Lately, I’ve been hearing a lot about how governments should regulate supply chains and enforce more transparency as a way of solving supply chain issues. But what if governments are not the best option when it comes to supply chain management and, contrary to their intentions, they inflict even more harm on the already fragile and volatile supply chains?
Great insights on the supply chain origins of the Covid test kit shortages. Wishing you a happy, healthy and more obscure 2022!!
Great post Gad. Very helpful explanation for me. I wish I was the person who planned ahead and bought a few tests during periods of calm but I am not. Happy new year!
Nice post! My favorite part was the discussion of how rationing can cause people to inflate their demand. But I do have a minor complaint. When converting desired service levels to safety stock, you use standard normal tables. In this context, I don't know how I would estimate expected demand, let alone it's standard deviation. In addition, what suggests that demand (which is driven by factors such as timing of new variants, holiday travel, and social restrictions) is normally distributed? I'm scarred from years of MBAs assuming that everything is normally distributed, and think that stocking to achieve a specified service level would actually be quite difficult!
Really interesting explanation! I like the use of Google Trends — a constantly fascinating pulse checker on anything at any time.