By Daniel A. Pellathy, Michael Burnette and Theodore (Ted) Stank ·
November 9, 2020
To say that these are uncertain times is an understatement. It can be argued that there haven’t been such across the board supply chain disruptions since the end of World War II. For starters, businesses face changes in demand. Unemployment remains elevated while business sentiment on future hires continues to be pessimistic; although recent weeks have seen an abatement in the unemployment rate, future layoffs in industries such as commercial aviation and the oil industry seem inevitable.
These labor market disruptions have taken a significant toll on consumer spending, which declined sharply in the first half of the year and is expected to remain weak for the foreseeable future. Consumers have also changed their spending habits, disrupting traditional revenue streams in a number of industries. And though opportunities exist, many companies aren’t well positioned to take advantage of shifting customer requirements.
Demand disruptions have been exacerbated by supply disruptions. Companies entered 2020 with their supply chains already battered by the ongoing U.S.-China trade war. The pandemic worsened these problems by shutting down key partners, scrambling production and delivery schedules.
Global production, particularly in China, dropped sharply earlier this year and will take time to recover. Meanwhile, distribution networks continue to struggle with shifts in demand, further exposing weaknesses in the supply chain. As companies work to adjust, they are re-learning the lesson that dependable supply chain relationships take time and resources to develop.
By Daniel A. Pellathy, Michael Burnette and Theodore (Ted) Stank ·
November 9, 2020
To say that these are uncertain times is an understatement. It can be argued that there haven’t been such across the board supply chain disruptions since the end of World War II. For starters, businesses face changes in demand. Unemployment remains elevated while business sentiment on future hires continues to be pessimistic; although recent weeks have seen an abatement in the unemployment rate, future layoffs in industries such as commercial aviation and the oil industry seem inevitable.
These labor market disruptions have taken a significant toll on consumer spending, which declined sharply in the first half of the year and is expected to remain weak for the foreseeable future. Consumers have also changed their spending habits, disrupting traditional revenue streams in a number of industries. And though opportunities exist, many companies aren’t well positioned to take advantage of shifting customer requirements.
Demand disruptions have been exacerbated by supply disruptions. Companies entered 2020 with their supply chains already battered by the ongoing U.S.-China trade war. The pandemic worsened these problems by shutting down key partners, scrambling production and delivery schedules.
Global production, particularly in China, dropped sharply earlier this year and will take time to recover. Meanwhile, distribution networks continue to struggle with shifts in demand, further exposing weaknesses in the supply chain. As companies work to adjust, they are re-learning the lesson that dependable supply chain relationships take time and resources to develop.
November 9, 2020
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