It has taken economists a while to come to better grips with something experts in supply chain management have known for decades: unavailability of products can shake the global economy and send prices rising. Supply disruptions are a quick way to find out.

Supply chains were a major cause of product unavailability during the pandemic. This was clear even in February 2020 as Fortune reported a Dun & Bradstreet analysis that 163 of the Fortune 1000 had tier 1 suppliers in China's Covid ground zero. And 938 of them had a tier 2 supplier in the same region.

The impact was difficult for most economists to recognize as they typically look at excess demand as the reason for price triggers. But if supply chains bog down, manufacturers can't make products, also producing inadequate product availability. (More lately, corporate profits have stepped up as another reason for inflation, showing that Economics 101 is sometimes too simple to be accurate.)

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.