My former Gartner colleague Kevin O’Marah wrote a book called “Supply Chain Saves the World.” Whether for medical supplies, food, remote communications, or the basic comforts of home, efficient matching of supply to demand (aka supply chain) may well be the rope that lifts us out of our pandemic-induced death spiral and lands us on the fast track to Economy 2.0. The spirit of innovation and collaboration amongst those silently toiling away to assure the smooth sustainable flow of goods gives me intense optimism about the road ahead. We just need to speed it up.
It’s not a sexy discipline, this supply chain business. Those who lead the function inside companies rarely make the front page of Fast Company or Wall Street Journal, unless of course as with Rent the Runway’s supply chain meltdown this past fall, the boxes simply stop shipping. I used to tell my teams at Nike that the best compliment you can receive is to be noticed for not being noticeable. Supply chain is like oxygen: Only visible when you suck it out of the room.
Today, however, we can feel it. If you’re a front-line medical worker, or simply the janitor on your hospital’s overnight cleanup shift, a shortage of masks makes you the medical equivalent of a passenger chained to the wing of an airplane at 30,000 feet. Exposed. When you DO get that 3D-printed mask from the retooled apparel factory in Brooklyn, you feel quite literally reincarnated. Reborn.
Or, if you’re my 84-year-old dad heading to the local grocery store, and you can’t find hand sanitizer, you wonder whether 14 days from now you’ll still be alive when you came a bit too close to that dude with the cough in Aisle 13. When you do see action, you feel gratitude of the deepest form. In my little town of Hood River, OR (population 6000), Clear Creek Distillery has stopped making the whiskey it’s been producing ever since 1934 and started producing hand sanitizer. A lot of it. 50,000 375-ml bottles of high-quality 80% alcohol-based product in its first two weeks of operation, to be exact. Astounding affirmation of the healing potential of private enterprise.
But here’s the thing. Whether it’s a U-shaped economic recovery that spans three years, or a V-shaped recovery that returns us to the carbon emissions of just 45 days ago, neither is acceptable. It’s not enough. Even today in the U.S., we have food banks turning away hungry families while farmers literally pour millions of gallons of milk down the drain, and bury hundreds of millions of tons of perfect produce. As we shift from industrial to home consumption in the midst of lock-down, the variable cost of re-routing distribution for many goods has become higher than the price of the commodities themselves. In other words, if you’re a dairy farmer, the more you ship, the more you lose.
There are no villains here. It’s a systems problem. We can’t expect any one party to die on behalf of another in service of food or shelter.
And yet. In a developed economy with unrivaled access to technological innovation and unprecedented wealth, not protecting our healthcare workers is tragic. Letting people go hungry, or cooking our planet for that matter, is criminal. Supply chain can save the world, but we need to seize the opportunity for even more aggressive innovation if we are to build the resilience to see us through this crisis. And the next one. This isn’t our first pandemic rodeo. And it won’t be our last.
What might that innovation look like? Consider where supply chain innovation is coming from today, and follow the thread. Amazon’s Jeff Bezos famously told his employees to “API* everything (or be fired)”. In other words, break down components of our centralized systems and distribute them to people “in the field,” and hang systems together with standards around interoperability.
Regardless of whether you’re talking about a company, a country, or an international governing body, I think the answer does lie in opening interfaces and allowing innovation to blossom closer to original sources of supply and demand. De-centralize information flows in order to unleash local solutions to global problems, and centralize only where you must. Let the victory garden in Topeka feed the family on the next block, and when the family has been fed, allow the gardener to pivot and sell onions on the open market.
In The Great Depression of the 1930s, when families were going hungry despite surplus (same forces at play as today), FDR did his best to fix the supply chain problem by buying the excess centrally and redistributing it to those in need. But FDR didn’t have cloud-based software, high speed modeling of alternate distribution flows, or the benefit of hindsight around the unintended consequences of centralized command and control. He did well, but we can do so much better. And we must. People are hungry again, tonight.
I think there’s something to Amazon’s ruthlessly open, fully-emergent systems model that is central to our Republic, if we can keep it. More to come.