Melissa Harris-Perry: [music] This is The Takeaway. I'm Melissa Harris-Perry in for Tanzina Vega, and I have a confession. I have more than a hundred rolls of toilet paper in my basement, all neatly organized on shelves. I'm not proud of the hoarding, but I still just ain't over the great toilet paper panic of 2020. These days, it's actually pretty easy to find toilet tissue, especially at my house, but you might have a serious problem trying to get a new pair of air force ones. To understand why, The Takeaway called an expert.
Robert Handfield: My name is Robert Handfield, and I'm a professor of supply chain management at North Carolina State University.
Melissa Harris-Perry: He helped us to think about the truly global nature of daily purchases.
Robert Handfield: More and more of these supply chains have their origins in places like China and Vietnam and Hong Kong and India.
Melissa Harris-Perry: Remember the devastating PPE shortages of the early pandemic, supply chain?
Robert Handfield: Because China was dealing with their own COVID crisis over there, they were actually halting the exports of goods from China to the rest of the world. They were stopping those shipments at the border.
Melissa Harris-Perry: Today, the US is not facing a shortage of face masks and plastic gloves, but a consumer supply chain crisis continues, a crisis rooted in the pronounced differences in global COVID infections and access to COVID vaccines.
Robert Handfield: For instance, Nike is having shortages of their running shoes because of the COVID outbreaks in Vietnam factories, and that's impacting not just Nike, but Adidas, and everybody else as well. By the way, the Delta variant is responsible for shutting down a lot of these factories overseas. They shut down a large port in China. They shut down apparel plans in Vietnam and in Korea.
Melissa Harris-Perry: The pandemic is not over, and chances are, if you look at the label of your favorite t-shirt or pair of sneakers, you'll find it says, "Made in a nation whose COVID cases are surging." Here to discuss how the COVID-19 pandemic has affected the global supply chain is Tonya Garcia, news editor, and consumer retail reporter for MarketWatch. Thanks for being here, Tonya.
Tonya Garcia: Thank you.
Melissa Harris-Perry: Demand is still high, even though we're in a pandemic. How have retailers had to change the supply chains in order to try to meet that demand?
Tonya Garcia: Well, there's some built-in flexibility to a lot of supply chains. It started where there was some changing on where they were going to get their goods. Trying to diversify whether it comes from China, whether it comes from Vietnam, whether it comes from Bangladesh, trying to add a little bit of diversity to take the dependency off of one particular place. Now, there's really not a whole lot that they can do. They just try to source from as many places as possible and hope that those sources will come through in the end. Really, we just have to get used to shortages here and there where we're going to find them.
Melissa Harris-Perry: Even before the pandemic, there were companies that were trying to do what you're talking about, make their supply chain a little more diversified. Why was this a problem even before the pandemic?
Tonya Garcia: The problem pre-pandemic was actually tariffs. There was a lot of dependency on China, and there was the whole tariff war going on for some time. Companies were bracing for an increase in price. To try and keep prices on the lower end of the spectrum, that's where the diversity was coming in in terms of sourcing. Then, there are issues that we're facing now with things like the ports and finding enough truck drivers to physically get things from point A to point B. Some of those things are where companies and retailers, they can try to build in some flexibility and have tried, but there's only so much you can do when there's a global pandemic happening.
Melissa Harris-Perry: Let's talk about not just consumer goods, but food. What impact is COVID-19 continuing to have on the food supply chain?
Tonya Garcia: First, you have the literal picking and packing of food. Factories, and production facilities, those areas, they're better now. We had the issues early on in the pandemic where there was illness sweeping through these factories, and it was causing an issue. You always have to be mindful that if there is a resurgence, there could be a resurgence at these facilities as well, but separately, the food supply chain is separated so that there's food that goes to the grocery store and then food that's meant to go to event spaces, stadiums, restaurants. When all of that was shut down, the supply chain had to transition so that that food was going to the grocery store as well, because everybody was eating at home and cooking at home. Now, you're going to see perhaps some unwinding of that.
Melissa Harris-Perry: Right. That was, in part, like the toilet paper story. Part of the reason I have a hundred rolls downstairs in my basement is because it's not like fluffy Cottonelle, Charmin kind of thing. It's like that toilet paper that you can get industrial size because we had a small business that we were able to order it from. It wasn't that there wasn't toilet paper, it was that it wasn't going to the home market.
Tonya Garcia: Exactly. There's a lot of folks who may have noticed when they went to the grocery store at some point over the past, say, year, year and a half, that some item that they really wanted wasn't there. There's never been an issue of a shortage of food or a shortage of goods, it's just a matter of where it was being placed. That has to do with the supply chain. The supply chain dictates where items go. Now that everything is on the road to recovery or we're tiptoeing back into regular life, some of that has to revert back so that it goes to the places that we're used to seeing it pre-COVID.
Melissa Harris-Perry: Is there an ethics to consumption now relative to the pandemic? If I know that eating meat will mean that there are workers working in close proximity in meatpacking situations where COVID is happening, or if I'm buying goods from countries where COVID numbers are surging, is it unethical to make those purchases, or should I be making them in order to bring resources to those communities? How do we make ethical choices at this moment?
Tonya Garcia: I think that the past year, year and a half has brought a lot of issues to light about the way that we live, and supply chain and how we treat workers has definitely been one of those things that has, I think, impacted some consumers. Over the past year, we've seen, combined with COVID, issues with climate change that have come up, and that's also impacting the types of choices that people are making.
When you're making these choices under the pressure of a supply chain that's being stretched thin, you might find yourself thinking, well, do I need to eat this? Do I need to buy this? What habits do people develop over the past year? Which ones are going to be sticky, as they say? Which ones are going to stick around once things eventually do get back to normal, and what's going to revert back to the pre-COVID consumption habit?
Melissa Harris-Perry: Listen, I have a seven-year-old. She was actually asking philosophical questions about the age of Santa Claus the other day. Even though it's July, can you help us, parents, out and tell us how this might affect the holiday supply chain?
Tonya Garcia: Unfortunately, for your daughter, toys might be an issue this year. The supply chain is also really time-sensitive for a lot of categories. While we may not be thinking of Christmas in July, a lot of companies already are under normal circumstances. With the supply chain still having its issues and challenges, we're already seeing from analysts that toys could be an issue come the holiday season, the timeline has been thrown off by the pandemic. I'm sure that there is a big scramble happening to keep those challenges and those disruptions to a minimum
Melissa Harris-Perry: Tonya Garcia, news editor, and consumer retail reporter at MarketWatch, thank you so much for joining us this morning.
Tonya Garcia: Thank you.
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