We’re more than a week shy of Halloween, but cargo ship backlogs and pandemic-related shortages of labor and materials have reached a point that parents should get their children’s wish lists ready for Santa before they put on their costumes and go trick-or-treating.
If you start Christmas shopping after Thanksgiving, you’re setting yourself up for a highly stressful December, especially if you want to buy something that requires a computer chip. Game consoles, smartphones, vehicles, workout machines and other electronics are likely to be in extremely short supply.
As an expert on global supply chain management, I suggest families plan far in advance because we anticipate even more supply chain disruptions in the coming months, delaying manufacturing and delivery around the world.
We have so much to be hopeful and joyful about this season — just not reliable inventory and shipping within 12 days of Christmas. If you wait until the weather turns cold before ordering, anticipate that you won’t see the box on your doorstep for six to eight weeks.
From truck drivers to computer chips, shortages are forcing companies and policymakers to try to make quick fixes. But the global supply chain web is complex and interconnected — not curable with Band-Aid approaches. One disruption, such as the Suez Canal closure for six days in March after a cargo ship got stuck or the recent oil spill off the California coast, has domino effects on other supply networks.
Even tech-giant Apple isn’t immune. The company is set to cut the number of iPhones it produces by some 10 million units for 2021 because of the computer chip shortage.
With COVID-19, the world has not been functioning at a normal level for nearly two years. The complete return to pre-COVID-19 markets will not happen in the foreseeable future. It is better for people to get used to this instead of expecting full relief and a complete recovery, especially as we head into the holiday shopping season.
The Biden administration’s policy initiatives are a good start to alleviate bottlenecks. But it needs a better, more holistic approach to be effective.
Extending the working hours at U.S. ports is an effective immediate action to speed up shipments of goods throughout the country. And the infrastructure bill to address U.S. competitiveness and long-term investment in green innovation could help prevent the next supply chain crisis.
But mandating vaccinations in the private sector will further aggravate labor shortages, and requiring global firms to report their proprietary and strategic information to the U.S. government will cause other governments to require U.S. companies that operate in their countries to do the same. Instead of quick fixes, we need to be steady and fair and lead well.
It’s important to note that other countries aren’t necessarily doing better than the U.S. because all of them struggle with similar issues and with limited options.
The U.S. is in a better position than many other countries because our domestic production base of essential grocery items such as food and toilet paper is relatively healthy and sound.
Items such as toys, furniture and manufacturing and entertainment products that need to be imported from Asia may have delays and shortages.
A variety of factors contribute to supply problems, including worker shortages and late arrival of assembly parts from other countries. For example, trade tensions between China and Australia resulted in a lack of coal and steel in China, which halted manufacturing productions.
Demand patterns from consumers have also changed, leading to a strain in production and distribution patterns of major industries including restaurants, hotels, meat processing, beverage and fruit.
When swamped with deliveries for Santa, transportation and logistics industries will focus on priority items — high-value items are the first priority for shipping over smaller, lower-priced items.
People tend to engage in panic buying when faced with uncertainties and rumors, which further aggravates supply chain disruptions.
A new consumer normal is that key items may not be readily available, and many companies are unsure when they will come in. The best approach is to get used to this and find the wisdom and patience to handle it.
The time is now to discuss holiday plans with family members and clarify expectations. Be innovative in diversifying your gift portfolios. Choose items that are available through local and regional sources.
It would be stressful to figure out all gift ideas alone. However, the holiday season can be enjoyable and even memorable if planned, together, in advance. And be sure to mail your Christmas cards earlier.
Paul Hong, Ph.D., is distinguished university professor of global supply chain management at The University of Toledo Neff College of Business and Innovation.