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.
Get some sleep. After you wake up you will see this.
Increase the legal weight to 85 thousand pounds and shut the GD SOB CHICKEN COOPS DOWN!!!!!!!
HOS rules were suspended.
Right now Truckers are our lifeblood.
I would hope the DOT removes Hours of Service limitations for truckers. There are too many critical shipments right now to follow arbitrary limits.
Hours of service mandates break times, hours driven per day and the amount of break time among many other complications
Depends on what you cook.
I can cook pasta, rice, or potato dishes with meat and vegetables cooked as part of the dish and make 20 quarts at a time really cheap. You just need freezer space and you feed a family of two for a week and a half on thirty dollars. Make three of those dishes and the lack of variety is tolerable as long as you keep fruits and chips or crackers around. Probably sweets for people who eat desserts.
or parents working at home
and sadly parents who just lost all their retirement assets
The pessimist in me figures just about the time buying slows down and the supply chain catches up, those “Blue Collar Checks” will come in the mail and many will rush to the store so they don’t get caught “this time”.
“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!”
My thoughts, too. VERY disheartening - but it makes me want to redouble my efforts toward self-sufficiency for me and mine.
This free lesson should not be wasted by any Freeper!
It also helps to know what products are produced in your area, so they will be replenished faster.
For example, ordinary bottled drinking water just needs bottles and a high volume reverse osmosis setup, otherwise they just need abundant tap water. This means that production can increase volume almost as soon as they have the bottles.
Dairies often work 24/7 at near 100% volume, so dairy products will return to shelves when the public has enough to last them for a while, so stops panic buying long enough for the inventory to recover.
Cooking chickens grow rather quickly, much faster than laying chickens. Much pork production is decentralized, so provides more when prices go up.
Seasonal fruits and vegetables are warehoused the rest of the year, so when the warehouses are emptied, that is it until the next season. Freezing and canning also enter the picture.
I haven’t seen anything in my neighborhood that approximates those photos. Nothing.
Thanks for posting, I learned a lot.
In six to nine months the stock market will recover...
‘Your piece’ should be correlated to read ‘your posted piece’
I think it will take two years
but yes eventually
but that’s still a massive destruction of wealth which we didn’t do in H1N1
Prayers up for you!
Be safe out there!
Thank you!
I really don’t see a problem with that, nor does it alarm me that a shortage occurs under conditions like this. The good news is that resources are available to replenish as needed.
When we see the empty shelves on media it makes us tend toward incredulity, when in fact it is normal for a handful of people to act weirdly. The rest of us wait it out, and it works out.
This country has lost it mind..
You have not lost your mind, and you are part of this country. If you look around you, you will find that probably 80% of your neighbors are of like mind. They know idiocy when they see it.
That’s why we have a good President, and we will grow stronger as we deal with this strange condition causing a paradigm shift in our midst.
There’s always a shower or corn cobs. LOL. We are blessed to have TP in the first place. Let’s chop some more trees!
“This republic is in DEEP TROUBLE.”
For decades. The progressive cancer is erupting on the skin now, very visible.
LOL. I don’t know if it’s the same people. My construction on this TP run is that some folks thought they would not be able to leave home for several months, so they applied practical sense as they considered. That’s okay. They have their TP and there’s more to become available.
It may at times be worthwhile to instill limits on certain commodities like we did in WWII, but this I know: Our land is blessed with rich resources in every way. We can give thanks to God for that!
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