The NY Times explains the global supply chain problems.
By Curt_Anderson October 22, 2021 12:14 pm Category: Business (5.0 from 1 vote)
Rules of the Post
The bottom line is that the supply chain problem is multifaceted and there are no quick and easy solutions. No presidential edict can cause the supply chain move in its normal fluidity. From what I've read, no American is really suffering because of supply chain problems. They may need to hold off on certain purchases or satisfy themselves with an alternative, but they will survive.
When did this start?
The disruptions go back to early last year, to the beginning stages of the pandemic. Factories in parts of the world where a lot of the globe’s manufacturing capacity sits — places like China, South Korea and Taiwan as well as Southeast Asian nations like Vietnam and European industrial giants like Germany — were hit hard by the spread of coronavirus cases. Many factories shut down or were forced to reduce production because workers were sick or in lockdown. In response, shipping companies cut their schedules in anticipation of a drop in demand for moving goods around the world.
That proved to be a terrible mistake. Demand for some things — restaurant meals, trips to vacation destinations, spa services — indeed cratered.
But Americans took the money they used to spend on such experiences and redirected it to goods for their homes, which were suddenly doubling as offices and classrooms. They put office chairs and new printers in their bedrooms, while adding gym equipment and video game consoles to their basements. They bought paint and lumber for projects that added space or made their existing confines more comfortable. They added mixers and blenders to their kitchens, as parents became short-order cooks for cooped-up children. The timing and quantity of consumer purchases swamped the system. Factories whose production tends to be fairly predictable ramped up to satisfy a surge of orders.
The Times article explains how interdependent international commerce is. A factory in one country needs components imported from another. The computer chip shortage needed to make cars is good example of this. Also, the cargo containers are scattered around the globe but in the wrong places.
Panic buying by consumer and retailers only compounds the problem. Now is a good time for Americans and the rest of the world to be less materialistic.
The views and claims expressed by contributors are their own and do not necessarily reflect the views and beliefs of SelectSmart.com. Not every statement made here can be assumed to be a fact.
Comments on "The NY Times explains the global supply chain problems.":
