1. Read the article America is running out of everything. 2. Describe how supply chain disruptions have impacted you personally, and explain how TWO key concepts from Lecture 4) apply to this experience.
Topic: Answer 2 questions in paragraph form. Key Concepts to ‘Supply Chain Update and How does Your Manager Motivate?
1. Read the article America is running out of everything.
2. Describe how supply chain disruptions have impacted you personally, and explain how TWO key concepts from Lecture 4) apply to this experience. Provide a thoughtful, complete answer (one short paragraph) to receive full credit.
Referring to the ‘Management Motivation Styles’ discussed in Lecture 4, explain which style(s) best fit your situation as a manager or an employee. Choose from the following: Classical, Hawthorne Effect, Theory X, Theory Y, Expectancy, Equity, Participative.
The global supply chain is slowing down at the very moment when Americans are demanding that it go into overdrive.
s it just me, or does it feel like America is running out of everything?
I visited CVS last week to pick up some at-home COVID-19 tests. They’d been sold out for a week, an employee told me. So I asked about paper towels. “We’re out of those too,” he said. “Try Walgreens.” I drove to a Walgreens that had paper towels. But when I asked a pharmacist to fill some very common prescriptions, he told me the store had run out. “Try the Target up the road,” he suggested. Target’s pharmacy had the meds, but its front area was alarmingly barren, like the canned-food section of a grocery store one hour before a hurricane makes landfall.
This is the economy now. One-hour errands are now multi-hour odysseys. Next-day deliveries are becoming day-after-next deliveries. That car part you need? It’ll take an extra week, sorry. The book you were looking for? Come back in November. The baby crib you bought? Make it December. Eyeing a new home-improvement job that requires several construction workers? Haha, pray for 2022.
The U.S. economy isn’t yet experiencing a downturn akin to the 1970s period of stagflation. This is something different, and quite strange.
Americans are settling into a new phase of the pandemic economy, in which GDP is growing but we’re also suffering from a dearth of a shocking array of things—test kits, car parts, semiconductors, ships, shipping containers, workers. This is the Everything Shortage.
The Everything Shortage is not the result of one big bottleneck in, say, Vietnamese factories or the American trucking industry. We are running low on supplies of all kinds due to a veritable hydra of bottlenecks.
The coronavirus pandemic has snarled global supply chains in several ways. Pandemic checks sent hundreds of billions of dollars to cabin-fevered Americans during a fallow period in the service sector. A lot of that cash has flowed to hard goods, especially home goods such as furniture and home-improvement materials.
Many of these materials have to be imported from or travel through East Asia. But that region is dealing with the Delta variant, which has been considerably more deadly than previous iterations of the virus. Delta has caused several shutdowns at semiconductor factories across Asia just as demand for cars and electronics has started to pick up.
As a result, these stops along the supply chain are slowing down at the very moment when Americans are demanding that they work in overdrive.
The most dramatic expression of this snarl is the purgatory of loaded cargo containers stacked on ships bobbing off the coast of Los Angeles and Long Beach. Just as a normal traffic jam consists of too many drivers trying to use too few lanes, the traffic jam at California ports has been exacerbated by extravagant consumer demand slamming into a shortage of trucks, truckers, and port workers.
Because ships can’t be unloaded, not enough empty containers are in transit to carry all of the stuff that consumers are trying to buy.
So the world is getting a lesson in Econ 101: High demand plus limited supply equals prices spiraling to the moon. Before the pandemic, reserving a container that holds roughly 35,000 books cost $2,500. Now it costs $25,000.
The container situation is even weirder than it looks. With demand surging in the United States, shipping a parcel from Shanghai to Los Angeles is currently six times more expensive than shipping one from L.A. to Shanghai. J.P. Morgan’s Michael Cembalest wrote that this has created strong incentives for container owners to ship containers to China—even if they are mostly empty—to expedite the packing and shipping of freights in Shanghai to travel east.
But when containers leave Los Angeles and Long Beach empty, American-made goods that were supposed to be sent across the Pacific Ocean end up sitting around in railcars parked at West Coast ports. Since the packed railcars can’t unload their goods, they can’t go back and collect more stuff from filled warehouses in the American interior.
And what about the truckers who are needed to drive materials between warehouses, ports, stores, and houses? They’re dealing with a multidimensional shortage too. Supply-chain woes have backed up orders for parts, such as resin for roof caps and vinyl for seats. But there’s also a crucial lack of people to actually drive the rigs.
The Minnesota Trucking Association estimates that the country has a shortage of about 60,000 drivers, due to longtime recruitment issues, early retirements, and COVID-canceled driving-school classes.
In short, supply chains depend on containers, ports, railroads, warehouses, and trucks. Every stage of this international assembly line is breaking down in its own unique way.
When the global supply chain works, it’s like a beautifully invisible system of dominoes clicking forward. Today’s omnishambles is a reminder that dominoes can fall backwards too.