Supply chains disruptions that have been occurring as a result of the coronavirus disease (COVID-19) pandemic will likely stay into next year, Rutgers professors say. Photo by Pixabay.com
By Kithmy Wickramasinghe The Daily Targum
Global supply chains are currently facing historic disruptions, with more than 70 cargo ships recently getting stuck off the California coast and ports in key export markets like China facing numerous shutdowns.
Warren Cohen, assistant professor of professional practice in the Department of Supply Chain Management, said that the coronavirus disease (COVID-19) pandemic has created unprecedented challenges for the global supply chain that will affect the upcoming holiday season and likely extend well into the next calendar year.
“These disruptions are affecting consumer goods, manufacturing capabilities and raw materials, ultimately raising prices on goods and services along with increasing inflation globally,” he said. “If other (COVID-19) variants develop along with the current delta surge, we could experience even greater shortages of supply and increased disruptions.”
Areas such as inventory management and transportation have been affected greatly, with many companies who were unprepared for the supply chain disruptions also facing nontrivial inventory shortages, Cohen said.
“These disruptions have weakened the global supply chain,” he said. “We are experiencing massive shortages of manufacturing components, micro chips that are used in so many products today, delivery delays, lack of shipping containers and rapidly increasing transportation costs.”
David Dreyfus, assistant professor in the Department of Supply Chain Management, said the pandemic has also caused a gap in the workforce. One reason for this is because people who were ill or caring for family members were unable to work, often for weeks at a time.
“Many businesses have been unable to hire enough employees to meet demand, thus orders have (been) delayed or not accepted due to the inability to ramp up production any further,” he said.
Additionally, many people have decreased their traveling or stopped altogether, which has had a huge impact on the economy’s service sector, Dreyfus said. The money typically spent on traveling was instead spent on material goods, resulting in businesses being unable to respond effectively to the increased demand, because of both lack of labor and lack of input material.
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