Posted on 03/17/2020 1:34:44 PM PDT by LibWhacker
Empty Shelves? – Understanding Supply Chains, Logistics, and Recovery Efforts…
By now everyone is familiar with the abundant pictures on social media of empty shelves in local stores. Having some familiarity with the supply chain might help people to understand some of the challenges; and possibly help locate product. (Pics from Twitter)
There are essentially two types of distribution centers within the retail supply chain for most chain markets, food stores and supermarkets. The first type is a third party, or brokered, distribution network. The second type is a proprietary, company owned, distribution center. Knowing the type of distribution helps to understand what you can expect.
If your local retail store is being replenished from a third party distribution center, you can expect greater shortages and longer replenishment times; we will see entire days of empty shelves in these stores. However, if your local retail store owns their own warehouse and distribution network, the replenishment will be faster. In times of rapid sales, there is a stark difference.
These are general guidelines: An average non-perishable distribution center will replenish approximately 60 stores. Those 60 stores will generally not extend beyond 100 miles from the distribution center. The typical company owned warehouse will have approximately 20 tractors (the semis) delivering trailers of goods to those sixty stores.
In this type of network… On a typical day a truck driver will run three loads. Run #1 Delivery-Return; Run #2 Delivery-return, Run #3 Delivery Return. End shift.
If every tractor is operating that’s a maximum capacity of 60 trailers of merchandise per day. Many stores receiving more than one full trailer.
A typical store, during a non-emergency, will receive 1 full trailer of non-perishable goods three to five times per week. However, under current volume the purchased amount of product is more than triple normal volume. It is impossible to ship 180 trailers of merchandise daily to sixty stores with 20 fixed asset tractors. This is where the supply chains and logistics are simply incapable of keeping up with demand.
Thinking about distribution to a 100 mile radius. The stores closest to the distribution center will be delivered first, usually overnight or very early morning (run #1). The intermediate stores (50 miles) will be delivered second, mid-morning (run #2). The stores furthest from the distribution center will be delivered third, late afternoon (run #3).
So if you live close to a distribution center, your best bet is early morning. If you live in the intermediate zone, late morning to noon. If you are in the distant zone in the evening.
The current problem is not similar to a holiday, snow event or hurricane. In each of those events typical store sales will double; however, during holidays or traditional emergencies the increase in product(s) sold is very specific: (a) holiday product spikes on specific items are known well in advance and front-loaded; and (b) snow/hurricanes again see very specific types of merchandise spikes, with predictability.
In the current emergency shopping pattern the total business increase is more than triple, that’s approximately 30% more than during peak holiday shopping. Think of how busy your local store is on December 23rd of every year. Keep in mind those customers are all purchasing the same or similar products. Now add another 30%+ to that volume and realize the increases are not specific products, everything is selling wall-to-wall.
Perishable and non perishable products are selling triple normal volume. This creates a replenishment or recovery cycle that is impossible to keep up with. The first issue is simply logistics and infrastructure: ie. warehouse (selectors, loaders), and distribution (tractors, trailers, drivers). The second issue is magnifying the first, totality of volume.
A hurricane event is typically a 4 or 5 day cycle. A snow event might be 2 days. The holiday pattern is roughly a week and all the products are well known. However, the type of purchasing with coronavirus shopping is daily, everything, with no end date.
Once the store is wiped out, a full non-perishable recovery order might take four tractor-trailers of merchandise. In our common example, if every store needed a full recovery order that would be 240 tractor-trailers (60 stores x 4 per store). This would need to happen every day, seven days a week, for the duration of the increase. [And that is just for the non perishable goods]
That amount of increase is a logistical impossibility because: (a) no warehouse can hold four times the amount of product from normal distribution; (b) the inbound supply-chain orders to fill the distribution center cannot simply increase four fold; and (c) even with leased/contracted drivers doubling the amount of tractors and trailers, there’s still no way to distribute that much product.
Instead what we see are priorities being assigned to specific types of product that can be shipped to maximize “cube space” in outbound trailers going to stores. A distribution center can send 100 cases of canned goods (one pallet) in the same space as 15 cases of paper towels or toilet tissue (one pallet). So decisions about what products to ship have to be prioritized.
Club stores (ex. BJ’s, SAM’s, or Costco) can ship bulk paper goods faster because they do not carry a full variety of non-perishable items. The limited selection in Club stores naturally helps them replenish; they carry less variety. Meanwhile the typical supermarket distribution center has to make decisions on what specific goods to prioritize.
Nationally (and regionally) the coronavirus shopping panic is far outpacing the supply chain of every retailer. Instead of a weeks worth of food products, people are now trying to purchase a months worth. Every one day of coronavirus sales is equal to three or four normal days.
To try and get a handle on this level of volume we will likely see changes in operating hours. Expect to see stores closing early or limiting the amount of time they are open every day…. the reason is simple: (1) they don’t have the products to sell over their normal business hours; and (2) they need to move more labor into a more compact time-frame to deal with the increases in volume.
