where little inventory is stored at the plant, and suppliers deliver goods “just in time” for them to be used on the production line. A shortage of even the most commonplace product can shut down an assembly plant at a cost of $50,000 per minute.
The University of Central Arkansas College of Business instituted its logistics and supply chain management program in 2016 with a $3 million grant from the Arkansas Department of Transportation. Our faculty train students to manage supply chains capable of resisting future shocks such as those caused by COVID-19. We provide our students with a logistics-focused supply chain education to meet the talent requirements of businesses in Arkansas and beyond. UCA-trained supply chain managers are tough, flexible and ready to face future challenges. They may even ensure delivery of your paper goods or find you the last available car on the lot.
Doug Voss is professor of logistics and supply chain management in the UCA College of Business. He serves as the Scott E. Bennet Arkansas Highway Commission Endowed Chair of Motor Carrier Management.