Consumers identify supply chain pain points

A year after struggling to find a place to replenish their household stock of toilet paper, consumers are becoming more familiar with the workings of the supply chain and are increasingly concerned about product shortages, according to a survey from enterprise software firm SAP, released Monday.

SAP polled 1,000 U.S. consumers in February for their perspective on the greatest supply chain “pain points” one year into the Covid-19 pandemic. More than a third (37%) said they have lost confidence in supply chains and nearly half (48%) said they have changed their buying habits to include bulk shopping or restocking household items earlier than they did before the pandemic-induced lockdowns took hold last spring.

“One year ago, 63% of consumers struggled to find a place to buy toilet paper,” the researchers said. “Shelves are stocked now, but there are lasting effects on the broader supply chain. [Thirty-five percent of consumers] say their favorite grocers and retailers are still dealing with out-of-stock issues.”

The survey also found that 70% of consumers switched brands due to supply chain problems, and 29% of them never switched back. In addition, consumers say they are concerned about a lack of supply in 2021, including food (48%), hygienic or personal care products, such as toilet paper (44%), and personal protective equipment (PPE), such as face masks (33%). They are also worried about pending product shortages: 84% of survey respondents said they’re concerned about the availability of electronic components, which are critical to producing everything from smartphones to cars and trucks.

The changing behaviors and shifting attitudes are causing retailers, e-commerce companies, and others along the supply chain to rethink their supply chain management and sourcing strategies. Part of the change includes finding alternate sources of supply to meet demand more quickly or keeping more stock of certain items on hand. Agility and end-to-end visibility remain key components of any good strategy as well, according to SAP.

“More than any singular event in modern history, the coronavirus pandemic has brought the global supply chains’ systemic weaknesses into sharp focus. To restore these links to full strength, businesses need to broaden visibility not only across their own operations but those of their trading partners, with the dual objectives of reducing risk and instilling resilience,” according to Sean Thompson, executive vice president, network and ecosystem, procurement solutions, for SAP. “A key area of focus is the symbiotic relationship between buyer and supplier. By proactively addressing the supplier experience, businesses can benefit from even more than increased resiliency–they also can leverage supplier expertise to identify opportunities to enhance efficiency. Additionally, when buyers and suppliers align on shared priorities, this enables collaboration and knowledge-sharing to improve product and service innovations together.”

Developing digital strategies is also important.

“By embedding direct materials procurement into product planning and manufacturing, and by sharing accurate, up-to-the-moment information enabled by digital networks, organizations can more strategically plan demand, run material requirements, evaluate time horizons, and determine what components are needed where and when,” Thompson also said. “Then, by strategically sourcing materials across a global, diverse supply base connected to a digital network, companies can procure the goods they need when they need it.”