By Giovani J.C. da Silveira

Signs warning of one package of toilet paper per customer during the coronavirus pandemic are not an indication of supply chain failure. It is more a mark of an event that no one could have predicted.

Toilet paper is a product that is in the “just-in-time” supply chain. Responsive and integrated, just-in-time supply networks ensure items arrive when they are needed to keep shelves stocked.

This is important not just for perishables, which might first come to mind when we think of timely delivery. Packages of toilet paper are big and bulky. No one wants to pay to stockpile warehouse supplies just in case of an event like a global pandemic — not manufacturers, wholesalers, retailers or consumers, to whom the cost would be passed onto.

But when word of COVID-19 spread, consumers became willing to stockpile this item in their homes, both disrupting the supply chain system and creating living spaces crammed with paper products.

Read more: There’s plenty of toilet paper – so why are people hoarding it?

Just-in-time supply chains are what helps to keep costs low through the system. But that means these networks are more easily disrupted than “just-in-case” supply chains.

Some traditional manufacturers use just-in-case production and distribution, keeping raw materials and stock on hand in the event of emergencies or disasters. These networks are more costly, but also better prepared to respond to surging demand, as we have seen recently.

Predicting demand

Now that the supply chain has been disrupted by a surge in demand, everyone along the supply chain will be working to figure out how to plan properly for the demand.

But the big question is: What will that demand look like in the near future? Will people want to live in a warehouse of toilet paper, continuing to buy in bulk? Or will there only be a need to do a small run and wait for everyone to work through their cache?

Some retailers might be considering whether they want to shift to a just-in-case approach to certain products. They will carefully weigh the costs of holding onto extra inventory, and if they take this approach, they’ll probably pass on the additional cost to the consumer.

Robust supply chains are resilient supply chains

Professionals working in supply chain are constantly evaluating the best ways to fulfil business operations weighing out options, many times with their work being unnoticed until there is a disruption.

Supply chain professionals weigh building a robust supply chain against other factors because choices are made along the line. Multiple sourcing, with each supplier providing smaller quantities, makes for a more responsive supply but also results in higher unit and ordering costs, as well as greater need for co-ordination to guarantee delivery performance. Another alternative may be to keep suppliers in reserve, providing organizations the agility to respond to changes.

Researching the trade-offs made by manufacturers to improve operations alongside a colleague, we worked to develop a model that can be more accurate and useful to professionals in industry. Taking into account the performance of the trade-off and its overall importance plays an important factor in planning. It’s a complex dance, with the choices along the way being opaque to the final consumer.

Resilience is where the supply chain can endure external impacts without being affected. The most resilient supply chains will also usually result in a more expensive product.

Supply chain professionals are on the case

But a supply chain cannot be resilient or responsive to change if it is not robust first. It takes time and trust to establish robust supply chains. It’s the work that professionals are doing every day. This acts as a form of insurance to help smooth things out when unforeseen events occur.

Supply chain professionals are always contingency planning, thinking of what can happen and building in accommodations into the system. They forecast what to do in certain circumstances.

But they did not foresee that the threat of COVID-19, a respiratory illness, would cause consumers to bulk-buy toilet paper.

When you do find toilet paper on the shelves, don’t forget to recognize the supply chain professionals who have always had it on the shelves just-in-time. They’re now tapping into the robust networks they have developed over the years to ensure that supply continues. So there’s really no need to hoard it.

Giovani da Silveira is a Professor in Operations and Supply Chain Management at the Haskayne School of Business, University of Calgary. He has published widely in academic journals. He is currently Associate Editor or Editorial Board member with the Journal of Operations Management, International Journal of Operations and Production Management, and International Journal of Production Economics, among other journals. His is an expert in operations strategy, mass customization, supply chain management, and servitization

By Klaus Meyer, Carsten Lund Pedersen, and Thomas Ritter

Throughout human history, crises have been pivotal in developing our societies. Pandemics have helped advance health-care systems, wars have fuelled technological innovations and the global financial crisis helped advance tech companies like Uber and Airbnb. The present coronavirus pandemic will arguably not be an exception; entrepreneurs can be expected to rise to the challenge.

Businesses play a key role both in helping society get through an economic crisis and in creating innovations that shape society after a crisis. So one key question is: how will the ongoing crisis influence future society?

While it’s hard to predict the future, we can develop an understanding of what is ahead by analyzing current trends.

Businesses show citizenship, resourcefulness

The global pandemic and associated policies restricting people’s movements have caused major disruptions to many businesses. We’ve already observed major shifts in business practices. Working from home is the new norm, while many personal meetings and conferences have been replaced by video meetings and other virtual forms of communication.

