Still waiting for that delivery? Expert says interruptions in supply chain start in China

By KYW Newsradio 1060
PHILADELPHIA (KYW Newsradio) — The coronavirus pandemic has forced an interruption in the delivery of parts and materials for everything from screwdrivers to major appliances. The disturbance in the supply chain is having some pronounced affects on retail.

If you’ve tried to buy a microwave oven lately, you might be disappointed. One big-box store says it won’t be delivered until September. An internet search for a 75-foot soaker hose shows shipment delayed until November.

Chad Flood, owner of three hardware stores in Bucks County, says the supply chain is making it hard to get everything on the order slip.

“We’re probably getting, on average, around 55% to 60% of the normal goods that we’re carrying," Flood said.

Flood says not every product is unavailable, but it’s more like a smaller amount might be available. Like soaker hoses.

And not every product in short supply is a necessity, he said, but customers may be inclined to buy extra during the pandemic.

“Our hoses have been in and out," Flood said. "Like, one day, one SKU will be available and we’ll order it."

A SKU, or "stock keeping unit" is a term used by retailers to identify and keep track of inventory. 

"And then two days later, it’s out of stock," he continued. "It’s hard for us to gauge because, at this stage, there’s not one area of the store that everyone is gravitating towards. It’s sort of a little bit of everything.”

Dr. Madjid Tavana, a professor, and the chair of the Business Systems and Analytics Department at La Salle University, says China is at the center of the problem.

“China is the world’s factory. When China is impacted, the global supply chains are all impacted, obviously," Tavana said.

Tavana says retail businesses need to diversify, with parts suppliers and manufacturers in a number of places, instead of relying on only one. The old adage “Don’t put all your eggs in one basket" has taken on new meaning in the pandemic, he says. 

The retail industry used to rely on a traditional, linear supply chain: Suppliers provided raw materials to producers; producers made the products and shipped them to distributors; and distributors passed on the finished products to retailers. 

Now, Tavana says, the internet is ushering in a digital supply chain, wherein the entire system is visible to everyone. If there is an interruption in service, all of the parties know where it happened, and companies can move to other sellers to stay as efficient as possible. 

He says a digital supply chain is expensive to establish, but with the ongoing pandemic, and new outbreaks popping up around the world, companies must move in this direction.