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How have Supply Chain delays affected household goods across the globe?
It’s been three years since the world went into lockdown, and we’re still feeling the effects of what the COVID-19 pandemic did to global supply chains. One of the key issues highlighted by the pandemic was our reliance on interconnectivity, and when that is disrupted, we’re faced with multiple bottlenecks in our global supply chains. This includes the network of people and companies we work with and the types and modes of transport we require to order, manufacture and deliver our goods to warehouses, shops, and homes around the world. When a lack of supply meets excess demand, widespread shortages are the result.
Let’s look at some of the household goods that we may not have previously thought about being affected by supply chain issues and are continued to be affected by supply chain issues around the world:
Vinyl Record Production
In recent years, vinyl records have become increasingly popular, again with younger music fans. This increase in popularity drove vinyl sales to outsell CDs for the first time in 20 years this year. With such high demand, the few remaining vinyl pressing factories in the world found themselves inundated with orders, with so many of their suppliers shut down due to the pandemic, materials used to press records became scarce, and delays of up to 9-12 months in production were announced. This rippled through to the studios and artists releasing music, meaning a lot of artists were releasing new bodies of work, without physical editions being made available to the public, impacting sales across the board.
As of writing, the production of records has increased paced with some record labels aiming to remedy the supply issue by opening their own production factories in more local markets such as Europe and Canada.
Semiconductor Computer Chips
With most people now working remotely, or in hybrid roles, the increased demand for quality tech skyrocketed and is still, as of 2023, highly sought after. The initial spike in demand for semiconductor chips among others started in 2020. One household piece of tech that saw supply issues was the latest home entertainment console by Sony, the PlayStation 5 (PS5).
There were several factors that contributed to the PS5 shortage alongside the global semiconductor chip shortage. Pandemic restrictions meant semiconductor manufacturers had fewer workers. Not only did this impact supply, but this also meant manufacturers weren't able to ship their semiconductors as fast to western markets. Semiconductor manufacturers also had to deal with increased demand. A shift toward working from home saw global demand for mobile devices, data centres, and PCs increase substantially.
Supply has almost returned to normal. We are seeing improvement in lead times across all chip types barring a few. The ones with longer lead times include analogue, discrete, MCUs, and power management integrated circuits (PMIC).
Paper Supply
For more than two years, there has been a strain on the paper supply chain. For the first time since 2014, certain paper makers announced a 10% price rise for both coated and uncoated paper.
In late 2021, the paper industry began to experience yet another acute raw material scarcity. It is difficult for print businesses to operate at their typical capacity because the pulp that paper mills need to make printable paper is becoming increasingly expensive and difficult to source. There are additional factors to consider too, including:
- In 2020, paper mills across the globe cut their staff due to pandemic-related issues.
- Several mills switched from producing paper for direct mail pieces to producing boxes. As the epidemic struck, many paper mills focused on producing cardboard rather than printable paper. After all, online sales were increasing as everyone worked from home, and shippers required cardboard boxes.
- Many paper varieties and grades were dropped due to raw materials becoming scarce.
- 2020 was a bad year for transportation: Airlines urged their pilots to retire early, and the trucking industry reduced staffing levels and tightened timetables.
- The price of freight also grew 20 times from 2019 due to demand.
Unexpected factors that have delayed publications and caused issues in the supply chain are the climate. In early 2022, a ship from Taiwan was stuck in the middle of the Atlantic Ocean, as its entry into the port of New York was delayed by port congestion. 60 containers went overboard due to unfavourable weather, including large waves and strong ocean winds. The ship rolled in the waves, damaging a further 89 containers. Two eagerly awaited cookbooks slated for release that spring were contained inside, and release was unfortunately delayed until a reprint was available.
What can we learn from these instances of supply chain-related issues?
There are many lessons we can take from the past three years when looking at the disruption caused to the global supply chain.
- The value in exploring the new option for sourcing materials from multiple vendors.
- Developing an ongoing supply chain resilience strategy to implement in dire situations.
- Find a trustworthy manufacturing provider who will support you as much as you support them.
- Hire a qualified Supply Chain Risk Manager to be at the forefront of your risk management needs.
