The pandemic is demonstrating how critical it is to have a well-synchronized supply chain for the success of markets.
Around February 2020, the whole world was on hold, waiting for China to recover and start producing and delivering essential items. COVID-19 proved that globalization and monopolies are not always beneficial. For instance, having one only country –China- in charge of most of the world’s production put supply chains at risk all around the planet.
In the US, things were not any different; for instance, many producers of perishable products were on the brink of bankruptcy, due to supply chain disruptions.
Before Covid-19, we paid reasonable prices for fresh food because we had an effective distribution system. However, everything changed when the quarantine started. While supermarkets remained open, hundreds of thousands of restaurants and educational centers had to adhere to the quarantine.
Both restaurants and schools played a critical role in the food supply chain; they enabled millions of American consumers to obtain fresh products, such as meat, grains, eggs, cheese, vegetables, and fruits.
Why the Supply Chain Is Important
The organizations involved in transferring a product from producer to consumer are called Channels. The intermediaries or channels you choose to distribute your product can impact your sales positively or negatively.
According to nytimes.com, since the beginning of the pandemic, supply chains got disrupted. Having no means of reaching consumers, farmers at Wisconsin and Ohio had to dump thousands of gallons of milk into lagoons; Idaho farmers buried millions of pounds of onions; and in South Florida, tractors crisscrossed bean and cabbage fields.
These are sad statistics in a country in which more than 54 million people are experiencing food insecurity, as a consequence of the pandemic. The USDA’s Household Food Insecurity report mentions that “more than 35 million people in the United States struggled with hunger in 2019”.
Donating all is impossible; charity centers have not enough capacity to store and freeze so much food. Farmers, already affected financially, cannot afford to transport tons of products themselves.
This debacle happened because many intermediaries or buyers of those products were restaurants and schools. With restaurants and schools unable to work, producers and consumers got isolated from each other.
Alternatives to a traditional supply chain
After COVID-19 tore apart the usual distribution means, producers had to be creative and look for shortcuts and new channels. That is how the deliveries and curbside pick-ups bloomed. COVID-19 Boosted businesses related to Delivery Services.
The pandemic taught us to create new ways of reaching consumers when ordinary distribution channels have been disabled.
Deloitte.com affirms that COVID-19 might be “the black swan event that finally forces many companies, and entire industries, to rethink and transform their global supply chain model.”
So, remember: In times of crisis, focus on agility rather than growth; adapt quickly to market changes; shift your priorities, and remain focused on your consumers’ needs.
*Photo source: wsj.com