With most Americans now banned from eating in restaurants or going to many businesses where they might consume products, they are attempting to find those products at their local groceries for home consumption. Despite reports of vegetables being plowed under and milk being poured out by farmers who can’t sell them, Americans instead find bare shelves. Jennifer Smith explains why in The Wall Street Journal:
Images of empty supermarket shelves—while farmers dump milk and other foodstuffs—are delivering a stark lesson in the challenges of shifting goods from commercial to consumer supply chains as the coronavirus pandemic shakes up demand.
Experts say there is plenty of toilet paper and food in the U.S. But rerouting goods to consumers that were produced at industrial scale—big toilet paper rolls for college dormitories or yogurt bound for factories that churn out breakfast parfaits—involves more than a phone call or quick email exchange.
The rapid shutdown of much of the U.S. economy delivered unprecedented shocks to the largely separate systems that supply businesses and consumers. Both rely on vetted networks of producers and distributors and other middlemen to deliver goods in ways that are tailored to specific markets.
“All those contracts produce lots of rigidity,” said Nallan Suresh, a professor of operations management and strategy at the University at Buffalo School of Management. “You’re not able to easily shift supplies from one channel to another.”
Experts say the gap between the industrial and consumer supply chains grows larger at virtually every step of the process. Erasing the differences, they say, would require expensive investment with little promise of a payoff over the long term.
Wholesalers that sell to both retail and food-service customers can try and leverage existing relationships with grocers to offload some bulk products. But stores configured to sell consumer-size goods may not have space to store and display hefty sacks of rice and giant jars of mayonnaise.