An Ounce of Prevention in the Supply Chain

April 02, 2020

Author: Guy Soreq

The immune system exists within a delicate balance with itself. Too little function and the body becomes prone to attack from the outside, at risk of an otherwise minor pathogen becoming a life-threatening infection. Too much immune function, and the system fails to differentiate between a foreign invader and its own cells, attacking itself from the inside.

It seems that in recent weeks, many of us have become amateur immunologists, virologists and epidemiologists - chasing answers where none yet exist. In this void, misinformation has crept in. Unfounded rumors began to circulate across the internet that Vitamin C could prevent or treat Coronavirus infection. In the United States, Vitamin C sales increased by 146% as people began stocking up. Meanwhile, in China, sales increased by over 400% as shelves were cleared.

In the animal nutrition market, where Vitamin C is a critical ingredient in feed, buyers questioned whether their suppliers could continue to supply in the face of increasing demand. These buyers, fearful of impending shortages, reacted by purchasing additional stock. Cascading disruptions in the market shot the price of Vitamin C further upward. Since the start of February, the price of Vitamin C has more than doubled and stock is hard to come by.

It isn’t just people who are sick in the midst of this global pandemic - but supply chains as well. Impulse buying and short-term selling further aggravate the system. Immune boosters won’t help. In order to heal the supply chain, it needs to rebalance. In order to rebalance the supply chain, both buyers and suppliers need to place the opportunity for stable supply above the fear of being left holding the (empty) bag.

Suppliers do this by recognizing that it is in their long-term interest to strengthen relationships with customers by working to ensure future supply, and consequently, discourage panic buying. Buyers do this by nurturing supplier relationships that protect their ability to purchase future stock. This delicate balance requires continuous relationship maintenance.

A healthy supply chain stems from healthy relationships up and down the chain. So reach out and check in on your contacts in the industry. In times like these, I guarantee that they have a story to tell.