The coronavirus pandemic has hit every corner of the globe and had a deep and profound impact on our daily lives. While not being able to see loved ones is undoubtedly amongst our biggest personal challenges, in the world of business, disruption to the global supplychain has been a problem that has cropped up time and again.
Whether because of staff shortages in factories, stay at home protocols, self-quarantining or shipping and distribution issues caused by lockdowns and border checks, more and more businesses across the UK have been hit by limited stock, or an inability to purchase in the way / time frame they normally would.
At no other time has it been more important to ensure you know exactly what your stock levels are and what they may be going forward, so let’s take a look at how the global pandemic has affected just some industries…
How has the pandemic affected supply chains?
Disruption to the production and manufacturing of products has undeniably been a huge issue throughout the pandemic. China’s Hubei province, where the outbreak began in the city of Wuhan, is a manufacturing hub producing numerous products, including components for cars, electronics and pharmaceuticals.
As the pandemic hit, factories were closed, meaning that production was effectively halted for months until the outbreak was under control, throwing downstream companies into disarray. Closure of ports and airports, as well as rises in air freight charges, have also contributed to supply chain problems.
Some unexpected problems in the supply chain
We’ve all seen shortages in supermarkets for some of the most popular products we buy in the weekly shop, but there have been some really interesting products that have been harder to get hold of due to the pandemic.
A global shortage in condoms
Among the biggest surprises was a global shortage of condoms; the world’s largest producer of condoms, Malaysia-based Karex, was forced to reduce production to comply with stay-at- home orders from the Malaysian government. With other major producers facing the same issues across the world and halting production, alongside restrictions and delays in shipping due to quarantine restrictions, this led to a significant global shortage.
Electronics hit hard
Although the sale of gadgets and games consoles soared during the initial lockdown due to many of us spending more time at home, this peak in demand wasn’t the main contributor to an issue in supplying those of us seeking a bit of entertainment to break the monotony; it was in fact the closure of tech factories across Asia that saw popular gadgets like the PlayStation 4 and Nintendo Switch run out of stock in certain global markets.
The Christmas run up
For many retailers the run up to Christmas is an essential lifeline in increasingly difficult trading conditions. Although a lockdown means more time at home and potential for online sales, it also means less money in the pocket of many unemployed or furloughed workers, and further disruption to the supply chain.
These factors, when combined, are undoubtedly going to lead to volatility in demand, meaning that an understanding of stock levels at all times is vital to ensure you’re not left with large amounts of stock you can’t sell, or a delay in shipping that means you’re left out of stock when you need it the most!
Abacus Valuers has worked with retailers for more than 30 years. If you think your business could use some help navigating these turbulent times and learn how to handle these sorts of supply chain problems, give our team a call on 01637 874609.