Mammoth Memory

Scarce Resources – When the available raw materials are not sufficient to meet needs

(Pronounced skairs ruh-zor-suhz)

To remember what scarce resources means, use the following mnemonic:

It scares business owners when resources (scarce resources) and raw materials are not available to meet demand.

It scares business owners when resources (scarce resources) and raw materials are not available to meet demand.


Scarce resources can result for numerous reasons, for example, if record-low rainfall is experienced, water supplies for use in manufacturing may be limited. A sudden increase in demand can also lead to resource scarcity, along with seasonal availability or labour shortages in the production of the required resource. Lack of necessary resources can put a serious strain on businesses, either by delaying their work, making it impossible to complete tasks or forcing the purchase of resources for far higher prices than usual.

An example of a business being affected by scarce resources is when 820 of KFC’s 900 UK and Ireland locations were forced to close due to running out of chicken. Logistics company DHL had been contracted by KFC to handle the transportation of their food from warehouses to stores, but in 2018, due to poor management from DHL and the sudden closure of roads close to the distribution centre, they were not able to deliver to the vast majority of locations. This led to hundreds of locations being closed for days and a considerable amount of embarrassing press coverage.

Another example of resource scarcity that has affected multiple industries is the global shortage of computer chips. The covid-19 pandemic, the China-US trade war and a multitude of other factors all contributed to the conditions that led to the supply of computer chips no longer meeting demand. Automobile manufacturers, electronics companies and medical device companies could no longer meet demands for their products. This shortage began in 2020 but is still ongoing as of 2023.

One final example of an industry being affected by a shortage of resources (in this case labour), is the UK transport/logistics industry. Exacerbated by the departure of over 13,000 EU national heavy goods vehicle drivers in the year 2021/2022, the overall lorry driver shortfall rose to 100,000. A lack of drivers is potentially disastrous for a nation’s population and businesses, as logistics is one of the key elements that keep businesses operating. The implementation of special measures to increase the number of HGV drivers has been put in place, such as promoting training schemes to recruit new drivers and bringing retired or ex-lorry drivers back into the profession. As of 2023, the industry is still lacking 60,000 drivers, but the number is falling.


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