APU Business Original

The COVID-19 Supply Chain Meltdown and New Opportunities

Pinterest LinkedIn Tumblr

Image courtesy of Vidar Nordli-Mathisen, Unsplash.

By Dr. Oliver Hedgepeth, Faculty Member, Transportation and Logistics Management, and Dr. Larry Parker, Department Chair, Transportation and Logistics Management

For people working in transportation and logistics management, the procedures of how to deal productively with customers or how to order inventory was formerly standard and simple to follow. But then came COVID-19 in March of 2020 and its continuing impact on retail stores, jobs, and lives. This pandemic has led to supply shortages and empty shelves in retail stores, as well as overstocked or even empty shelves in some warehouses.

There are thousands of 20-foot containers, stocked with summer and Christmas goods, just sitting on cargo ships waiting to get into congested ports. These ships have been hoping to offload their cargo for long periods of time.

Resolving the Problems Created by COVID-19

The current pandemic and all its associated problems will not go away quickly. For instance, retailers and manufacturers are both losing revenue. Many companies are closing down due to a loss of customers, supplies and raw materials.

The supply chain commonly needs people to move items from one point to another. The supply chain also requires truck drivers and forklift drivers, as well as people to pack boxes, move cargo, and perform inventory. In some businesses, there may be artificial intelligence [AI] or robots to provide assistance.

But finding qualified employees has not been easy. During 2020 and into 2021, for instance, there has been a shortage of truck drivers. Some drivers were impacted by layoffs due to the pandemic; others simply retired. Similarly, warehouses and retail stores are also understaffed due to COVID-19, which shut down some businesses permanently.  

Consumers’ Shopping Behavior Underwent Changes Due to the Pandemic

Consumer shopping behavior also changed in 2020 and 2021. For instance, many people lost their jobs or switched to working from home. Their children switched to online instruction from teachers or their parents.

With more families staying at home, the demand for household goods increased. Online shopping grew significantly due to store closures.

Companies also did not anticipate that some items would become scarce due to panic buying and hoarding. For example, a year ago, there was a problem finding toilet paper in grocery stores and at major retailers such as Walmart and Target.

Both retailers and supply chain managers had not considered this special kind of emergency. Some contacted other supplies to cope with the shortage, while retailers and manufacturers worked at a frantic pace to restock shelves.

Tracking and Tracking Products Is Also Difficult

Another problem was the inability of retailers to trace and track products through complex supply chains. If a store has 200 to 1,000 items to sell, for example, many of these items are hard to track. The origins of these items are so far removed from the retailers, it is difficult for retailers to know where to begin looking.

Labor Shortages Are Occurring in Many Areas

A problem that seems to be headline news this year is that some workers are refusing to go back to their jobs, a problem that has been dubbed the “Great Resignation.” Many companies cannot hire enough employees, and “employees wanted” ads are appearing at grocery stores, fast-food restaurants, and other businesses.

The COVID-19 pandemic has created considerable stress for workers. Some do not wish to return to an in-person workplace because they fear infections, while others prefer the work-from-home lifestyle.

Pandemic-Related Closures of Foreign Businesses Impacted Supply Chains

Another issue in regard to the supply chain was that many goods were manufactured in foreign countries, such as China and Vietnam. When companies in those countries had to close their manufacturing plants due to workers being infected by COVID-19, that limited or even stopped their goods from entering the supply chain and moving to warehouses, retail stores, and consumers.

The Growing Demand for Supply Chain Workers

Overall, there are some interesting flaws in global supply chains that are still unfolding and may not be completely understood until 2022 or the following years. But at the moment, there is a high demand for supply chain workers because large employers are having difficulty in filling those roles.

The need for people to work in logistics, reverse logistics and all aspects of supply chain management is increasing. The demand is coming from all the supply and transportation problems that this pandemic created on a global stage. There may even be new job titles as the result of the pandemic.

The growth in supply chain jobs is exciting and shows no signs of slowing down. According to the U.S. Bureau of Labor Statistics, jobs for logisticians are expected to grow by 30% between 2020 and 2030, compared to business operations at 9% and all other jobs at 8%.

Logistics job titles may vary from company to company. But given the nature of the supply chain disruptions that started in 2020, distribution managers will be essential. 

The supply chain field offers multiple careers worth researching, such as logistics analyst, supply chain manager or supply chain analyst. Company purchasing experts will also be in high demand as cost of transporting items by truck, cargo ship or rail seems to vary daily.

Preparing for a Different Supply Chain World

The pandemic has uncovered logistics and supply chain processes that are out of date and in need of total revision. It has also revealed new areas of concern, fear and stress.

Businesses have had to pivot to changing their products, changing how they sell to customers, altering how do business and finding new suppliers (especially those who had relied on foreign manufacturers. For consumers, some items are scarce and prices have doubled on certain items, such as cars.

Companies will require employees to help them think differently about what they provide to consumers, how to introduce innovations and how to treat customers who have changed their shopping behavior. They may also need to hire consultants to offer insights about the movement of their products through supply chain networks.

For inspiration, transportation and logistics managers can look to the military supply chain and transportation systems. While the military is also experiencing similar pandemic-related shortages, it is also far-sighted in anticipating customer needs and acting on those needs to maintain operational readiness.

The military has routinely leveraged a network of personnel familiar with local supply systems to support their operations as they traveled the world. This experience results in supply chain personnel who are comfortable in being dynamic in the development of supply chain management solutions.

For those who are seeking jobs in the supply chain field, new skillsets may be required for the post-pandemic workplace. Similarly, educational institutions will need to re-evaluate their academic programs to ensure that students are properly prepared for the new world of supply chain management.

About the Authors

Dr. Oliver Hedgepeth is a full-time professor of transportation and logistics management. He was program director of three academic programs: Reverse Logistics Management, Transportation and Logistics Management and Government Contracting. He was Chair of the Logistics Department at the University of Alaska Anchorage. Dr. Hedgepeth was the founding Director of the Army’s Artificial Intelligence Center for Logistics from 1985 to 1990, Fort Lee, Virginia. 

Dr. Larry Parker is a full-time professor and Department Chair. He is the chair of four programs: transportation and logistics management, supply chain management, reverse logistics management, and government contracting and acquisition.

Comments are closed.