Read more: The coronavirus is changing how we work — possibly permanently

Some businesses — especially restaurants, tourism operators and movie theatres — have come to a complete stop. Others, like manufacturers of consumer goods, have seen a sharp drop in demand as consumers are either unable to visit shops or lack the spare cash for nonessential purchases.

The short-term impact is likely different from the long-term impact. Consumers may simply postpone the purchase of a new car or washing machine — but they may not want to buy the same types of services in the future.

Many firms have initially responded to the crisis not only by cutting costs but by engaging in new entrepreneurial activities. Around the world, we see examples of resourceful responses to the crisis: Distilleries in the United States, Canada and Australia started to produce hand sanitizers.

Fashion businesses like Zara, H&M, Hedley & Bennett and Trigema are producing protective gear, gowns and other supplies for hospitals.

Airline crews, including those employed by SAS, are being retrained to help out in hospitals.

The shortage of ventilators in hospital intensive-care units has not only motivated health-care companies such as Philips and Draeger to increase production, but also triggered Canadian automotive suppliers and car brands like Ford to produce the life-saving medical devices.

These examples show two common features.

First, companies are showing citizenship. They realize they have an interest in societal well-being, and that they may need to give up short-term profits for the benefit of society. Second, they are showing resourcefulness. They’re developing creative responses to emerging challenges with scarce resources.

In combination, citizenship and resourcefulness can drive socially aware entrepreneurship.

Building foundations for the future

Actions during the crisis will shape firms in the long run.

First, the crisis creates opportunities for businesses to become more innovative. Facing external pressures, some business leaders are stepping out of their routines and comfort zones to become creative problem-solvers. Along the way, they rediscover their entrepreneurial spirit.

Some will continue to pursue opportunities first identified during the crisis. Perhaps some automotive suppliers will make medical equipment, while service providers integrate new online interfaces with their traditional businesses.

Second, reputations are built — and lost — during times of crisis. Companies demonstrating good citizenship by helping with shortages, or by making major donations, are also probably hoping that consumers will remember their actions when the economy returns to normal. What’s more, treating employees well during a time of hardship enhances a company’s reputation as an employer and helps attract talent as well as building a loyal workforce.

On the other hand, there are also a lot of opportunities to ruin a reputation. Companies that treat their employees or customers badly during a crisis will face major challenges rebuilding when the storm has passed. Similarly, if corporate behemoths like Amazon fail to provide reliable logistics solutions to small businesses right now, then others will develop competing platforms. Those new platforms will not only enable buyers and sellers to meet, but will also integrate service providers to transport products in a timely and reliable manner.

Technology push

Beyond existing firms, some sectors of the economy are likely to grow. New technologies can offer numerous opportunities as the crisis transforms the products or services they can offer. Service businesses in particular are likely to see a lot of innovation in how services are created, packaged and sold.

Recent trends in China offer a glimpse of what is feasible for businesses. For example, online shopping and entertainment received a major boost during the coronavirus shutdown via online platforms like Alibaba, Wechat and their associated ecosystems.

In the health-care sector, health-related smartphone apps are proliferating in China — and possibly soon globally. Artificial intelligence is helping hospital emergency rooms, while virtual reality has moved from an entertainment tool to a valuable resource for technical training and maintenance.

Read more: How China is revolutionising e-commerce with an injection of entertainment

Companies that become competent and move quickly in these areas during the crisis will have a strategic advantage over their competitors in the post-pandemic economy. For example, whoever builds the most reliable and speedy logistics infrastructure for delivering goods to private homes during the lockdown is likely to gain loyal customers.

Consumer pull

Customers — both individual consumers and businesses — are becoming accustomed to new forms of business, such as online ordering for home delivery. Their established habits have been disrupted, changing attitudes and expectations. For example, the surge in video meetings creates comfort with this method of interaction, and users learn how to be effective in meetings without face-to-face interactions.

After the shutdown, many people will expect more integration of online and offline offerings. They will likely also be more at ease with using new technologies, especially video conferencing that can also reduce travel costs and carbon emissions.

Read more: Coronavirus and the economy: We need green stimulus not fossil fuel bailouts

It’s clear the post-pandemic future will be different. What’s happening during the crisis will have a lasting impact on society. Current signs of entrepreneurial initiative and goodwill give us some cause for optimism.

In the words of Stanford economist Paul Romer: “A crisis is a terrible thing to waste.”

Klaus Meyer is a Professor of International Business at Ivey Business School, Western University.

Carsten Lund Pedersen is an Assistant Professor at the Department of Marketing at Copenhagen Business School.

Thomas Ritter is a Professor at Copenhagen Business School.