WSJ: Absenteeism hits hard

This morning’s Wall Street Journal (online) gives first position to US food supply is under pressure, from plants to store shelves.

Omicron related absenteeism is blamed. The reporters explain, “some executives say supply challenges are worse than ever. The lack of workers leaves a broader range of products in short supply, food-industry executives said, with availability sometimes changing daily.”

The story was posted on Sunday afternoon. It is a helpful summary of issues this conversation has been working through since early December.

The data is not — yet — available to confirm, but as previously noted, I expect that last week and this week are likely to give the US its thinnest flows of food. When it is worst depends on where. Each where (node or channel) depends principally on disease penetration, distance from sources, and density of wealth/population (aka demand).

There are also big differences by product category. The next few weeks consumers will be reminded that fresh strawberries (and other produce) in deepest winter is a kind of miracle. Flows of refrigerated vans from Mexico will be reduced and slowed by new vaccination requirements for truckers crossing the border.

From El Paso, Texas to Boise, Idaho many of the same variables are at play. According to one research firm, for the last two months the south central United States has experienced the most grocery stock-outs. Canada seems to be experiencing even more farm to fork disruption.

While US case counts and covid hospitalizations remain very high, over the last two weeks daily rates seem to have stopped rising. If this continues, omicron-related absenteeism should soften. There are plenty of other constraints that can complicate flows. But the system-wide pressures that have been building since early December are gradually diminishing. We should already be scanning our horizon for new threats (and acknowledging our self-created vulnerabilities).

Given the serious risks that omicron presents, I am — again — impressed by the resilience of US grocery supply chains. This is a robust demand and supply network characterized by considerable diversity. It is adaptable — even agile — in a way that reflects these structural elements. The difference is noticeable in places with less diverse, less robust structures.

This adaptability also reflects a competitive, self-actualizing culture. Last week one distribution center general manager told me something like, “You know I’m a competitive cyclist. The Super Bowl is my finish line.  Everything I’ve got is focused on what it will take to deliver that surge.  If I make our marks for Super Bowl, I win.  We all win.  No distractions.  No premature push.  No swerves. No mass sickouts between now and then. I’m going to stay in the groove for Super Bowl Sunday.”

Omicron versus hot wings? Stand-by for the February 13 contest.