Supply-Chain and the impact of surviving a global pandemic

Discussion in 'The Guru's Pub' started by Loobyluggs, Mar 21, 2020.

  1. Loobyluggs

    Loobyluggs Ancient Guru

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    Assuming we all survive this pandemic, there is something on the horizon that I am currently figuring out and that is, the supply chain mechanics, coupled with lack of demand.

    You got raw materials at one end (copper, tin, etc) and you got retail shops at the other - in-between you got all of the level of the supply chain.

    Now then...

    As retail shops shut down, and demand for electronics drop through the floor, this is creating a glut in the supply chain. The simple one is the humble television.

    As new televisions cannot reach the consumer, because no one is buying existing ones; I am led to believe that when this is all over and we can return to business as normal, this glut will lead to everyone in the supply chain wishing to push through old stock as soon as possible.

    Low prices would not be low enough, there would have to be unprecedented levels of discounting, because like musical chairs, no one will want to be left with last year's stock, or, just stock in general.

    This is always the fear of an electronics store - to have lots of dead stock sitting in a warehouse, and, as this is global, this is not fear but will become outright panic.

    I'm jus' spitballin' here...but, Manufacturers sell to Suppliers, who sell to Resellers, who sell to Retailers (or, who are resellers themselves) who sell to you or I. The manufacturers sell in massive quantities to suppliers who then sell down the supply chain in increasingly smaller numbers until, Joe Smith's teevee store, buy 10 of the models.

    As this supply chain is in threat, and, with global JIT (just in time) manufacturing, this will take a while, but I think the whole thing has to potential to fall apart at the seams.

    Even if people buy directly from the manufacturer, this does not matter, as no one is buying televisions whilst the global pandemic is upon us. All of those televisions are just gonna sit in the supply chain until this is over, and then what?

    Not only that, but as televisions are clearly a luxury item, the market will take even longer for these to start moving again.

    Does anyone here work in retail at all, and can you give me some more insight into what the mood is at the HQ, or, if you are in manufacturing, please chime in as I really would like to know more about what to expect from the consumer electronics industry when this is all over.

    Someone is gonna mess up, or, has become too dependent on the global supply chain working perfectly for too long, and this, is now beyond their control...
     
  2. jeffmorris

    jeffmorris Ancient Guru

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    I am very mad at people who "panic buy" stuff like masks, gloves, food, toilet paper, etc. My mother tried to buy more cat food but most stores don't have it. What's wrong with people who "panic buy" stuff?
     
  3. Tiny_Clanger

    Tiny_Clanger Master Guru

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    its the old F you, im alright jack.
    i am not a panic buyer but i do like to keep x amount of stuff in store incase the crap hits the fan.
     
  4. Loobyluggs

    Loobyluggs Ancient Guru

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    Just an FYI to this: I contacted one of the most well-known independent retail chains within the last hour, claiming I could have a 65inch OLED teevee with 89% reduction as the person on the phone said (basically) they have to, as they are losing money like mad right now.

    Make the call people, see what you can get, because if you do not, then someone else will...possibly me (not really, but it is tempting).
     
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  5. jbscotchman

    jbscotchman Ancient Guru

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    Interesting.
     
  6. sykozis

    sykozis Ancient Guru

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    I was at BestBuy the other day and people were walking out of the store with 2 and 3 TV's.... Same thing when I went to Walmart.... People are definitely buying TV's.... Both stores were almost completely wiped out of TV's that are kept on the "showroom" floor. I'd be surprised if the stock room wasn't in similar shape with the number of people I watched walk out with 2-3 TV's.... I've never seen so many TV's rolling across a parking lot at one time outside of "Black Friday"....
     
  7. jeffmorris

    jeffmorris Ancient Guru

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    My mother tried to buy one brand of cat food from three on-line stores but they don't have it in stock. Two stores were supposed to ship cat food to her but she was not waiting anymore and ordered different brand of cat food from one store. I hope that the package comes in a week.
     
  8. Loobyluggs

    Loobyluggs Ancient Guru

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    because of discounts
     
  9. Loobyluggs

    Loobyluggs Ancient Guru

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  10. The Laughing Ma

    The Laughing Ma Ancient Guru

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  11. Loobyluggs

    Loobyluggs Ancient Guru

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    True.

    But, as the story continues, the truth is scarier than Bankers being w*ankers - even if they could get the cash, it would not make a difference, which is why in part, I posted the link.

    Markets are crashing and global supply chains, that have been working for decades; are flimsy things incapable of surviving a global pandemic.

    When the cash machines run out of cash, not even criminals will be able to make money.

    The last time a drug dealer took cashless payment was....oh yeah, NEVER.
     
  12. Irenicus

    Irenicus Master Guru

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    Supply chain remains intact, even in Italy it's never been an issue.
     
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  13. Loobyluggs

    Loobyluggs Ancient Guru

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    The only way the global supply chain would not break down in a pandemic is if the entire system of production was 100% automated with no human beings whatsoever involved.

    So, from raw materials all the way through to the delivery of good/service.

    That is impossible, currently; and the whole system is dependent on NOT having any failures in the production of any good or service.

    "A chain is only as strong as the weakest link" is the most apt idiom I can think of.
     
  14. Loobyluggs

    Loobyluggs Ancient Guru

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  15. k3vst3r

    k3vst3r Ancient Guru

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    Real problem is ship containers, you have lot of containers ships out at sea unable to deliver to ports because no one is allowed dock at the minute. Most of everything arrives on container ships.
     

  16. HeavyHemi

    HeavyHemi Ancient Guru

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    And long term he see it as a positive starting with a better balancing in trade by the 3rd quarter. If you were trying to promote doom and gloom, you picked the wrong article.


    “The problem is no longer in China, where the factories are running at 100%; it comes from European and American customers,” Saadé said, suggesting that box volumes would not start to show much growth around the world through to the third quarter this year.

    Asked about his vision of how world trade might change once the coronavirus recedes, Saadé called for “more balanced world trade”. He denounced “excessive globalisation” which he said would need to be modified.

    “The crisis will be a catalyst for intra-regional developments,” the CMA CGM boss said with production of strategic goods such as health products relocating from Asia.

    However, the CEO of CMA CGM said he was convinced that China will remain more competitive on certain consumer goods, taking televisions as an example.
     

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