Michael Wilson, vice president of Marketing and Packaging at AFFLINK.
The world supply chains are certainly not immune to disruptions. Two that stand out in recent memory are Hurricane Katrina in New Orleans and the wildfires in Australia. Both caused significant supply chain interruptions.
However, they fit into the typical supply chain “triggers,” according to Michael Wilson, vice president of Marketing and Packaging at AFFLINK, a distributor-based sales, and marketing organization.
According to Wilson, natural disasters are just one of several causes of supply chain distribution. Others include the following:
- Export/import restrictions
- Labor shortages or strikes
- Currency fluctuations
- Information and communication disruption
- Political unrest and conflict.
“However, most of these triggers impact a single area of the world or just a few industries,” adds Wilson. “With COVID, everything is different.”
Among the difference Wilson points out are the following:
- COVID is far-reaching. Instead of impacting a region or two and just a few industries, it is affecting the entire world and almost all industries.
- Fewer supply alternatives. After Hurricane Harvey, the petroleum industry in the Gulf Coast was virtually shut down. However, refineries in other parts of the country could fill any shortages. Supply alternatives are harder to find with COVID.
- Demand shame. With past supply disruptions, people with the wherewithal did not hesitate to purchase luxury items. However, COVID has impacted the sale of high-end goods, leaving distributors stocked with these products unsure when this “shame” will subside.
- Disruption duration. Most supply chain disruptions tend to be short-term. Situations such as fires, hurricanes, even a tsunami tend to impact some industries and distributors for a few months, and then things improve. With COVID, we are likely to have disruptions continue for a year or more in different industry segments.
“Getting through this pandemic will require distributors to be flexible and resilient,” says Wilson. “As soon as we think we have arrived at a ‘new normal,’ another ‘new normal’ may take its place. Flexibility and resilience are the names of the game now.”