The Triumph of the Supply Chain

Nowadays the supply chain seems to be under constant attack. The word never appears without a negative term attached. Every last newspaper and media headlines moan over endless supply chain ‘crises,’ supply chain ‘issues,’ supply chain ‘disasters.’ Where supply chains are concerned, nothing good ever seems to happen, and all those involved with them fail on all fronts. One would think that supply chains and the specialists and industry that manage them are some sort of curse—a blight upon the land.

Nothing could be further from the truth.

The state of the supply chain has never been better. Its evolution, its techniques, its scope, its capacities, its importance and its practitioners have never been stronger. Its potential as a career path has never been more promising. Its possibilities for the future borders on the Utopian. Far from being at the heart of many of the world’s current problems, it is the solution.

We hear so much about the supply chain that is dark and ominous. Here I want to explore what is bright and positive—to defend the supply chain industry and its people, to demonstrate its vigor and optimism. Indeed, there is so much good to be said about the current state and future prospects of the supply chain that the customary brevity of one short single blog post can’t contain even the major points. So I’ve chosen to break up my comments on the subject into four linked posts. This first post will cover the importance and underlying soundness of the supply chain. Next, the growing public and professional awareness of that importance. After that, the high and rising quality of its active personnel. And finally, I will give just a small indication of the huge positive impact of new technologies on supply chains and their future and ours.

The importance of the supply chain needs no long demonstration. We experience that importance every day. These days it’s often made clear to us in some irritating fashion—some item is missing from store shelves; we find that prices are higher or materials rationed because supplies are fewer. We complain, but rarely do we feel a corresponding happiness over the thousands of other items that are on the shelves, or the many necessities and luxuries that surround us despite unprecedented global disruptions.

Only on sober reflection do we begin to realize that—thanks to how well existing supply chains continue to function—more people are being fed, clothed, housed, given medical care than at any point in human history.

Everything that surrounds us, everything around us that functions, is a result of literally thousands upon thousands of effectively operating local and international supply chains. Yes, there are possibilities on the horizon that should give us concern. But those possibilities should not blind us to the realities of what has been achieved—or to the fact that those achievements rest squarely on effective sourcing, manufacturing, and distribution; in short, on the supply chain.

Skeptics may dissent. “If things are so good, why are they so bad?” Let’s be honest. It’s not because of any intrinsic weaknesses in supply chain as such, or of business operations, but partly because of the interference of historical accident and mostly because poor political leadership. It is not the fault of the supply chain if a global pandemic sweeps across the world, but it is the fault of political leaders if they respond by locking down entire nations. Shipping can’t proceed if governments order the ports shut down. Farmers can’t deliver food to restaurants if every last restaurant in a region is ordered closed. Gas can’t be pumped into cars if political sanctions block its purchase and delivery.

Particular supply chains have undergone staggering disruptions in the past few years. But we should place the blame where it lies: on political inference, not on any inefficiencies in the supply chains themselves. Those are fundamentally sound; and for all the constant talk of oil, heat, electricity and food crises, simple non-interference by government would allow global supply chains to recover at lightning speed. We can move forward immediately. All that’s needed is to take the foot off the brake.

Indeed, the accelerating efficiencies of modern supply chains are what has allowed us to live relatively normal lives at all. It is precisely our enhanced capacity to source, process, produce, trace, deliver, quantify, analyze and market products that has allowed the global economy to cope with so many disruptions with the great success than it has.

The truth is, businesses dependent on supply chains and the supply chain industry have never been better positioned to access as vast an array of sources, options, people, processes, ideas and tools as they are today. Compare the situation of the supply chain in 2022 with that of 1922. Where were computers a century ago? Where was the internet, GPS, or instantaneous global email communications? Where was plane flight, AI, 3-D Printing, Zoom conferencing? Even politically, the situation is now improved: those years saw the birth and growth of virulent and destructive totalitarian movements now waning or vanished or out of favor. By virtually every measure we have radically advanced tools to supply a world that is, comparatively speaking, ever more cooperative and interdependent—a development caused in no small part by the improved supply chains linking us together.

I don’t want to appear blind to the very real challenges the supply chain professionals face. As a supply chain consultant based in Europe, I know these current challenges very well. They are appalling. As I write, Germany, the economic lynchpin of the EU, may be facing its worse winter since World War Two. Russian oil imports may stop completely. Even now affordable prices for home heating fuel in Germany (and France [1]) have exploded by 1,000%. Yet Germany continues working to phase out nuclear and coal despite the virtual certainty of extensive grid blackouts, a transition that a German federal audit earlier this year said “will endanger Germany as a business location.” (2) The damage to businesses may be such that they will simply cease to operate. In the United Kingdom alone, thirty-one entire companies—energy suppliers! —have already shut down “due to soaring wholesale gas prices.”(3) Commodities analyst?Christian Kopfer has warned that a Russian shut-off of gas to Europe could collapse electrical grids across Europe as well. (4) And if power fails across the board, how will that affect hospitals? Jobs? Nuclear reactors?

German?Chancellor Olaf Scholz?has made it clear that no state in the world will be able to absorb the looming Tsunami of costs. Changes in the global supply chains may drive horrific starvation in Third World nation and even lead to hunger in Europe itself. All these changes may result not merely in riots in the streets, but in major, unknown, historic national realignments.

But for all their daunting impact of these possible developments, they are not the effects of the supply chain itself. They are the result of political and social interference, of external distortions to the supply chain as economic matters are harnessed into becoming weapons of war.?

Yet the current problems of supply chains have nothing do with the supply chain itself. Political interference, lockdowns, trade sanctions, quarantined ports, military bombings—there is a vast range of extrinsic inference going on, but that says nothing about the intrinsic capabilities and uses of supply chain operations and analysis. As a profession and a methodology, current developments have been nothing beneficial. One can lock down an economy or sanction all trade to a nation and destroy the actual supply chains operating within both. But one needs to look beyond the poor decisions of the present moment. They say nothing about our ability to build supply chains, chains better and stronger and more resilient than ever before.

In my novel Devil In The Chain I sought to describe one example of a full supply chain in operation from start to finish. In the sequel, Chaotic Butterfly, I expanded the scope, trying to show how external forces from politics to finance, from intelligence operations to crime, from irrationality to blind accident, impacted and distorted the operations of that supply chain.

What I did not do was dwell much upon those aspects that support and are currently and continuously uplifting supply chains to greater and greater logic, profitability and efficiency. Just as the developments of the past century elevated the capacity of the supply chain to feed and supply and connect an every-growing and ever-developing new world, so our current challenges contain the seeds of future supply chain developments that will radically improve not only business efficiency and profitability, but society itself.

Yes, we must act to resolve the challenges of the moment, but we also need to cast off the dark mindset of pessimism, and see the state of the supply chain for what it is: not only fundamentally sound, but exploding in new strengths and new possibilities.

But does the public and the business world fully see and appreciate that? That will be the subject of my next post.