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Global Supply Chain Disruptions & Shortages in 2021

Posted by Keith Schneringer on Jul 27, 2021 9:27:30 AM
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By: Keith Schneringer  |  July 23, 2021

Part one of a series analyzing the continued impact of COVID-19 on the facility supplies and foodservice disposables industries


The COVID-19 pandemic has dominated the news and collective psyche of the world throughout 2020, and its spread and the resulting cascade of ramifications have led to a global crisis of unprecedented reach and proportion.1 As was written in one of our articles on this topic last year,2 it would be the height of understatement to say that the COVID-19 pandemic has had a dramatic and oversized impact on many of the facets of our everyday lives which we may have previously taken for granted.

From state and community lockdowns, to the closures of “non-essential businesses” and public gathering places like schools, churches, and sports venues, to the implementation of social distancing measures3 and ongoing efforts to vaccinate large segments of the population,4 to the sheer numbers of cases and deaths attributed to the virus,5 it has been anything but “business as usual” for the world for well over a year now.

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And one of the “business as usual” areas of our everyday lives which we may have previously taken for granted prior to the pandemic, and which has been hit particularly hard over the course of the last year and a half as a result of COVID-19, is the global supply chain6 and our collective ability to be able to source and purchase the products which we have come to view as basic staples of our everyday lives.

Throughout 2020, shortages of Personal Protective Equipment (PPE)7 like gloves and face masks, as well as hand sanitizers, disinfectants/disinfectant wipes, and toilet paper8 were all fairly well documented, and could most easily be explained in a very straightforward way: there was a rapid and unanticipated massive global surge in demand for these specific products which could not be met with the available global supply.

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After months and months of shortages on these products throughout most of 2020 and into the beginning of 2021, it is worth noting that as this article is being written in the summer of 2021, if you would like to purchase some PPE,9 or hand sanitizers,10 or disinfectant wipes,11 chances are pretty good you will be able to find everything you may need now.

So… now that the supply chain has been able to accommodate for this dramatic spike in pandemic-related demand for these specific products, and the lockdowns are lifting, and people are being vaccinated, and COVID-19 cases are decreasing, and the world is re-opening, everything is ready to go back to “normal”, and we can get back to purchasing all of the rest of our “regular” supplies, right?

Unfortunately for all of us, the short answer to that question is “not so fast”!

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Supply Shortages of 2021 – “A Perfect Storm of Ugliness”

Now that we seem to be able to source plenty of PPE and hand sanitizer, it seems like we are unable to source much of anything else which doesn’t also now come attached with a much longer lead time than usual, as well as an increase in price. Everything from computer chips to chlorine to chicken – seems to be caught up in these shortages which are popping up all across the supply chain.12

This year, the supply shortages we are seeing across all of these multiple product categories and multiple industries can’t necessarily be attributed to any one particular reason like they could in 2020. And although the COVID-19 pandemic can be seen as a culminating factor leading to these ongoing shortages in the global supply chain, the reality is that just like an iceberg was the culminating factor in the sinking of the Titanic, it wasn’t the only contributing factor in the “event cascade” chain of circumstances which eventually led to the luxury ocean liner’s doom.13

Read More: A Brief Overview of the Supply Chain

The COVID-19 pandemic can therefore be seen as the proverbial “straw” which has broken the proverbial “camel’s back” of the global supply chain, but there are several other contributing factors in this particular event cascade which is now culminating in the supply shortages we are all currently experiencing.14

And there have been no shortage of potential candidates for supply chain disrupters which can be nominated for blame in this supply chain shortage event cascade, such as the logistical nightmare of the Suez Canal blockage,15 the freight backlog and plastic resin production stoppage of the Winter Storms in the Gulf Coast,16 and the computer hacking that shut down the flow of fuel through the Colonial Pipeline.17

As a matter of fact, the supply shortages of 2021 have been described as “a perfect storm of ugliness”18 by Nick Vyas, Executive Director and Co-Founder of the University of Southern California Marshall’s Center for Global Supply Chain Management.

“Anything that can go wrong is going wrong,” Vyas says.18

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Rising Demand Meets A Battered and Fragile Supply Chain

According to a recent survey from the Institute for Supply Management (ISM),20 companies and their suppliers “continue to struggle to meet increasing levels of demand,” noting that “record-long lead times, wide-scale shortages of critical base materials, rising commodities prices, and difficulties in transporting products are continuing to affect all segments” of manufacturing.19

The ISM survey also found that although factory activity increased to a reading of 61.2 in May 2021 (which is an increase from 60.7 in April 2021, and above a reading of 50 which indicates an expansion in manufacturing), inventories at factories are barely growing, and business warehouses are almost empty. 19 Further, an “overwhelming majority” of companies are hiring or attempting to hire, “with more than 50% of them expressing difficulty in doing so”, as a measure of factory employment fell to a six-month low.20

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Suppliers are also taking much longer to deliver raw materials to manufacturers, with the supplier deliveries index jumping up to 78.8 in May 2021, according to the ISM survey. This index is the highest reading since April 1974, and it follows a reading of 75 in April 2021. For context, a reading on this index which is above 50 suggests slower deliveries to factories.20

Shortages like these are disruptive and annoying, and they are not something that consumers in developed economies are used to dealing with. And unfortunately, according to Neil Shearing, Group Chief Economist at Capital Economics, “Supply shortages are not going to disappear overnight – on the contrary, they are likely to persist in some form until well into 2022.”21




Keith Schneringer is WAXIE’s Director of Merchandising + Sustainability. He is a LEED AP O+M and CIMS-GB ISSA Certification Expert who has been a consultant on a variety of LEED and CIMS-GB projects, and has presented to audiences at USGBC, BOMA, IFMA and CHESC events (among others). He enjoys learning and sharing information on topics related to sustainability and green cleaning and can be found on Twitter @kschneringer.



