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Small businesses hit hardest due to supply chain disruption

The pandemic may potentially cause companies in the U.S. to want to move more of their business and supply chains back within the country in the future.

COLLEGE STATION, Texas — You might have noticed some empty shelves at the stores since the coronavirus outbreak, and that is because supply chains across the world have been facing disruptions due to the virus.

“Supply chain is generally a network," said Sam Houston State University Supply Chain Management Associate Professor, Dr. Jason Riley. "Everything from iPhone to meat to any product you see in the retail stores has to come from somewhere. It’s a network of people/ companies that move product, information and money from different parts of the world to the consumers." 

All kinds of businesses have supply chains, whether it be a private or public business, or even a nonprofit.

Riley predicts extended supply chains that require manufacturers or distributors across multiple countries will be affected and face changes over the next months and even years.

“For supply chains that are short, they’re made here, only based here in Texas, so the farmers here in Texas the distributors are here in Texas, the producer here, the customers are here, that supply chain should recover pretty quickly," said Riley. "But we got supply chains that are real long, so Apple iPhones for example. They’ve got raw materials from 35 different countries, so those are going to be affected for quite a while." 

It is possible that some vendors and other parts of the chain will go out of business during the pandemic, meaning that the overarching company will need to adjust. And small businesses will be hit the hardest.

“It’s the small ones that have to scour relationships that will take a while, to re-establish themselves," said Riley. "A lot of them will have to go find a new vendor, a new shipping company. It will take some time to find those, establish those relationships and then as you work with them, 'hey right now I have 10 containers, can we go to a hundred'. So scalability quickly becomes an issue the company has to start thinking about." 

Riley also believes this pandemic may potentially cause companies in the United States to want to move more of their business and supply chains back within the country in the future so that these disruptions may be prevented.

After the pandemic is coming to an end, Riley predicts it will take about 4-6 weeks for most companies and chains to recover in the bigger cities across the nation.

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