Nowadays, you’ll often hear multiple references to the concept of the “supply chain.” It brings discussion of material shortages, transportation, and the global economy. But what does this all mean? In today’s article, we’ll look at exactly what the supply chain is and what education entities should consider now and in the years ahead.
What is the Supply Chain?
To start, it’s essential to differentiate between what a supply chain is compared to when media or others refer to THE supply chain. A supply chain is the network of everyone involved with producing and delivering a product to the end consumer. This includes gathering raw materials, delivery to and from the production site, the creation of the product, and all other steps that lead to the product arriving to the consumer. It usually begins with a client ordering a product from a business or producer.
For example, if we consider the supply chain for a notebook, we have a store that orders some amount to put on its shelves. The business creating the notebook will work with producers to make paper, glue, and other necessary materials. The company gets those products shipped to its factory, where it can assemble everything to create the notebook. It will then transport the ordered notebooks to the store, where you can purchase them. You can add additional parts to the process, such as resellers, marketing, distribution networks, and more, but a supply chain considers all the elements to create a purchased product that originated from raw materials.
When thinking about the general “supply chain,” we’re referring to how the production and shipment of goods are affected globally. Products aren’t created in a vacuum. Factories can produce multiple products, use raw materials in multiple ways, and transport various types of goods in a single boat or plane. As such, something that affects a small section can cause significant problems throughout the world. An issue with finding raw materials for computer chips slows down computer chip production, which is needed for all sorts of products, causing technology to be harder to purchase. A shipping lane clogged up by an obstacle causes other ships to stop or find a new route, slowing down the shipment of goods. With the global integration of goods and services, small changes to any one part of the chain can cause major disruptions when consumer demand is large.
What’s the current state of the supply chain in education?
Generally, supply chain issues created by the COVID-19 pandemic continue to heal. It’s even helped companies address problems in their process to avoid future supply disruptions. However, new problems crop up daily due to worker shortages, inflation, wars, etc.
One of the major issues affecting education is building projects. The demand for building materials and increasing costs make it difficult for schools to start their facilities projects, even those planned before the pandemic. With an increased demand for new housing and ordered materials arriving more than a year late, it will take time to resolve this issue as producers and builders catch up on production.
Shipping issues have also affected the supply chain for educational entities. With the increase in fuel prices, companies are having more challenging times shipping large-sized items like furniture and TVs and maintaining positive cash flows. Though companies are implementing strategies to lower freight and logistic costs, it’s not been enough to catch up to demand for a stable market price. This makes it harder for organizations like schools to maintain their budgets while trying to make their planned orders and have them arrive when needed.
How can we prepare for the future?
With supply issues being a global scale problem, the best solution to navigate these issues is to wait a few years as the supply chain resettles, unfortunately. In the meantime, adjust your buying habits to make the best of the situation. For instance, see how much you can adapt to your purchasing schedule. Where most schools look to purchase during the summer and winter breaks, see if you can dedicate time to purchase during the other times of the year. If you’re avoiding the peak purchasing season, you can get a better chance at getting what you need.
If you have a project or big purchases you’re planning, reach out to our vendor partners to see what they might recommend. Since they’re experts in their fields, they’ll know the current supply and demand situation to help you make an informed purchase. All our Vendor pages offer contact information, so contact any of them to see if you should plan your purchases and future projects.
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The supply chain is a complex topic on the local and global levels. While some things will remain out of your control, you can do your best to plan future purchases for your school or educational entity. Gather knowledge, look for trends, and find supports to help you get what you need to provide for students and staff with whatever needs they may have. If CESA Purchasing can help you plan in any way, please reach out to us anytime. We are happy to assist with sourcing support, securing quotes, and finding creative solutions to your procurement challenges!