Panic ordering by retailers contributes to supply chain woes
Oct 22, 2021 13:57:06 GMT -5
Post by OmegaMan on Oct 22, 2021 13:57:06 GMT -5
Expert: “Panic” ordering by retailers contributing to supply chain woes
Friday, October 22, 2021 by: Ramon Tomey
Tags: Bubble, chaos, economic collapse, economic reopening, food items, holiday shopping, increased demand, market crash, overstocking, panic, price increases, products, purchasing power, supply chain, supply issues
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(Natural News) The ongoing supply chain crisis has affected stocks of different products worldwide. Experts cite several contributing factors that worsen the issue such as port congestion and energy shortages. Now, another factor they mention – panic ordering by retailers – appears to make the crisis worse than it already is.
One expert in particular says that some retailers are placing their orders too early despite the limited supply. Jonathan Savoir, the CEO of supply chain technology company Quincus, makes this assertion during his appearance in the CNBC program “Squawk Box Asia.” He says: “Suddenly, retailers and manufacturers are over-ordering because of these supply chain issues. That’s just leading to essentially an even worse scenario.”
Savoir’s remarks come amid rapidly increasing demand for products. This sudden spike in demand follows the reopening of many economies and the people gaining extra purchasing power. Companies have resorted to ordering early to keep up with the demand.
The Quincus CEO notes that this practice leads to what he defines as a “bullwhip effect.” The bullwhip effect refers to the small demand changes at the retail level causing progressively larger movements in demand. These movements affect wholesalers, distributors and manufacturers – with suppliers of raw materials set to feel the biggest impact.
“Because everyone is over-ordering and overstocking, manufacturers can’t supply fast enough [and] supply chains can’t keep up fast enough,” Savoir says. This leads to unfulfilled orders and distorted demand forecasts.
Continued at link
Friday, October 22, 2021 by: Ramon Tomey
Tags: Bubble, chaos, economic collapse, economic reopening, food items, holiday shopping, increased demand, market crash, overstocking, panic, price increases, products, purchasing power, supply chain, supply issues
Bypass censorship by sharing this link:
New
www.afinalwarning.com/564250.html
(Natural News) The ongoing supply chain crisis has affected stocks of different products worldwide. Experts cite several contributing factors that worsen the issue such as port congestion and energy shortages. Now, another factor they mention – panic ordering by retailers – appears to make the crisis worse than it already is.
One expert in particular says that some retailers are placing their orders too early despite the limited supply. Jonathan Savoir, the CEO of supply chain technology company Quincus, makes this assertion during his appearance in the CNBC program “Squawk Box Asia.” He says: “Suddenly, retailers and manufacturers are over-ordering because of these supply chain issues. That’s just leading to essentially an even worse scenario.”
Savoir’s remarks come amid rapidly increasing demand for products. This sudden spike in demand follows the reopening of many economies and the people gaining extra purchasing power. Companies have resorted to ordering early to keep up with the demand.
The Quincus CEO notes that this practice leads to what he defines as a “bullwhip effect.” The bullwhip effect refers to the small demand changes at the retail level causing progressively larger movements in demand. These movements affect wholesalers, distributors and manufacturers – with suppliers of raw materials set to feel the biggest impact.
“Because everyone is over-ordering and overstocking, manufacturers can’t supply fast enough [and] supply chains can’t keep up fast enough,” Savoir says. This leads to unfulfilled orders and distorted demand forecasts.
Continued at link