Opinion: Supply Chains For Dummies

By Droppings Economist Milton Friedman

Shoppers remain perplexed over the empty shelves now common in supermarkets everywhere. Paper products have been especially hard hit, with their aisles looking like they've been ravaged by a stampeding herd of deranged water buffalo. Everyone seems to ask the same question: “Why don't they just make more?”

As a tutorial to my dear readers and ass-wiping aficionados everywhere, allow me to explain how just-in-time supply chains work. Say a grocer usually orders in two cases of toilet paper per restock shipment, three times per week on average. When shoppers react to a perceived crisis or threat and wipe out an entire aisle of products, the store has to place a restock order, which has to be processed, palletized, and shipped from their distribution facility. An emergency restock order for toilet paper to meet demand would be over thirty cases.

The distribution facility will in turn be wiped clean within a week by every store it serves ordering massive quantities of the same products. The distribution facility will then deplete the regional wholesaler for the same reasons. At this point the supply chain is effectively wiped out all the way back to the manufacturer, who will then have to make a decision as to whether or not to increase capacity and production in order to keep the pipeline flowing freely.

If the manufacturer believes that the herd of buffalo will continue to stampede for the foreseeable future – if dumbassery is perceived to be the new normal – then they can justify the effort and expense of adding in a second shift or constructing new facilities. However, if they believe that the herd simply panic bought, mindlessly and without thinking ahead, then there will soon be a greatly reduced demand for their products as one can only wipe their ass so many times. The manufacturer will then not invest in new production and the supply chain will be slow to restock, with empty shelves lasting for quite some time.

I hope this helps selfish panic hoarders everywhere better understand the modern supply chain and the consumer’s role in it, and remind everyone that mullein, which grows in abundance in the area, makes a superb natural toilet paper.