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Supply chain experts: no need for COVID-19 stockpiling

PHILADELPHIA (KYW Newsradio) — With the rising number of COVID-19 cases, some consumers are concerned about the availability of products on store shelves in coming weeks. Experts in supply chain management and analytics say there have been lessons learned from the beginning of the pandemic.

“I’m going to prepare stocking up with food, paper towels, toilet paper all sorts of the essential items just in case,” said Marc Katz of Plymouth Meeting.

Consumers in the region like Katz are concerned with increasing COVID-19 numbers and worried that the shelves at stores will be as bare as they were in March and April. But things have changed since the start of the pandemic.

“The supply chain is very good,” assured Dr. Kathleen Iacocca, associate professor at Villanova University’s School of Business.

“It’s very adaptable, it’s very strong, it’s learned, it’s prepared and you’re going to see a much more improved process this time around.”

Iacocca said suppliers have ramped up inventory, production and distribution and are ready to go. Now, she said, analytics and shopping patterns are being used to determine what products are needed in certain areas and how much, even if you are stockpiling products in your basement.

“Unless you are lining your floors with paper towels, these stores, even though they don’t necessarily know what’s in your basement, they know the rate of consumption, and that’s all through analytics,” she explained.

And the data is compiled from things like store shopping cards and credit cards which are tied to your household.

According to Iacocca, manufacturers have worked closely with farmers and suppliers to ramp up their raw materials.

“Many have worked with the distributors to talk about getting their products to the stores faster and more efficiently,” she added.

“Some have even looked at packaging and changing their packaging modeling so they can fit more pallets in the truck at one time or have a more efficient unloading method,” she detailed. “So the supply chain has looked at where they can increase efficiencies and where there were issues in March, and how they can improve.”

Other experts, like Dr. Subodha Kumar, a professor at Temple University’s Fox School of Business, say the new and improved system isn’t perfect just yet, and that the stockpiled merchandise in people’s households is causing some concerns among suppliers.

“A lot of suppliers are worried that if they start producing a whole lot, this time people will not buy as much, not because (the consumers) are panicked, (but) because they have a lot of it already,” he said. “Suppliers don’t know and that is messing up the system.”

Kumar said some companies have opened warehouses near communities to store merchandise instead of trucking it long distances in an effort to speed up deliveries.

“Amazon has interestingly has bought lot of stores in outlet malls that they are going to use as local warehouses,” he said.

Service for online home deliveries has improved as well.

Kumar said systems have improved but it’s not perfect. He warned people to prepare to possibly pay more for items in places like grocery stores.

“We saw a huge increase in a lot of items between February and August. Some of the meat items went more than 10%, the beef products went more than 20%,” he reported.

“And on top of that we don’t know how bad this is going to be, the COVID increase, whether it is temporary or it will go on for three or four months after. That’s also messing up the system.”

According to Kumar, it’s not certain how consumers will react when it comes to panic buying, but he also expects there will be a lot less than what was seen in the spring because people have a bit more experience with the system.

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