How the Supply Chain Can Insulate its Risk for the Holiday Season
Key Points:
- Beaird Solutions shares how to beat supply chain issues.
- Pandemic caused simultaneous spike in demand and drop in supply.
- The global economy will bounce back one of two ways.
Commentary:
Host Jason Schefferstein discussed the rocky supply chain pandemic trends and its future with President David Beaird of Beaird Solutions.
With the global economy refined to a point of precision, Beaird wasn’t surprised that something like COVID-19 could so severely disrupt the operations and performance across all industries. He explained how the supply chain leverages demand with supply, and during the pandemic, the world saw a simultaneous spike in demand and shut down in an uncertain market.
Today people are seeing the effects of failing to plan early. Because of the shift in supply, manufacturers are now finding out they don’t have essential parts or materials needed to create their product/service. While most companies don’t want to keep a supply of inventory on hand due to balance sheets, Beaird recommends it will likely be the differentiator between competition and which businesses can keep their doors open.
“You have this entire inertia to keep inventories low and to keep profits maximized… then if you don’t have the inventory in place, there’s nothing you can do. And then you’re missing sales,” Beaird said.
So how will the economy bounce back? The world is going to go one of two ways:
- When things stabilize, it will go back to the global economy processes and operations that was seen pre-pandemic.
- Regional or hemispheric economies will arise and decouple the previous global situation.
However, while option two sounds beneficial for many reasons, like increasing American jobs and creating more American-made products, wealthy business owners will likely have to bring their overseas operations back home. While this will bring more jobs, it will also mean higher labor prices, causing the product price increase.
The question lingering is… will Americans be willing to go for that?
