As regular readers (or even occasional readers) know, I am biased toward demand. In my experience contemporary high volume, high velocity supply chains reflect and serve demand. Sustained effectual demand shapes supply capacity. Where effectual demand can be communicated, effectual supply will flow — perhaps with difficulty, perhaps with stubborn delays, but push follows pull.
I have argued (here and here and here and here) that the most severe supply chain problems have been rooted in extreme or volatile or weird — and often unsustainable — demand. I perceive that since the second half of 2022, most (but not all) of this extremity, volatility and weirdity has been squeezed out of the system.
I am not alone in considering these factors. I especially appreciate the work of the Federal Reserve Bank of San Francisco on related issues. Please see a summary and recent update here.
Yesterday on Bloomberg Surveillance, Torsten Slok, Apollo’s chief economist, addressed the potentially vital implications of those weirder supply constraints still echoing within certain chords of global demand — especially pricing. It is a bravura performance. I am looking for a transcript that will support a more detailed translation and exegesis. Until then please click on the image below. This takes you to the full show, please advance to about the 1 hour 14 minute 48 second mark. The first half and final tenth of this interview is especially relevant to Supply Chain Resilience.