All of this would seem to be an indication of supply chain problems or systems breakdowns. In fact, it’s more about a shortage of employees to support the supply chains and distributions. Some states are even considering calling up the National Guard.
I am an expert on supply chains, and I construct models and algorithms to identify how to enhance their operations as well as to identify their vulnerabilities. Labour problems – and a lack of taking them into account – have contributed in a major way to these delays. My recent paper studied the effect of labor constraints on supply chains and possible disruptions. It quantifies the effects on product flows, firm costs and consumer prices of changes in labour availability and productivity.
Supply chains are an essential part of the delivery of goods to consumers.
From maker to market
As countries evolved from agrarian societies, where food and other goods were consumed close to where they were produced, businesses became more complicated and spread out. Supply chains emerged as networks that tie raw material providers with other suppliers, manufacturers and partners, such as warehouse managers and freight service providers.
Much research has been done on identifying critical links in supply chains, inspired, in part, by various natural disasters impacting supply chain activities. But until recently, few researchers have quantified the impacts of labor disruptions on product supply chains, along with the associated costs.
This may be due, in part, to the fact that previous supply chain disruptions were localized in terms of both geography and time period. Mitigation and recovery procedures reduced the impacts.
Indeed, until the pandemic struck, few people paid much attention to the role of labour in the role of supply chains. And product shortages were few and far between for necessities from toilet paper to cleaning supplies.
#Alabama health officer Dr Scott Harris: “The vaccine is coming...Most of the reasons for [the delay] have been worked out and are behind us. We are going to start adding additional groups of people very soon and will announce that very soon.” https://t.co/we4YGfDV86
The studies, currently in press, reveal the benefits of sharing workers as well as having labour reallocated to different supply chain network activities, as the needs arise. Proper training of workers may allow for greater mobility of labour across distinct supply chains. This has been happening in Europe, where certain airline workers are being retrained to work in health care.
Relaxing constraints on labour, so that they can engage in other supply chain activities as needed, can have immense positive effects on product flows and even firms’ profits. On the other hand, a labour shortage in a single link, be it in freight, storage, manufacturing or processing, can result in a big decrease in product availability.
Until the days that supply chains are fully computerised and automated, labour will continue to be an essential resource that must be nurtured and supported. Getting through this pandemic will depend on labour as a critical resource in supply chains.
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About the author
Anna Nagurney is John F. Smith Memorial Professor of Operations Management, University of Massachusetts Amherst.