Thought Leader: Dr. Jonathan Jackson

Dr. Jonathan Jackson, an assistant professor of finance at the Providence College School of Business since 2015, shares his insight on current supply chain disruptions. Dr. Jackson’s area of expertise includes inventory management, supply chain management, and sports analytics.

For those who have not viewed your interview with WPRI, why is the supply chain being disrupted?

The supply chain disruptions we are seeing right now are a result of a perfect storm, with disruptions at nearly every level of the supply chain. Raw material shortages have limited production of key semiconductors, manufacturing facilities across the globe are facing partial or complete shutdowns from coronavirus, cargo container shortages have slowed trans-Pacific transportation, and labor shortages have hampered the trucking industry in the United States. Then, on top of all of that, we are facing unprecedented levels of consumer spending, especially e-commerce spending. This creates the perfect storm causing the disruptions we’ve been seeing across nearly every industry.

Do you anticipate that the Omicron coronavirus variant will exacerbate current supply chain issues?

Unfortunately, increased coronavirus cases could exacerbate the current disruptions. Global supply chains are already stretched to the max. Any further disruptions due to the Omicron variant will only pile onto the current challenges. While vaccination rates have been improving in the United States, there are many countries (especially where key manufacturing occurs) that have relatively low vaccination rates. These areas will be more susceptible to future disruptions because of Omicron.

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In your interview with WPRI, you mentioned that the effects of supply chain disruptions are often delayed before we would be impacted. If there were to be a disruption today, how much time would pass before we felt the impact here in the United States?

Many of the consumer goods we purchase originate from Asian countries and are transported via cargo ships. These cargo ships traveling from China to the United States can take anywhere to 14 to 42 days to complete their journey. If a disruption happens in manufacturing or in loading containers, then we won’t see the impact of that shortage for weeks, if not months. The further up the supply chain the disruption occurs, the longer it will be before we see the impact in the United States.

Do you believe it’s possible that the current state of the supply chain could continue through the 2022 holiday season?

This is the billion-dollar question. Supply chain experts around the world continue to revise their estimates on when we will go back to “normal.” Many experts agree that we may never go back to pre-pandemic “normal,” but they expect things to stabilize anytime between summer 2022 and early 2023. Unfortunately, the 2022 holiday season falls into that window of time. With that being said, consumers helped minimize supply chain disruptions in the 2021 holiday season by buying early, which spread out demand and lessened the peak demand right before Christmas.

Posted by Elizabeth Delaney – Manager of the Benjamin Family Social Media Fellows