Room to Move: Supply Chain Issues Persist

We got through the holiday season, but as 2022 begins, many of the problems that plagued the supply chain throughout 2021 continue. "The strain is lessened, but it's still globally occurring," says Gordon D. Smith, professor in supply chain management at the University of Houston Bauer College of Business. "We may not see it at our ports, but it is still occurring around the globe."

Indeed, the Biden administration has recently touted better movement at those backlogged U.S. ports, signaling the worst of the supply chain crisis is behind us. But experts like Smith warn it will still take months or even perhaps years to alleviate all of the issues caused by the pandemic and the massive ramp-up in government spending over the past two years.

The biggest issue straining the supply chain is the shortage of labor, which has forced businesses to adapt for the short-term. "A lot of companies have taken the opportunity to build extra capacity, employ more people, ramp up production, all those sorts of things," says Smith. "But all of that requires capital."

"Being able to maintain that extra spending in the longer term, or beginning to change their plans on how they operate, is really what's got to be looked at next for businesses," he continues.

Despite the ongoing issues, experts caution that not every empty shelf you see is due to the global supply chain crisis. "We always have issues that happen during the normal global year---weather, freezes in certain regions---companies are prepared for that, they understand there are going to be some slowdowns," says Smith. "In the meantime, your grocery store may not have a product."

Photo: AFP

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