How Home Renovation Projects Have Exposed Supply Chain Fragility

Supply Chain Fragility

Like many people around the world, you’ve probably been working from home for the past six months. Perhaps you’ve also been monitoring your children as they navigate the improvised labyrinth of online learning. All day, every day, you’ve been immersed in your home environment far more than you ever thought you would be. It seems like you’re constantly preparing food, loading the dishwasher, doing laundry, getting snacks, and engaging in a seemingly infinite number of other mundane activities that have turned your quiet home into a concerto for frazzled knowledge-worker soloist and obsolete-appliance orchestra.

If this is you, then perhaps your familiarity with your home has bred contempt for its flaws. Perhaps, you reason, if you’re to be imprisoned in your home during the dreaded second wave of the pandemic, it’s time to switch things up a bit, time to retire your veteran appliances and draft in a new generation of smart, reliable, even luxurious items that will allow you to cook, wash, and clean with twenty-first century efficiency.

Unfortunately, you’re not the only one who feels this way. Unprecedented demand for appliances during the pandemic means that retailers are having difficulty keeping them in stock, leading to shortages and extended wait times for even basic models. Other technology devices, such as laptops, experienced a similar surge in demand at the beginning of the pandemic, only to discover that their traditional supply chains have been unable to keep pace. Many market analysts are concerned that this could have serious implications for Black Friday sales in November, an event that, in conjunction with the December holiday season, typically allows retailers to meet most of their revenue expectations for the entire year. This would be particularly important after economic devastation wrought by the COVID-19 pandemic.

Yet consumer demand is only part of the story. Another important element is the impact the pandemic has had on the manufacturing supply chain. In March, many manufacturing facilities around the world had to shut down. This impacted not only the end manufacturer of the appliances, but the manufacturer of every component of the appliances. With a global supply chain that stretches from China to Mexico to the United States, every parts manufacturer, no matter how small, is a potential point of failure that eventually leads to product shortages. Now that most manufacturers are operating again, they are doing so with stringent COVID-19 protocols that include physical distancing, enhanced personal protective equipment (PPE), and increased cleaning schedules. While these protocols are vital for protecting workers and keeping the work environment free from the virus, they also mean that the facility operates at reduced production capacity.

In response, manufacturers are reducing the number of models available and focusing on only those models that have full parts availability. That means fewer options for consumers and longer wait times for special order items or customized options.

While there is little manufacturers can do to predict consumer behavior or alleviate the requirements of safety protocols, the pandemic has provided a timely lesson on the importance of a resilient supply chain. While many organizations have assumed that their supply chains are resilient all the way down the line, the pandemic has openly exposed the fragility that lies just beneath the surface. Multiple points of failure, a lack of transparency into suppliers, and poor communication and collaboration among suppliers are, as we’ve learned, readily apparent at the first sign of stress, particularly in complex, global supply chains that reach into some of the countries hardest hit by the pandemic, such as India, China, and the United States.

Before the world can resume some semblance of normal operations, supply chain professionals will need to look deeply into their supply chains and address weaknesses and fragility they didn’t know existed. This will include prioritizing suppliers to ensure that the requirements for core products can be met, getting to know all the suppliers along the chain, and maintaining regular communication with every supplier in the chain. This will help organizations not only rebuild their current supply chains, but to infuse them with a resiliency that can withstand the next catastrophic event in an increasingly unpredictable world.

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