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April 25, 2020

Coronavirus hoarding: Why you can stop amassing toilet paper

Just-in-time supply chains were caught off-guard by the pandemic, but next time they'll be better prepared, writes Giovani J.C. da Silveira, Haskayne School of Business, in Conversation Canada
Toilet paper is in the ‘just-in-time’ supply chain system
Toilet paper is in the ‘just-in-time’ supply chain system

Signs warning of  during the coronavirus pandemic are not an indication of supply chain failure. It is more a mark of an event that no one could have predicted.

Toilet paper is a product that is in the .Ìę, just-in-time supply networks ensure items arrive when they are needed to keep shelves stocked.

Toilet paper is in the ‘just-in-time’ supply chain system.

Toilet paper is in the ‘just-in-time’ supply chain system.

Jasmin Sessler, Unsplash

This is important not just for perishables, which might first come to mind when we think of timely delivery. Packages of toilet paper are big and bulky. No one wants to pay to stockpile warehouse supplies just in case of an event like a global pandemic — not manufacturers, wholesalers, retailers or consumers, to whom the cost would be passed onto.

But when word of COVID-19 spread, consumers became willing to stockpile this item in their homes, both disrupting the supply chain system and creating living spaces crammed with paper products.

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Just-in-time supply chains are what helps to keep costs low through the system. But that means these networks are  than “just-in-case” supply chains.

Some traditional manufacturers use just-in-case production and distribution, keeping raw materials and stock on hand in the event of emergencies or disasters. These networks are more costly, but also , as we have seen recently.

Predicting demand

Now that the supply chain has been disrupted by a surge in demand, everyone along the supply chain will be working .

But the big question is: What will that demand look like in the near future? Will people want to live in a warehouse of toilet paper, continuing to buy in bulk? Or will there only be a need to do a small run and wait for everyone to work through their cache?

Some retailers might be considering whether they want to shift to a just-in-case approach to certain products. They will carefully weigh the , and if they take this approach, they’ll probably pass on the additional cost to the consumer.

Robust supply chains are resilient supply chains

Professionals working in supply chain are constantly evaluating the best ways to fulfill business operations weighing out options, many times with their work being unnoticed until there is a disruption.

Supply chain professionals weigh  against other factors because choices are made along the line.Ìę, with each supplier providing smaller quantities, makes for a more responsive supply but also results in higher unit and ordering costs, as well as greater need for . Another alternative may be to keep suppliers in reserve, providing organizations the agility to respond to changes.

 made by manufacturers to improve operations alongside a colleague, we worked to develop a model that can be more accurate and useful to professionals in industry. Taking into account the performance of the trade-off and its overall importance plays an important factor in planning. It’s a complex dance, with the choices along the way being opaque to the final consumer.

 is where the supply chain can endure external impacts without being affected. The most resilient supply chains will also usually result in a more expensive product.

Supply chain professionals are on the case

But a supply chain cannot be resilient or responsive to change if it is not robust first. It takes time  to establish robust supply chains. It’s the work that professionals are doing every day. This acts as a form of insurance to help smooth things out when unforeseen events occur.

Supply chain professionals are always , thinking of what can happen and building in accommodations into the system. They forecast what to do in certain circumstances.

But they did not foresee that the threat of COVID-19, a respiratory illness, would cause consumers to bulk-buy toilet paper.

Supply chain professionals didn’t foresee the emergence of a respiratory global pandemic would cause consumers to hoard toilet paper.

Supply chain professionals didn’t foresee the emergence of a respiratory global pandemic.

Elly Johnson, Unsplash

When you do find toilet paper on the shelves, don’t forget to recognize the supply chain professionals who have always had it on the shelves just-in-time. They’re now tapping into the robust networks they have developed over the years to ensure that supply continues. So there’s really no need to hoard it.