brucewilds.blogspot.com By Bruce Wilds
Recently a person that gets about shared with me a story about how coffee shop employees spent much of their day telling customers, we can’t make that. The problem, of course, was they were unable to get the ingredients. Not only did it reduce sales but it left customers a bit peeved. While understanding it is not the fault of the barista, somewhere in the back of their mind they probably blamed someone in management for not making sure enough inventory was on site.
We should wonder how productivity can soar when so many items are out of stock and companies don’t have “that.” This is a problem caused by supply chain disruptions. The ramifications loom large as shortages continue adding to the cost of doing business. Much of this is due to shipping issues. Adding to the problem is due to the cost of carrying inventory many companies over the years have moved towards a just-in-time system. This means not stocking huge quantities of goods but bringing them in just before they are needed has left shelves empty.
Outsourcing the manufacturing of products to distant lands has come back to bite us. Once considered the way to lower cost and increase profits now means we have become far more dependent on logistics. Hopefully, the latest supply chain failures and increased animation will be enough to cause companies to rethink returning much of their production closer to home. For now, all this is driving prices higher and adding to inflation.
