UCI Experts On: Supply chain
- November 23, 2021
- Gustavo Oliveira and Li Zhang, global and international studies, offer insight on the supply chain crisis and alternative solutions for holiday spends
As we near the busy holiday shopping season, news of supply chain issues has many worried about shipping delays for hot item gifts. But is this issue new or something that’s been a long time in the making? UCI global and international studies' Gustavo Oliveira, assistant professor, and Li Zhang, researcher, dive into these and other critical questions about the global supply chain crisis in this episode of the UCI Social Sciences Experts On series. The researchers are part of a study funded by a $1 million grant from the U.S. Department of Agriculture’s National Institute of Food and Agriculture that’s looking at how COVID disrupted supply chains. While their study is focused on food products, the issues they are examining are connected to problems across all supply chains, where prices of shipping containers and pallets have been on the rise for several years.
“The supply chain crash we saw at the beginning of the pandemic, and the crisis that we see exacerbating now, are not simply the result of the pandemic or short-term policy decisions,” says Oliveira. “The conditions that create this vulnerability to disruptions come from decades of just-in-time logistics and production worldwide. By limiting stocks and accelerating flows, corporations increase profits, but structurally sacrifice supply chain resilience - alongside the well-being of workers and the environment.”
This means that companies have less products in storage and depend on the timely delivery by upstream suppliers, so if there are any delays or disruptions in one of the suppliers than the whole supply chain downstream is affected, says Li. “This risk increased in recent decades because of the growing concentration of production and trade among a few large-scale multinational corporations. They increased the length of the global supply chain, but they also created bottlenecks where small disruptions can cause significate impacts.”
The world saw these effects when COVID lockdowns and panic buying left grocery store shelves bare and consumers paying more than triple than the norm for everyday items. But we also saw the rise of ecommerce and other alternative distribution channels, she adds.
The buying and exchange habits that transpired at the outset of the pandemic are not unlike what you might see in times of other crises, like a hurricane, but what’s different here is the length of time the pandemic has required these systems to operate and the importance informal, less established networks have played, says Oliveira. “We’re interested in how some of these new systems might be sustained, how old systems that we recognize as highly vulnerable to disruption might be better adapted for resilience during future catastrophes, and what these changes mean for communities involved in the processes.”
Oliveira and Li shared these observations with their research networks and together formed a team to investigate how the pandemic disrupted mainstream food supply chains and whether more local and regional food supply chains can provide more resilience. The team includes economists, landscape architects, communication specialists, and other interdisciplinary social scientists and political ecologists at the University of Florida, University of Wisconsin Madison, University of Minnesota, and Kansas State. University.
“We are still evaluating specific differences across various crops and commodities, and different impacts across different actors,” says Oliveira. “But one thing that became very clear for us right away when we began looking at our data is that California suffered more impacts than the Midwest and Florida during the early stages of the pandemic, especially in the distribution and retail end of food supply chains.”
In a way, we can say that California is a victim of its own success, says Li. “Companies from agribusiness to Amazon that are built on just-in-time logistics and ecommerce have major choke points here. California also has a very vibrant labor movement. This vulnerability of corporate supply chains creates opportunities for workers from factories to ports and warehouses to go on strike in these choke points and force major corporations to increase wages, provide better benefits, and improve working conditions and the resilience of our economy for everyone’s benefit.”
So back to the original question - the disruptions continuing in the supply chain have been building for some time and they will inevitably impact the shopping season, says Oliveira. “But while we may see some of our orders delayed, maybe this also presents an opportunity to reevaluate how and what we spend during the winter holiday season.”
“Maybe instead we can use this as an opportunity to shift emphasis from shopping to family time. Taking a break from consumerism may offer a welcome respite for people to think about other ways to show appreciation and thankfulness for one another, sharing skills like art, cooking and time without relying on imported or manufactured things,” says Li.
“And we should also think of supply chains not just as consumers, but also as workers who can leverage power for the benefit of the majority.”