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10 10 24 DU Prof Jack Buffington on impact of strikes and hurricanes on supply chain
Supply chain concerns seeping back into the conversation as hurricanes battering the nation's southeast and the not fully settled Dockworkers strike is still hanging over the economy join us now an expert in supply chain University of Denver professor It's Jeff buffington on the KOA comment spirit health hotline professor buffington Thanks for coming on Colorado's morning news as we look at these convergent issues regarding the supply chain Which one do you prioritize as the one that is most troublesome and worrisome? Good morning. Well, actually, I think it's unprecedented over 10 days that you would have two hurricanes and Three-day port strike. So the way supply chains work. It's really compounding and So I think I think that's my biggest concern more than just one of them by themselves Let's start with the port workers strike because that was a situation though only short-lived still has a lot of ripple effects of what we're seeing What implications what products what things are we seeing as we're trying to plate ketchup and getting all these items back on shore? Well, the good news is I think most things that people buy won't be affected But I think the bigger concern probably is you know building the the inventories for the upcoming holiday season It's probably the bigger concerns that I have so it's nothing really short term But like longer-term implications on you know buying seasons. I think it is probably the biggest concern Professor when you see the issues with the ports in the supply chain is is is there a way of of saying that? It's another example of where if we buy more domestically, and I know supply chains just aren't ports But if we buy more domestically, we're not as much of risk with some of these issues with things coming in from overseas and coming into our ports and docks Well, that that's certainly the case in some items, but if you look at what just recently happened with the hurricanes The hurricane Haleen really severely impacted our IV solutions the hospitals and clinics need 60% of all IV solutions are made one factory that was impacted North Carolina that just came up So, you know, it's interesting that you say that because the supply chains are so interconnected that It's really difficult to just pin down which is the bigger impact whether it's domestic or international You talk about that one factory when it comes to IV solutions was that due to storm damage at the specific facility or closed roads or a Contributing factor from Haleen Yeah, we're really very fortunate that there was no structural damage to the facility or damage to the aquifers Which is used to make the IV solution. So actually there's you know Hospital I mean hospitals right now are probably at a 40 or 50% Allocation, but if there were structural damage to the facility could have been even greater So we are actually quite fortunate that in that situation But we have to think about like that level of concentration of IV solutions in just one facility The folks that work in these supply chains, I'm assuming they always have contingency plans for disasters and potential strikes Do you think they are fully implemented? Are they prepared in in events like this or do they need to be better prepared for events like this? We'll see there's the dilemma because there are contingency plans but contingency plans tied to inventory and inventory ties to cost So when you carry more inventory, there's higher cost and now is our supply issue, but there's also an inflation issue So you can see how this is such a difficult issue We see a triple whammy here with the port strike hurricane Haleen and now hurricane Milton What are some of the biggest supply chain concerns when it comes to the most current hurricane that we saw? Yeah, so that part of Florida is very important to the citrus crop. So you probably will see some impact to citrus products Yeah, there's a little bit of an impact to oil and gas but not much and actually, you know from what I'm seeing so far It's not going what it's it may not have been a big of a problem as some have talked about in the last couple days I want to broaden this out while we have you I know during covid the supply chain was something we talked about almost on a daily basis because of the shutdowns Have we fully recovered from from that issue with the supply chain where we playing catch up? And if not what needs to happen to get us back on track Yeah, I think we're undergoing a transition right now when it comes to supply chain how we look at things because Supply chains are very efficient when you carry as less inventory as possible But as as we've been facing for the last couple years there's an inflation issue, which I think you have to Tide to some of the disturbances in supply chain because as there's disturbances you carry more inventory So I think we're going through this correction phase over the next couple years of you know exactly What is strategic to carry more inventory and what is something that we're just going to have to look at things? Differently than we have over the past decades professor real quick and wrapping up with you We talk about all these issues. Is there anything that customers can do? Obviously panic buying is not the right answer, but is there any recommendations when it comes to dealing with any supply chain concerns? Yeah, I think I think the main concern is is number one. I think when it comes to the holiday season is You know be patient because I think what will happen is the longer you wait the more the better likely that you'll have more options and then you know when it comes to daily buying when it comes to You know the things that you buy to supermarket and things like that You know a lot of times people they just add a routine go to the same place where I think You know shoppers are just going to have to go online and do more research before they buy things And you know buy things more timely at you know as opposed to just buying things You know Emotionally, you know so being more of a rational buyer. I think it could be important University of denver supply chain management professor jack buffington. 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