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What Are Supply Chain Issues?

An airplane factory
Photo courtesy of Jetstar Airways/Creative Commons

Over the past few months, there has been much conversation about the supply chain issue: talks of prepping for the holidays months in advance, or beginning to buy extra food in case something happens. But what is happening? Many analysts and specialists state that due to the reduction in production of goods and services, the supply chain shortages happening now are the result of society trying to return to pre-pandemic purchasing levels. Another reason that may be causing this is the shortage of workers across the supply chain. Though this may sound frightening, experts say it should only last from four to six months.

As the globe continues to adapt and reopen to the public, the world of businesses is just not ready for it. The supply chain bottleneck is what has been mentioned through the news, but how does that affect the population? A bottleneck signifies a point of congestion in a production system that occurs when workloads (in this case, it would be orders) arrive too quickly for the production process to handle, thus causing delays and higher production costs. Steve Ricchiuto, chief U.S. economist at Mizuho Securities, stated that "the result of that imbalance between supply and demand eliminated all the inventory and eliminated all the grease that allows the wheels of commerce to work smoothly.”

The Biden-Harris Administration made a comment on the situation back in June of this year, but have not given an update since. They stated, “Restarting the economy after a pandemic and a recession has not been and will not be simple. Hundreds of thousands of small and large businesses have to reopen, millions of laid-off workers have to find new employers, and manufacturers have to bring back production lines idled during the pandemic. The Biden-Harris Administration is working to speed up the resolution of these transitory shortages and supply chain disruptions—to make our supply chains more resilient to future shocks and to build back better.” However, the administration has made an effort to try and close supply chain gaps. President Biden announced in October that the port of Los Angeles would begin 24/7 operations to ease bottlenecks ahead of the holiday season.

By Sofia Gomez, Podcasting Director



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