It appears to me that the people hording can only horde so much. After a few days, or a couple of weeks supplies should begin to return
I did a quick recon to the ‘podunk’ little town closest to my ‘compound’ yesterday afternoon.
Without going into the details, I’ll just report that there were about three times as many shoppers in the store than I had ever seen in there before; Only a few areas of the shelves were bare, and no one or their pets were going to go hungry or thirsty, even if they couldn’t get precisely what they want.
The manager of the (independent) grocery store, when asked “How are you coping with the demand?” said: “I’ve been expecting a delivery truck since this morning; If he doesn’t show up, I’m going to be hurting tomorrow.”
As I was pulling out of the parking lot, a ‘semi’ was pulling in to the alley behind the store... I hope it was his delivery, and full of the things needed most.
“Okay, not particularly well-written”
Of course not. But the blogger known as “sundress” (Mark Bradman) is or was a grocery clerk. On the other hand, anyone with a computer and internet connection could have churned this out.
A relative of mine could find a way to stuff the TARDIS to where it would barely standing room.
LOL!
I’m checking my local grocery store every day to try and catch the new products they add to the shelves. Today they had bottled spring water. I got the last 8 pack of Brawny towels. Still no toilet paper but they had boxes of kleenex. Limit of two.You take it day by day.
It’s not surprising at all that there would be bare shelves... this is “just in time” shipping. If you think about it, no store would have a 6 month supply for the entire population of toilet paper.
But when something happens, they sure sell out quick!
Ha! That’s why I’ve always tried to stay on good terms with all my neighbors, and especially their children! I’ve seen pictures of some badly “papered” trees and have NO IDEA how I’d clean it up... Get out there with a hose and try to wet it all down so it was too weak to hang onto the branches, I guess... But basically, no idea! I imagine it’d be a lot of trouble.
When I went to WM yesterday, it seemed like everyone had gallons of water in their cart. That one was difficult to figure out. You can’t boil newspapers to make buttwipe but you can boil water to make it potable.
One of the stores I was referring to is an Aldi.
They had milk and eggs today, but were limiting sales to two dozen/two gallons per customer, and the fresh meat section was stocked at about 10% capacity.
Those were the days!
Other than being out of toilet paper nothing seems amiss in my local Aldi.
YES this country has lost its mind, and it has become very distressing to see just how EASY it has been for the government in this country to take everything over!! VERY distressing to see this kind of PANIC in American citizens AND how easy it was for the MSM to create this panic!! This republic is in DEEP TROUBLE and that scares me a hell of a lot more than this damn flu like virus!! WE have become a nation of snowflakes very eye opening!!
Last Friday night mine was totally out of fresh fruit/vegetables except for cucumbers and some lettuce, totally out of fresh meat, totally out of bread, nearly out of pasta.
This is my business. We’re getting our wheels run off, but we’re keeping up for now. I’ll be brief because I need to lie down so I can safely start again at zero dark thirty tomorrow.
We’re not seeing a shortage of goods right now. Production can be ramped up. More tractors and trailers are readily available. What you can’t get more of any time soon is safe, competent, veteran drivers. You can’t train enough of them in time to get this situation back under control. The distribution bottleneck is or will soon be drivers’ productive capacity—HOURS.
Commercial drivers’ hours of service are limited and tightly controlled by the federal motor carrier regulations. There’s already a provision in the regs to suspend hours of service limits on drivers hauling freight to the relief of officially designated disaster or emergency areas. Right now the entire country is under an emergency declaration. The feds need to suspend the hours of service regs until this situation is stabilized. If you think it’s bad now, think about how the speculated infection rate would thin the ranks of the already inadequate qualified truckers we already have. This approach would at least counterbalance that.
I’d run seven days a week until this emergency is handled. I think most of the guys I know in this business would be proud to do the same. You wouldn’t need to pay us more per hour or per mile to save everybody’s bacon, but the government would need to remove our leashes.
I’m already seeing less chaos in local supermarkets. Yeah, they’re still busy as hell, but not as bad as it was 3 days ago.
I’ve been going to Meijer and Kroger both almost every day. Lots of empty shelves, but I expect it won’t be long before we see them more consistently stocked.
I went to Meijer at 830 am today. They were virtually out of chicken, and they didn’t have much pork except for ribs and hams. Lunch meat rack was barren, as were all the impulse buying racks they try to lure you with as you proceed to check out.
Still, I was able to get what I went for. Plenty of fresh produce, 4 lb of ground beef and eggs. I forgot mushrooms so I went to Kroger at about 130 pm and got some. Kroger produce was not well stocked at all compared to Meijer. To the author’s point, Meijer has a distribution warehouse in the area. If Kroger does, I haven’t heard about it.
Anybody ever wonder why animals don’t need toilet paper, and don’t generally walk around with filthy asses?
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