Journal of Critical Infrastructure Policy
This interplay of the coronavirus with demand and supply networks has amplified several core characteristics of network behavior . Many of these characteristics have long been recognized or hypothesized , but difficult to extract from the “ noise ” of normal network behaviors . Careful data analysis and synthesis are still needed , but given what has been observed since February 2020 , there is now greater cause to be confident of the especially influential role of three factors :
1 . Demand drives and organizes supply
Persisting and accurate demand-signaling reinforces resilience and energizes networks . This was especially obvious in the extraordinary response of the grocery supply chain in the United States ( and elsewhere ). 7 Food producers , shippers , truckers , distributors , and retailers responded creatively , effectively , and quickly to increase flow volume and velocity . At the same time , they were disciplined in minimizing inaccurate expressions of demand and related “ bull-whipping ” 8 of supply chains . This contrasted with confused 9 and chaotic demand 10 signaling in the medical-goods sector ( related to number 3 below ). But every example — good or bad — reinforces that to advance Supply Chain Resilience , it is essential the network receive full-scale demand signals with full fidelity .
2 . Movement may matter most
Where functional and physical channels ( lanes , links , edges ) persist , Supply Chain Resilience is possible . The pandemic has not destroyed nor physically disrupted infrastructure . Non-Pharmaceutical interventions ( NPIs , like retail shutdowns ) have certainly disrupted network functions . Friction has increased across many networks . But flow capacity has not yet been systemically reduced . There have been instances of disease-outbreaks or fears of disease reducing production or transportation capacity . But at least so far , in the United States these capacity-reductions have been short-term and non-material in terms of network-behavior . This persistence of network flow should not be taken for granted . In February and even into March , the Chinese transportation network was much more fragmented by NPIs and other pandemic consequences than has been experienced in the United States or most of Europe . As a result , in the United States essential supplies have mostly remained
8 Inventory fluctuations in increasingly larger waves as one goes up the food supply chain in response to consumer demand . Thus , in the case of grocery , the largest variation occurs among food and other raw producers responding to increased consumer demand .
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