Current Supply Chain Woes

For the last couple of years, supply chains have been affected by myriad factors: lack of labor, increased demand, and the increased cost to ship goods around the world.


When you’re running a business, these supply chain issues can lead to financial ruin unless you can get creative regarding sourcing materials. You may need to reevaluate your manufacturing process to save money or pivot your business plan. Is there another avenue you can explore in your niche to help you overcome issues with supply?

What Has Caused a Shortage of Goods?

At the onset of the Covid-19 pandemic, consumers began hoarding goods. Toilet paper, over-the-counter medicine, and soap were purchased in bulk due to fear of the unknown. Businesses that manufactured and distributed these items couldn’t keep up with demand, especially as many ceased operations due to lock-down requirements. Despite the progress being made when it comes to living in a world affected by this virus, it’s been hard to make up for the lost time.

Worker Shortage

Lack of labor affected every link in the supply chain. Let’s look at the lumber industry, for example. If there isn’t a full crew harvesting the timber, it will take longer to get raw material to the mills. The mills themselves are understaffed, so it takes longer to cultivate the wood into usable lumber. Then, when the timber has been prepped for distribution to wholesale and retail markets, there are fewer truck drivers available to haul the goods. 


Due to many people being stuck inside the same four walls day in and day out, they decided to tackle home improvement projects to make living, schooling, and working from home more bearable. This created an increased demand for lumber, which could not be met. It was like a perfect storm; materials were scarce to begin with, and then people wanted more in the midst of the shortage.


When it takes longer to source and deliver raw materials, they cost more so each link in the supply chain can earn the money they need to continue operating. They aren’t producing as much as they were in years past, so they have to make up for it somehow. 

What’s Causing the Labor Shortage?

You’d think people would be anxious to get back to work after lockdown restrictions were lifted around the world. However, there are a number of reasons that may be preventing people from rejoining the workforce.


Fear of Illness

Some people are still being cautious when it comes to potential exposure to illness. As a result, they don’t want to work in an environment where they don’t feel safe. In this same vein, many immigrants returned to their homelands during the pandemic and were never able to return to their previous employment. Whether it was due to the fear of getting sick, or the need to live somewhere they could be financially stable, it left a gap in the workforce.


Lack of Skills

Although working from home is now more common than ever, some people don’t have the skills necessary to do so. Whether they work in a field that doesn’t compute with telecommuting, or they don’t know how to use a computer or they don’t have access to the Internet, working from home isn’t feasible for many.


Dissatisfaction with Wages

In these times, many of us have simply had enough of being underappreciated. If the work we did pre-pandemic was so essential, why didn’t the wages and compensation plans reflect it? Many people are no longer willing to settle for low pay rates, and that’s reflected in understaffed businesses around the nation.


Tempting Unemployment Benefits

Finally, some economists surmise that robust unemployment benefits offer no incentive for people to return to the workforce. Why clock in every day at an underpaying job when you can fill your day with other activities while still receiving unemployment pay?

Materials Shortage

Whether it’s raw materials like gypsum for drywall or finished products like computer chips for vehicles, there’s a shortage worldwide. Industries that produce these items and more have been brought to a halt due to labor shortages, or straight-up closures of businesses during the pandemic.


As the economy recovers and consumers feel comfortable spending once again, there simply aren’t enough materials to meet demand. Even if they could be shipped quickly from the source to the consumer, they’d have to exist first.

Power Outages

China, a main supplier of goods for the US and Europe, is experiencing an energy crisis on the heels of the Covid-19 pandemic. On top of labor shortages and expensive shipping costs, power outages and power use restrictions affect businesses around the world. Brands including Apple, Mercedes, Tesla, and Volkswagen are experiencing shortages due to power rationing in China. Industries producing steel, aluminum, cement, fertilizer have been negatively impacted as well.

Increased Overhead Costs

Freight rates for items coming to the United States from China have skyrocketed, compounding the supply chain issues. Even if a manufacturer has resources, getting them to wholesalers, retailers, and then consumers is expensive. Companies with smaller profit margins are impacted more heavily when overhead costs increase, and they’re usually the first to close their doors.

Overcoming Supply Chain Woes

So what is a business to do when so many factors are out of its control? Sequoia Group has suggestions for improving supply chain agility, which can be found HERE.


Additionally, we need to shift our way of thinking. We can no longer expect same-day delivery for goods. We have to accept that instant gratification is no longer feasible for goods and services; we have to be willing to wait.


Nick Vyas, executive director of Kendrick Global Supply Chain Management, has shared that we may be looking at at least six more months before we see a positive change in supply issues. We have to get through the 2021 holiday season, and then the shifts might start to occur.

If your business or personal finances suffer as a result of supply chain woes, it’s not a sign of failure. Bankruptcy lawyer Rulon T. Burton reminds clients that filing for bankruptcy is “a path towards improvement.” We can’t all come out of this historic time unscathed, and there’s no shame in altering the way we do business or live our personal lives.

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