By John Jones, Director, Strategic Projects, OC Reilly, Inc.

(Feb. 14, 2022)—For the first time in most economists’ memories, a rapid increase in demand is not being adequately met by a resulting ramping up of supply. This is not because producers aren’t willing to create products that consumers are clamoring for – instead, it’s due to a global issue affecting logistics and supply chain deliveries.

A recent article quoted the CEO of a major Pittsburgh-based global producer of paints and chemicals who said, when announcing disappointing first-quarter earnings, that his company had found it frustrating that it cannot meet growing demand because it cannot acquire the raw materials needed to create its own products.

Consumers are ready to spend, and their confidence is growing. At the same time, however, a labor force gap has opened up due to the pandemic and changing attitudes toward work. The end result is a logistics sector facing an unparalleled number of constraints as it works to fill open positions.

The supply chain industry has been hit especially hard because so much of its labor force works inside warehouses and distribution centers. Employee expectations and preferences continue to evolve.

One industry expert conducted a study that showed 68 percent of American workers want to have a job where they can work in a hybrid environment – partly at home and partly at the jobsite. Of that group, 87 percent want to continue working remotely even after the pandemic subsides, and one-third would not agree to work for an employer who required onsite attendance full-time. This obviously creates issues for supply chain logistics.

Employers have begun to adapt to this shifting paradigm, widening their pools of applicants, incorporating more automation to alleviate monotonous and repetitive tasks, adjusting gaps in pay inequity, and devoting more attention to recruitment and retention strategies.

Chalk this issue up to one more way that the global COVID-19 pandemic has changed the ways business does business. Solving the supply chain labor shortage takes on greater relevance and importance because so much of the larger economy depends on it working at the highest capacity and efficiency possible.

 © 2022 OC Reilly, Inc.