Sources:

  1. United Nations website article, The Virus That Shut Down the World: 2020, A Year Like No Other, December 24, 2020 https://news.un.org/en/story/2020/12/1080702
  2. WAXIE Sanitary Supply website article, Global Supply Chain Impacts of COVID-19, April 30, 2020 https://info.waxie.com/blog/global-supply-chain-impacts-of-covid-19
  3. Centers for Disease Control and Prevention (CDC) website, Guidance for Unvaccinated People – How To Protect Yourself & Others, updated June 11, 2021 https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/prevention.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fprevent-getting-sick%2Fsocial-distancing.html#stay6ft
  4. Council on Foreign Relations website article, A Guide to Global COVID-19 Vaccine Efforts, updated June 30, 2021 https://www.cfr.org/backgrounder/guide-global-covid-19-vaccine-efforts
  5. Johns Hopkins University of Medicine, Coronavirus Resource Center, information updated each day https://coronavirus.jhu.edu/map.html
  6. Investor’s Business Daily website article, Coronavirus Business Closures Unmask Global Supply Chain Defects, April 17, 2020 https://www.investors.com/news/technology/supply-chain-management-flaws-ripped-open-coronavirus-business-closures/
  7.  WAXIE Sanitary Supply website article, The Effect of COVID-19 on Personal Protective Equipment (PPE) Supplies, May 5, 2020 https://info.waxie.com/blog/the-effect-of-covid-19-on-personal-protective-equipment-ppe-supplies
  8. WAXIE Sanitary Supply website article, The Ongoing Demand for Hand Sanitizers, Disinfectants, and Toilet Paper – Oh My!, May 8, 2020 https://info.waxie.com/blog/the-ongoing-demand-for-hand-sanitizers-disinfectants-and-toilet-paper-oh-my
  9. New York Times website article, A Glut of Chinese Masks Is Driving U.S. Companies Out of Business, May 29, 2021 https://www.nytimes.com/2021/05/29/health/us-china-mask-production.html
  10. New York Post website article, Retailers Practically Giving Away Hand Sanitizer After Hoarding It During Pandemic, May 21, 2021 https://nypost.com/2021/05/21/retailers-practically-giving-away-hand-sanitizer-after-hoarding-it-during-pandemic/?utm_campaign=applenews&utm_medium=inline&utm_source=applenews
  11. CNN Business website article, Americans Are Buying Less Toilet Paper and Wipes, April 13, 2020 https://www.cnn.com/2021/04/13/business/toilet-paper-wipes-sales-drop/index.html
  12. CNN Business website article, Supply Chain Interrupted: Here’s Everything You Can’t Get Right Now, May 9, 2021 https://www.cnn.com/2021/05/08/business/supply-chain-shortages-pandemic/index.html
  13. NBC News Science website article, 10 Causes of the Titanic Tragedy, April 1, 2012 https://www.nbcnews.com/sciencemain/10-causes-titanic-tragedy-620220
  14. YouTube video – Wendover Productions, Why There Are Now So Many Shortages (It’s Not COVID), June 1, 2021 https://www.youtube.com/watch?v=b1JlYZQG3lI
  15. CNBC website article, The Ship That Blocked the Suez Canal May Be Free, But Experts Warn the Supply Chain Impact Could Last Months, March 29, 2021 https://www.cnbc.com/2021/03/29/suez-canal-is-moving-but-the-supply-chain-impact-could-last-months.html
  16. The Journal of Commerce Online website article, Winter Storms Deal Another Blow to US Supply Chains, February 17, 2021 https://www.joc.com/trucking-logistics/winter-storms-deal-another-blow-us-supply-chains_20210217.html?page=1
  17. CNBC website article, Colonial Pipeline Restarts After Hack, But Supply Chain Won’t Return To Normal For A Few Days, May 12, 2021 https://www.cnbc.com/2021/05/12/colonial-pipeline-restarts-after-hack-but-supply-chain-wont-return-to-normal-for-a-few-days.html
  18. Forbes Advisor website article, Supply Chain Shortages Are Blocking Multiple Industries. Here’s What It Means For You, May 25, 2021 https://www.forbes.com/advisor/personal-finance/consumer-spending-supply-chain-shortages/
  19. Investopedia website article, Supply Chain, updated July 7, 2020 https://www.investopedia.com/terms/s/supplychain.asp
  20. Reuters Business website article, U.S. Manufacturing Gains Steam; Raw Material, Labor Shortages Mounting, June 1, 2021 https://www.reuters.com/world/us/us-manufacturing-sector-picks-up-may-work-backlogs-rising-ism-2021-06-01/ 
  21. CNN Business website article, How Long Can Supply Shortages Continue?, updated July 6, 2021 https://www.cnn.com/2021/07/06/investing/premarket-stocks-trading/index.html 

Topics: industry news, covid-19, supply chain

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