Skip to comments.The Retail Supply Chain Has Inverted – Formerly Efficient Operations Now Least Effective – Small Markets Best
Posted on 03/18/2020 1:13:57 PM PDT by Texas Fossil
CTH is spending time on this issue because the food distribution sector is the most important sector in all commerce. Having some familiarity with the supply chain might help people to understand the challenges; and possibly help you locate product.
The Inversion Big chain markets; those who spent millions developing their own proprietary just-in-time distribution networks and automated ordering systems; are currently the least equipped to deal with the level of demand. Meanwhile smaller chains, or mom-and-pops, who rely on third-party brokered distribution are faster to respond.
Several factors have increased retail market demand for food products and non-perishables. People stocking up, kids out of school, some panic shopping (example toilet paper) and now curfews/quarantines have people purchasing more for meals prepared at home. Add in a level of closed restaurants and the demand on retail food markets is severely stressed.
In major urban areas the larger retailers are unable to keep up with demand. This is creating an outward spread as people drive further and further distances to find their needs. Those who travel a distance ultimately stock-up more; thus the outward spider web-cycle is created. Based on ground reports Atlanta Georgia is a prime example.
Depending on the distance from the distribution center [SEE HERE] large regional chain outlets are now in a downward inventory spiral without escape. That is: compared to their needs they are not getting near enough product. So long as demand continues at a level beyond distribution capacity this will only get worse; especially for those stores more than 50 miles from their distribution hub.
Costco announced Wednesday that it will start to limit certain items members can purchase in response to the surge in business from the coronavirus, though specific items were not outlined.
(Excerpt) Read more at theconservativetreehouse.com ...
What is driving it? The Trump haters in the media and the Desperate Dems hoping to defeat him in November.
Has it a name? ComDem Inanity!
Just in Time Supply Chain.
Yet another example of how MBAs are destroying the planet.
“PANDEMIC” = “DEM PANIC”
Dempanic, not pandemic.
Hat tip to an unknown Freeper.
Thanks, you panicky mofos.
As far back as the 90s, I expected that this would go spectacularly wrong someday....
Here’s the thing about efficiency:
It is VERY fragile. A completely efficient system is one long chain of potential single points of failure waiting to happen. If any one link breaks, you’re screwed.
Robust, fault-tolerant systems rely on redundancy to route around failures until they can be fixed.
Very, very true.
The small towns 10 miles from here in either direction are in MUCH BETTER shape compared to large chain stores in a “medium” city that is 45 miles away.
Back in the 90’s I described it as a “Faberge Egg”. Incredibly beautiful, intricate but very delicate.
Our nations supply chains are more resilient and flexible than they've ever been.
What our supply chains CANNOT do, however, is respond effectively to chaotic and disruptive behavior by CUSTOMERS. An empty grocery store caused by a hurricane or earthquake is one thing. A grocery store that has been emptied by hordes of morons buying five or ten times more grocery items than they need is a whole different matter. Lets not hold retailers responsible for the irresponsible behavior of morons.
Excellent comment and points. Thank you.
If you’re looking to blame someone, go to the source: Us.
Those who worked hard, saved money, saved for retirement - and for some crazy reason expected a good return on our 401Ks and IRAs. Which, thanks to those MBAs, has been provided quarter after quarter, year after year.
It hasn’t worked for us for years, I just wish we still had a few independent businesses w/inventory. You have to wait 2 or 3 days for most everything. We order over the internet because the brick and mortars charge freight on orders too.
My son was very sick and working 12 hours a day, we just called and messaged for 2 weeks. He is finally feeling better and needed a few things but all the things he’s out of the stores are out of also. I was able to help but if not he’d be using napkins and paper towels and maybe old socks, lol.
They’re all panicked over the coronavirus, but they always seem to be in packed grocery stores where they can get coronavirus. You’d think they would stay home if they were that scared. Not making sense.
Went to large grocery chain yesterday—no TP. Went to Dollar General a block away—plenty of toilet paper and Paper towels.
And “just in time” inventory systems are like a crystal goblet.
The biggest morons are the government bureaucrats and politicians who have created this panic.
Every GD time one of these morons announces another forced closure or restriction people stampede back to the stores.
I agree that the efficiencies have reduced the excess inventory throughout the system. But there is a lot of BS in this article. If the mom and pop stores have more excess it’s because they have minimums that they need to make, therefor more time between orders and more back stock.
Grocery stores in big cities carry little inventory mostly because they do not have the space. If they miss a day of deliveries they are out of stock on critical items. Now go the other way and shut the city down for a day and they will have no room to put their deliveries.
Distance from the distribution center has little bearing on instock situations.
People need to stop hoarding.
Foolishness. I live in Bentonville Arkansas and we were out of a few things for about 24 hours.
Are we at that very center of supplies? No. We are at the very center of logistic and supply chain innovation.
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