Phillip S. Coles, professor in Lehigh's Decision and Technology Analytics department, explains why, he says, hoarding isn't the answer in the opinion piece "Hoarding Is a Bad Idea During Times of Supply-Chain Uncertainty."
"Hoarding is a natural human response during times of uncertainty," explains Coles. "Hoarding rarely turns out well, however."
Shortages are rarely caused by a lack of inventory, says Coles. Instead, they’re usually from having the wrong inventory because of inflexible supply chains.
"High inventories from large lot sizes and pipeline inventory force us to forecast demand further into the future, where our crystal ball gets murkier," writes Coles. "We end up producing the wrong stuff."
Coles says the pandemic has reinforced the following lessons:
- Examine supply chains for weak links.
- Improve processes susceptible to disruption.
- Shorten supply chains and create flexible response strategies such as identifying alternative suppliers, transportation methods and materials.
"Maintaining excessive inventory is expensive, isn’t good for companies or the economy, and isn’t the lesson to be learned."
Read the full opinion piece on The Wall Street Journal's website.