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The Unprecedented Impact of the Pandemic on American Supply Chains

If there’s anything that we learned during the COVID-19 pandemic, it’s that national supply chains are vulnerable. Factory shutdowns in China, a sudden shift in consumer demands, and limited staff to transport goods all conspired to impact nearly everyone in some way.

That’s why there were toilet paper shortages, and some staples were hard to get. It’s also why the postal service is still catching up from Christmas.

As a business owner, you want to know how to prevent these headaches for your customers. The more you understand supply chains, the better prepared you’ll be to meet customer expectations.

You’ll keep your customers happy, instill trust, and grow revenue. Are you ready to find out more about how COVID-19 impacted supply chains and what you can do about it?

Read on to learn more about changes in supply chains during a global pandemic.

Changing Consumer Trends

The biggest shift in the supply chain isn’t with your business. It has to do with your customers. Ecommerce was already a growing sector.

That growth didn’t just accelerate during the pandemic, it exploded. The rate of ecommerce growth this year surpassed projected sales for the year 2030.

That level of growth caused a frenzy during the holiday season. Online shopping records were shattered.

That may seem like good news for most ecommerce stores, but the national supply chain put a damper on the celebrations.

Shipping companies were overwhelmed by the increased demand. Plus, they had to work with fewer staff members to maintain COVID-19 safety guidelines.

The result is that companies had to shift more resources to handle customer complaints.

Increased Automation

Manufacturing was already heading towards automation with the implementation of robotics and the Internet of Things. This is also accelerating because of the pandemic.

Packaging companies found ways to use automation to make up for labor shortages. Automated labelers and cartoners help limit the need for people to pack and label goods.

Food Supply Disruptions

The supply chains in the food industry were exposed to have poor working conditions and COVID-19 outbreaks. Most of the American grown food is exported outside the U.S.

About a third of all vegetables consumed in the U.S. is imported, as is 94% of the fresh fruit.

There were shortages of food early on in the pandemic because of limited trade and meatpacking closures.  

A Return to American Manufacturing

Have you tried to get fitness equipment to work out at home during the pandemic? Kettlebells and dumbbells are in short supply because of consumer demand.

That’s not the entire story, though. Most of the kettlebells and dumbbells get manufactured in China, along with many other goods and supplies sold in America.

Businesses turned to Asia because of cheap labor. That would increase the profitability of the items sold.

That model got turned on its head when Chinese factories closed for weeks at a time. Even now, they still have a huge backlog of orders and operate at less than 100% capacity.

Instead of cashing in on record sales, companies got stuck with a ton of demand and no way to fill orders.

Some are advocating for a return to American manufacturing. This can help shield companies from suffering during the next pandemic and promote American made goods.

Vaccines and Supply Chains

Just about every country on earth wants to get their populations vaccinated as soon as possible. That puts manufacturing and distributing the various vaccines at a high priority.

Can this change impact your own supply chain? It certainly can. Resources like refrigerated storage containers are being diverted to vaccinations because the vaccines have to be refrigerated to be effective.

Shipping and transport companies prioritize vaccine distribution over other areas, like delivering ecommerce packages.

There’s a strong possibility that some industries will be impacted for several months while the vaccines are the top priority.

American Supply Chains After the Pandemic

People are always asking if and when will things return to normal. You should assume that things won’t ever return to normal.

Yes, government restrictions will lift so you can resume business activities, but there are some changes brought on by COVID-19 that are here to stay.

What can you do to safeguard your business? The first is to diversify manufacturing. You may need to split duties between a factory in Asia and one in the U.S.

You also need to look at your transportation options. We learned that shipping partners have limited capacity to function during these times.

You can be sure that this won’t be the last global pandemic that you face. You can look into other freight options like heavy haul trucking.

It’s also important to get your house in order. Customers are unrelenting, and they expect the entire customer experience to be flawless. Customers also expect your prices to remain low, even if you bring some manufacturing back to the U.S.

This moment is an opportunity for your business to get ready for the future. Take the time to look at your entire supply chain and customer touchpoints. Look at ways to maximize efficiency because you still need to be profitable.

Developing Your Supply Chains

Your supply chain is a critical aspect of your business. You learned over the last year that supply chains in America are vulnerable. This is a major test for your business, but you can come out stronger by understanding what happened and why.

You’re going to have to find ways to adapt, whether you adopt more automation or bring manufacturing onshore. Consider this a time to look at your business and maximize efficiencies wherever you can. You’ll be able to meet customer expectations without missing a beat.

Take a look at the Technology section of this site for more tips and insights.

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