business news in context, analysis with attitude

•  The Wall Street Journal has a story about the "bullwhip effect," which is what happens when supply chains, cutting back on production because of a recession, are unable to deal with a fast rebound in consumer demand.

Here's how the Journal describes the situation:

"U.S. manufacturers aced the shutdown of their factories and warehouses last spring in response to Covid-19. They’re botching the recovery.

"After carrying out an orderly retreat from assembly lines as the pandemic arrived in the U.S., many manufacturers pulled out the playbook they followed in past recessions, cutting costs and preserving cash. That left them unprepared for the sharp rebound in consumer demand that began just weeks later and never let up."

Post-pandemic, the story says, "the bullwhip effect is even more pronounced because demand for consumer products has been extraordinarily high. At the same time, companies are placing supersize orders to compensate for the extra time it takes to procure supplies from factories and freight operators constrained by global efforts to contain the coronavirus. That’s exacerbating the strain on supply chains. "

You can read the complete story here.

•  The Chicago Tribune reports that "Jewel-Osco warehouse workers and drivers have authorized a strike as contract negotiations continue without agreement on key pay and benefits issues.

"The strike authorization vote Friday gives the bargaining committee the power to call a strike after the contract expires March 6.

"Teamsters Local 710 represents more than 850 Jewel-Osco warehouse workers, drivers, and dispatchers based at the Melrose Park distribution center, which serves more than 185 stores in the region. Nearly 98% of the 578 members who voted were in favor of authorizing a strike.

"The union said Jewel-Osco is demanding concessions from workers in the contract even after a year of hefty profits. Its parent, Boise, Idaho-based Albertsons, the second-largest grocery store chain in the U.S., reported $125 million in profits in the third quarter that ended Dec. 5."