We all should have probably paid more attention way back, in our high school economics class.
Maybe what’s going on today would have made a whole lot more sense.
I’m talking about the supply chain and, more accurately, supply chain mismanagement. We may remember that ubiquitous law of supply and demand, but we’ve probably never quite seen it in real life the way it’s happening today. It’s incredibly impactful on the home, housewares and gift industries, but the truth is, it’s been hitting everything from computer chips to toilet paper over the past 18 months.
By now, we all know the reasons why: Pandemic-induced shortages in factory workers, port operations and transportation drivers in just about anything with wheels. Add on more shortfalls in shipping containers, cargo vessels, trucks and for all we know forklifts, and the situation is one big mess.
But here’s the thing you need to know as you go about planning your business for the fourth-quarter holiday surge and into 2022: this quagmire isn’t going anywhere. Talk to people deep in the supply chain trenches and they will tell you there’s no magic bullet coming along anytime soon to resolve this situation. Unlike shortages in grocery stores last year that were eventually fixed for the most part, the issues impacting the global supply chain are too complex and too intertwined to be corrected easily.
In fact, short of a massive collapse in the American economy — not likely despite what some doomsayers might be saying — it looks like the supply chain isn’t going to fall back into place until late 2022 or even 2023 according to many insiders.
So plan accordingly. Buy what you can, whether you’re a supplier sourcing from overseas factories or a retailer dealing with your vendors. It may not be perfect and it may wreak havoc with both your open-to-buy and your balance sheet. But you need to get real about this situation. It’s no longer some theoretical textbook case study from a classroom.
It’s real…and it’s spectacularly complicated.
Award-winning Journalist & Consultant for the retailing and home furnishings industries with extensive business media experience in both fields.