Pipework Warehouse Inc: Managing Disruptions in Supply and Demand

Abstract

This case explains the challenges faced by Pipework Warehouse Inc (PWI) when the global supply chains had to endure several major disruptions caused by the global pandemic in 2020/2021. The sudden shifts in the supply and demand patterns forced PWI to make drastic changes to its business operations. Early in the pandemic, with unprecedented quick drops in demand, PWI had to shrink in size to remain financially stable. However, as the demand volume unexpectedly jumped back to its pre-pandemic levels within months, PWI found it hard to grow at the same pace due to shortages in the labour market. During the summer of 2021, PWI was dealing with new challenges. The bullwhip effect triggered by the sudden shifts in consumer preferences at the onset of the pandemic started to impact the supply and demand balance, causing price inflation and material shortages. PWI, in pre-pandemic times, received once-a-year price updates from suppliers; but now the updates were applied quarterly, amounting to 50% annual hikes for some items. Material shortages meant much longer lead times from vendors. PWI needed to develop a strategy identifying how the company would deal with the frequent price hikes and manage their sales channels and inventory at a time of limited supplies while trying to avoid considerable damage to the customer service levels.

How to cite

Related cases