A few months ago, it became national news that Starbucks was experiencing shortages in key ingredients for their beverages such as peach and guava juice. At numerous locations, consumers were unable to purchase the popular Starbucks “refresher” drinks. This shortage not only included juices, but also cold brew, breakfast sandwiches, and their famous cake pops. These supply chain issues were not limited to just Starbucks, but rather businesses all across the United States.
During the Covid-19 lockdown, many manufacturing plants closed down and limited the number of goods they were producing. Not only could they not safely have hundreds of individuals working at their plants, but there was overall low consumer demand. Once restrictions were lifted and individuals went back to work and to their pre-pandemic routines, demand skyrocketed for products that were being produced in low quantities during the pandemic. Although normal production has resumed, consumer demand is higher than pre-pandemic times and the manufacturing industry is trying their best to keep up, although this has proven difficult.
One challenge for manufacturers is hiring enough staff to keep up with the consumer demand. A large number of people are required to run the manufacturing plants, as well as distribute and transport goods. Consumers are also experiencing shipping delays due to the smaller post-pandemic workforce. The cost of driving a truck across the United States has nearly doubled since the onset of the pandemic, and the cost of shipping internationally has quadrupled according to a global pricing index by Drewry Shipping Consultants.
Supply shortages have ranged from takeout containers, an indispensable resource for restaurants to stay afloat, to computer chips that have decreased the production of cars, to kitchen appliances. The cost of materials has been increasing faster than ever, with the cost of non-microwavable containers going up three times in the past 18-months. A case of disposable gloves, which used to cost $20, now is priced at $60-$80.
What do these supply shortages mean for your business? Have you been affected by the increase in the price of basic goods or by the increase in the cost of shipping? What we can learn from the ongoing supply shortages is the importance of looking at all possible business outcomes and coming up with a rough action plan to respond. For example, coffee shops are having difficulty finding 8 oz. carry out cups, and a possible solution would be to provide discounts for bringing in your own container, or removing the smaller size and pivoting to a different sizing model.
We can also apply this same logic to security issues. The scary truth is that we have no way of 100% accurately predicting the future, and our next greatest tool is the ability to plan ahead and anticipate issues. Looking at your current business and finding gaps in security will provide you the peace of mind that if an accident or tragedy occurs, you are ready to respond.
Take the initiative today and contact info@evansbrothersconsulting.com or call 617-545-1500 to set up a short, no-cost, preliminary discussion.
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