Rethinking the Retail Supply Chain - When Inventory Runs Down in Recessions

Major Retailers have been busy selling off existingmight wish to rethink our supply chain all over again,
inventory and drastically discounting it, and they'vebecause now that it is stopped, it's going to take a
been using these revenues to prop up profits in onelot to get it back humming again. Oh, sure, I have
of the most severe recessions in a decade or so.every bit of confidence that this will happen, but
Unfortunately, they have not been ordering newthings like this don't just happen overnight, unless you
inventory for the future and much of the supplyare FEDEX.
chain has collapsed. Trucking, rail, cargo ships, and airFood items and essentials seem to still be running
freight traffic all down drastically to record lows likethrough the distribution system all right even if things
never seen before, well at least in a few decades,there are also scaled down a bit, but that system
things are that bad.isn't broken like the supply chain for everything else
Meanwhile all the manufacturers have stoppedyou see.
producing and it will take them a while to ramp backRetailers, those that survive are going to find
up once the retailers start ordering again, of courseseverely increased costs as things start going again,
that will not happen until the consumers start buyingand these costs will be passed on to the consumer
again, which won't happen until consumer confidenceand appear to be inflation, although it will really be
returns, which isn't likely to happen until creditartificial inflation caused by a wounded distribution
markets free up and people start going back tosystem. So, let's hope the FED understands this and
work; Interesting indeed.does not raise interest rates too quickly to curb the
And it is for all of these reasons that maybe wecoming inflationary years. Think on this.