TECHNOLOGY

Black Friday shopping will be complicated by supply chain disruptions and shortages


Best Buy has revealed a strange way to take advantage of worldwide shortages and shipping delays: subscriptions. The company announced this week $200 per year program Which promises consumers lower prices and exclusive access to hard-to-find devices. While the new membership also includes 24/7 tech support and free shipping, the idea of ​​guaranteed product availability may be particularly appealing to shoppers worried that their orders won’t arrive in time for the holidays.

Best Buy’s new service is a stark reminder that retailers don’t expect supply chain issues, including The global shortage of semiconductor chipsYou will be moving anytime soon. In fact, it seems to be getting worse. supply crisis Petrochemicals, which are used in everything from paint to plastics, have raised prices for all kinds of products. while, emerging energy crisis In China, it led to power outages that closed factories and disrupted daily life there. These recent developments are exacerbating existing problems in the global supply chain and worsening logistical bottlenecks. Combine that with The constant shortage of shipping containers And truck driversThe end result is a significant slowdown in the delivery of goods.

“You have business issues. You have issues with not having empty containers and space on ships.” John Gould, vice president of supply chain and customs policy at the National Retail Federation, told Recode, “Port congestion here in the United States, and workforce issues with a chauffeur. Trucks and warehouse workers.” “The whole system has stretched.”

As retailers race to import the goods and gadgets they think consumers will want during the holiday shopping season, the growing list of shortages It made it difficult for them to find enough stock. Now, experts say consumers should expect higher prices, delays, and opportunistic merchants as Black Friday and Internet Monday approach. And over the next six months to a year, we won’t see the same variety of products we’re used to, according to Patrick Benfield, supply chain professor at Syracuse University.

Supply chain problems are getting worse

Tools are particularly vulnerable to shortages because they contain so many different ingredients. Consider all the parts that go into a new PlayStation 5 or laptop, including chips, outer casings, and screens. Many of these components require their own specialized manufacturing facilities, which are typically located in different plants and often in different countries. In order for the device to be delivered on time, all these parts must be synchronized. At the moment, this is not happening.

“A lot of people working on this don’t really understand how diverse all the components that go into supply chains are,” Willie Shih, Professor of Business Administration at Harvard University, Recode said in August. “They don’t understand that I need capacitors. They don’t understand that I need power management chips. They don’t understand that I need inductors.”

Demand for these components has been met with efforts to contain Covid-19 in countries where many commodities are already produced and assembled. Amid the recent outbreak of variable delta and national lockdown in MalaysiaAnd Government Designated electronics manufacturers Important business so that production can continue. In May, Vietnam Direct vaccines to factory workers, with smartphone manufacturers operating in the country, such as Samsung, urged to do the same. (Vietnam’s Covid-19 challenges have not gone away: Last weekend, tens of thousands of workers fled from The commercial center of the country After the government that still Struggling to get vaccinatedand lifting the restrictions of the epidemic closure.)

Now, planned blackouts aimed at reducing energy use in China are making electronics manufacturing increasingly complex. This situation is the result of several intertwined problems, including Global increase in fossil fuel prices; A dispute between China and Australia, which is one of the The main suppliers of coal in the country; China’s efforts to reduce pollution Before the Winter Olympics. The resulting power outages had a devastating impact on people’s daily lives and travels Some homes and classrooms without electricity and water.

China’s energy crisis has also forced many factories, including those that manufacture components for it Apple, Dell, Tesla and Microsoftto stop or reduce production. Meanwhile, the country’s electrical appliance manufacturers and automakers are preparing for the next metal shortage Limited metal smelting operations. lack of energy She also hinders Companies responsible for things like chip packaging, chip testing, and phone assembly.

Above all, the lack of petrochemicals derived from oil, It made producing all kinds of merchandise more difficult and expensive, including paint, adhesives, and food packaging. In recent weeks, the price of polyvinyl chloride, a chemical used to make plastics, has skyrocketed 70 percent. Without these raw materials, makers of everything from credit cards to medical devices to cars are finding it more difficult to keep up with production.

“What will happen is the phone will be delayed because they are waiting on their plastic supplier, and the plastic supplier is waiting for the component,” said Benfield, the professor at Syracuse. “It only takes one supplier — and it may be the supplier of the core components — to mess up your entire supply chain.”

Disruptions in petrochemical manufacturing have many causes, but some are related to companies that have not yet recovered From a winter storm in Texas and several recent hurricanes along the Gulf Coast. This correlation illustrates how extreme weather exacerbated by climate change has unexpected ripple effects across many industries.

Rethink the holiday season

All of these problems mean that consumers are seeing price hikes and shipping delays for a wide variety of products. So those looking forward to the holiday shopping season may want to start early, and not just on consumer electronics. Like Vox’s Terry Nguyen I mentioned last monthAlmost everything people might want to buy for the holidays seems vulnerable to hurdles in the global supply chain:

Below is an incomplete list of consumer goods that have experienced delays, delays and shortages: new clothesAnd Back to school suppliesAnd bikesAnd pet foodAnd feeAnd House furnitureAnd carsAnd technical toolsAnd children playAnd household applianceAnd WoodAnd Anything based on semiconductor chips, and even desirable fast food items such as chicken wingsAnd ketchup packetsAnd Taco BellStarbucks cake balls, And McDonald’s Milkshake (In the UK, for now).

“Most likely, there will be some shortages of certain products during the holiday season,” said Sekin Ozkul, of the University of South Florida’s Supply Chain Innovation Lab. “So if consumers know what they want to buy for their loved ones this holiday season, now is the time to act on it.”

In addition to buying early and paying more, there are other ways customers can adapt. Shoppers should consider purchasing products that are not their first choice, as some items, such as the PlayStation 5, are likely to be in short supply. Until sometime next year. When buying online, it can be helpful to research to see if local stores have the option to pick up the curbside. (One useful tool for this is Google Shopping, which can include information about where an item is in stock at nearby retailers.)

Another strategy is to avoid online shopping altogether and buy items in stores, the old-fashioned way. Bigger chains like Walmart and Home Depot have it Resources to rent their own cargo shipsThey seem to be less likely to run out of items. Best Buy is hoping, of course, that some people will consider paying $200 to secure access to needed products, though the company hasn’t shared what products this program will include.

No matter how customers choose to prepare, they should not assume that supply chain problems will be resolved before the holidays. Given how easily other deficiencies are exacerbated, there doesn’t seem to be an end date in sight.



Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button