Risks in Global Freight; Creative Corner; "Outside the Box" by Levinson; Santa's Supply Chain
Fractal Risks in Global Freight Systems
By Kellen Betts in Manifold
Global value chains are now comprised of thousands of businesses and hundreds-of-thousands of cumulative miles in transportation. They bring to market new products like smart phones and coronavirus vaccines that are transformational in their own right. They also have introduced unprecedented, systemic risks.
Where industrial competitiveness was once defined by the boundaries of the state, global trade has redefined those boundaries around production networks disrupting half-a-century of trade policy.
The growth and scale of this change also proved to be a one-way trip to giant ships and structural rigidity.
Digital technologies offer a degree of flexibility, and simultaneously create a new dimension of security exponentially expanding the “surface area” of vulnerability.
Despite this digital transformation, humans are still essential for global trade, leaving some to dangle from perilous heights dismantling giant ships or get stranded at sea.
And in a strange twist of fate, a gaseous byproduct of global transportation is the most transformational force of change, creating the greatest challenge—and opportunity—of our lifetime.
What We're Reading
What do we know about the SolarWinds hack? by Helen Warrell and Hannah Murphy in Financial Times
Pressure Mounts to Speed Crew Changes on Cargo Ships by K Oanh Ha in Bloomberg
How the Nature Conservancy, the world’s biggest environmental group, became a dealer of meaningless carbon offsets by Ben Elgin in Bloomberg Green
After Centuries, a Seemingly Simple Math Problem [the Grazing Goat] Gets an Exact Solution by Steve Nadis in Quanta
(New!) Creative Corner
Inventory (lack of) Management
By Nancy Miller
Sandy is annoyed at being enveloped by the frigid air as he stepped into the warehouse. Dust, floating in daylight rays coming thru skylights, gave true atmosphere to this warehouse, as if you would expect chilled fog in the early morning as a matter of course, a unique bio-climate.
Already frosted because inventory just had to be wrong, he called “Inventory is wrong again Pearl!” Sometimes there is just no being nice about these things. What a waste of time, trying to keep his inventory right, always having to do the foot-work. No doubt Pearl is taking yet another of her famous breaks. Seems like she takes a dozen a day, eats like a bird, one tiny snack after another. So just because, Sandy looks in the break room, and there she is, playing a game on her cell phone and eating a carrot. “Inventory is wrong again, Pearl. Can you check out item 35B689X? We had 75 yesterday, now we have 150.” Sandy hands her a post-it with the part number on it, still not sure if she is paying any attention, so absorbed in her game and with ear-buds on. Pearl, still focused on her phone, says as soon as she is done with her current count she’ll look at the 35B’s.
Break over, back in the warehouse with clipboard in hand, Pearl continued with her count. Now where was she? Looking at her clipboard and the tally in the margin: 131, 72, 19, 6, 6, 48, that’s 292 and there is supposed to be 305. Ah, here’s another 24. That should do it. Imagine, she thinks, I love numbers and that’s what landed me this job! But really how boring, just counting things all day. So, on to the 35B689X’s. This sounds familiar, bet I counted them the other day.
Pearl headed for her desk and pulled out the counts from the last several days. Yep, sure enough, she had counted them yesterday. In the margin, she had written 75, 75, that equals 150. Clearly there were 150. Armed with paperwork, back to Sandy’s desk, “Hey Sandy, I counted this item yesterday, and there were 150, see my notes?” Sandy, looking at the paperwork snorted “That can’t be. These things cost $400 each, there’s no way I’d have sixty-thousand-dollars-worth on hand! Show me!”
Rolling her eyes, Pearl marches like a petulant kid on a school field trip. “There!” Up in the rack, on the third deck, a pallet of 72 “And the other pallet was over by Receiving” but there was no pallet in Receiving. “They must have put it away somewhere – Hey Shelly, do you recall seeing the 35B689X’s? They were here in Receiving yesterday.”
“Sure – they are at the end of that aisle, up on the third deck” Shelly points. “I was glad to see them. Production has been asking for them the last couple of days and we didn’t have any. I gave them the 3 boxes they asked for this morning.”
Sandy’s eyes now icy blue, “Nice going, counted the same thing twice” thinking - is excelling at work done by magically doubling inventory?
“If I see it, I count it, that’s all I do. See it, count it, see it count it, that’s all I do, all day long.”
Wade, his locomotive stride tossing sparks into the air as he speeds over to Pearl and Sandy holding his financials, paper fluttering in the chilled warehouse air and sending off palatable waves of frustration. Furiously, “What are you doing Sandy, buying a 6-month supply of the 35B689X’s? This is crazy! Can you do a vendor return?”
Book of the Week
Globalization has profoundly shaped the world we live in, yet its rise was neither inevitable nor planned. It is also one of the most contentious issues of our time. While it may have made goods less expensive, it has also sent massive flows of money across borders and shaken the global balance of power. Outside the Box offers a fresh and lively history of globalization, showing how it has evolved over two centuries in response to changes in demography, technology, and consumer tastes.
Marc Levinson, the acclaimed author of The Box, tells the story of globalization through the people who eliminated barriers and pursued new ways of doing business. He shows how the nature of globalization changed dramatically in the 1980s with the creation of long-distance value chains. This new type of economic relationship shifted manufacturing to Asia, destroying millions of jobs and devastating industrial centers in North America, Europe, and Japan. Levinson describes how improvements in transportation, communications, and computing made international value chains possible, but how globalization was taken too far because of large government subsidies and the systematic misjudgment of risk by businesses. As companies began to account properly for the risks of globalization, cross-border investment fell sharply and foreign trade lagged long before Donald Trump became president and the coronavirus disrupted business around the world.
In Outside the Box, Levinson explains that globalization is entering a new era in which moving stuff will matter much less than moving services, information, and ideas.
— Summary from the publisher
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Young Professionals Mixer: Santa’s Supply Chain
December 23 @ 5 PM | Virtual | Free | CSCMP Puget Sound
CSCMP Puget Sound is hosting a virtual Young Professionals Mixer with Chris Corman, Vice President of Amazon Sales at Mattel. Mattel is the manufacturer and supplier of popular toys including Barbie and Hot Wheels. Learn how Mattel helps Santa deliver millions of toys during peak holiday season. Bring your boozy eggnog and holiday swag!
By the Numbers
According the Thomas Index sourcing demand for ultra-low temperature freezers and cold storage services has increased an astounding 527% YoY in response to the FDA approval of Pfizer and Moderna coronavirus vaccines. The Pfizer vaccine requires -94°F (which is colder than winter in Antarctica!), while the Moderna vaccine requires -4°F, similar to a regular freezer.
Kellen Betts is Co-Editor of Supply Chain Weekly. He also writes the newsletter Manifold, exploring the intersection of supply chain, sustainability, and technology. Contact him at email@example.com. Follow him on LinkedIn and Twitter.
Miguel Garcia Gonzalez, CPIM is Co-Editor of Supply Chain Weekly. He sources technology at Amazon and leads the Discord Supply Chain server on logistics, procurement, certifications, news, and more. Contact him at firstname.lastname@example.org. Follow him on LinkedIn and @mggSCM.