Susan Cholette and Kumar Venkat
The pandemic has upended supply chains. No doubt many of you, like us, have had to adjust your purchasing habits. Since we study how companies are now re-tooling their business models, we have considered how some practices could translate into consumer behaviors that might serve us better even in normal times.
Supply and demand shocks are showing the importance of supply-chain resiliency. Companies that depend on global sourcing have been unable to get products or parts as Chinese factories have slowed or shut down production. Anyone visiting Amazon recently may have faced similar supply shocks with estimated delivery dates running into June. On the demand side, producers that specialize in fancy farm-to-table foods for high-end restaurants or high-volume production for cafeterias have struggled as their food service clients have stopped ordering.
Diversified supply chains are typically more resilient to shocks than those that rely on producers in a single geographical region or consumers in niche sectors. Many firms are considering using more suppliers, especially those closer to home. As consumers, we can mimic this by diversifying our own purchases. As much of the food we purchase in supermarkets is produced in other parts of the country or overseas, we should add more local sources. One possibility is to subscribe to a CSA, which will deliver fresh produce from local farmers to your home on a weekly basis. Other options include for-profit social enterprises like Imperfect Foods, which sells misshapen or excess produce and helps reduce food waste in the supply chain.
Consumers can take the practice of local sourcing even further up the supply chain by figuring out what nearby food producers may have available to sell. America imports about two-thirds of its seafood, but if you live near a body of water, you might be able to buy some locally caught fish. For instance, San Franciscans can now visit Fisherman’s Wharf to pick up deliveries from Water2Table, which normally wholesales just to restaurants but because of the large number of restaurant closures now sells directly to consumers.
Buying locally has other advantages. When this pandemic recedes, we will want the producers, restaurants, and stores in our communities to remain in business. If your budget allows, consider treating yourself to takeout from the restaurants that are still open.
Consumers should rethink how to manage their personal stock of food and other supplies. Many businesses have traditionally used just-in-time deliveries from manufacturers and wholesalers to keep their inventory costs low, and consumers have similarly relied on short delivery times or on supermarkets being fully stocked and open round-the-clock for spontaneous shopping. This, of course, does not work during a pandemic as demand spikes and consumers tend to purchase more in fewer shopping trips. But stockpiling months of supplies in our homes is not the solution, from either a moral or a practical standpoint, because it creates shortages for other shoppers and exceeds limited refrigerator and freezer space for perishables.
Many stores are now limiting purchases of scarce items such as toilet paper. As consumers, we can help ourselves and other shoppers by becoming smarter inventory managers and smoothing out these demand spikes. We suggest stocking about 2–3 weeks’ worth of supplies and then using a weekly shopping trip to replace what was used in the previous week. Part of an effective inventory management strategy is meal planning and minimizing the food that goes to waste.
Our final suggestion may sound simplistic, but simplifyingis a powerful tool. Consumers can adopt a business practice championed in high-tech manufacturing known as planned postponement, which purposely delays end differentiation of products until market needs are better known. A practical example of this is buying basics such as dried pasta, canned sauces, and other shelf-stable foods that can be used to make a variety of different meals depending on what you are craving on any given day, rather than buying perishable premade meals. Manufacturers often make use of component commonality across products, and savvy cooks can apply the same idea by substituting readily available ingredients when a recipe calls for exotic or out-of-stock ingredients.
Eventually this crisis will abate and many of the conveniences of pre-pandemic life will once again become available, including being able to order just about any product online for speedy home delivery. But hopefully by then we will also have learned the value, both to our pocketbooks and to our communities, of keeping our personal supply chains resilient by sourcing more locally, managing our inventories, and simplifying what we can.