Amazonia has not recovered from two years of drought. The Sahara desert is expanding (here and here). Despite recent rain, parts of Pakistan are stubbornly dry. One third of the United States is currently experiencing drought. Over the last twelve months flooding in southern Brazil, Spain, Bangladesh, and the Western Carolinas was especially intense.
Even with these challenges, food has been abundant — for those with the ability to pay. Same for fuel. The people of Gaza and Sudan do not have the ability to pay. Grids are stressed — especially in Ukraine, Cuba, and Nigeria (Gaza’s grid is gone) — but recovery has usually been comparatively quick elsewhere (more and more and more).
According to SwissRe, “With 1.54°C above the pre-industrial average, 2024 is set to become the hottest year on record. A warming climate favours the occurrence of many of the natural catastrophes observed in 2024. Europe, in particular, has experienced intense flooding in 2024, resulting in the second-highest insured losses from floods in the region ever, according to Swiss Re Institute’s estimates. The US has been affected by two major hurricanes and a high frequency of severe thunderstorms, making up at least two thirds of 2024’s global insured losses of more than USD 135 billion as of today’s estimates.” (More and more.)
Uninsured global losses are estimated (even more roughly) at more than $470 billion.
Despite constriction of the Suez Canal, global trade flows have mostly persisted and allowed supply to find demand — where needed and value can be favorably exchanged (here and here and here). Panama Canal transits have mostly recovered from drought-related delays and congestion (more). Labor action — and possible action — by dock workers and drivers have from time to time, place to place diverted and slowed flows but goods have mostly been moved from place to place in a timely way.
Where and when disruption and destruction avoids highly concentrated capacity, supply and demand chains have demonstrated impressive resilience. When — more rarely — there is a hard hit on highly concentrated capacity — as here and here and here and here — the consequences have been more troublesome. Still, during 2024 in most places and cases, supply chains have been robust and adaptable.
No thanks to me.
In late 2023 and the first several months of 2024 personal efforts to support Supply Chain Resilience in Gaza were almost total failures. Other than a couple of short-term new delivery routes/locations, most mitigation measures unraveled well before implementation and other efforts imploded soon after implementation (here and here and here).
During the first half of 2024 I completed writing a new book on Supply Chain Resilience entitled Vital Flows: Supply Chain Resilience in Treacherous Times. After circulating the manuscript for pre-publication reviews I decided it should not be published. Reactions suggested that much of what is most meaningful to me is not meaningful to others… at least not yet.
Late spring and early summer I completed a field study of Supply Chain Resilience in a region at risk of catastrophic seismic activity. I identified key strategic vulnerabilities and proposed preparedness/response priorities. This assessment was not persuasive — not even provocative — to those receiving my report. Once again my angles did not intersect with what others find meaningful.
Three strikes, you’re out. I have been up to bat a few more times during the second half of 2024 with a couple of base hits, a double, and a stolen base. But lots of errors too. Fortunately other colleagues had a much better year.
Beyond personal accountability, calling out these failures is meant to acknowledge the challenges facing Supply Chain Resilience. My angles tend to bend toward improved cross-network collaboration. When collaboration is rejected or reluctant or badly implemented, my mitigation/improvement angles dissolve into irrelevance. A recent survey by Ernest and Young found, “there is a notable gap in perception around the need for the supply chain to collaborate across functions and with external partners and customers, as well as the benefits greater collaboration brings to the organization. About two-in-five (39%) supply chain executives admit that one of the top challenges their organization currently faces as it relates to supply chain metrics is proving the value of cross-functional collaboration.” One of their principal impediments is the lack of priority collaboration is given by non-supply chain executives.
On page 199 of my not-to-be-published book, I argue:
I hope most readers – even if you still disagree – will at least play with the notion that high volume, high velocity demand and supply networks are complex adaptive systems. These contemporary supply chains have been created over the last half-century due to necessity and the pursuit of comparative advantage. In case of catastrophe, supply chain continuity or restoration (or sometimes redirection) is now required if the fundamental needs of large populations are to be fulfilled.
There are numerous opportunities to advance Supply Chain Resilience. The preferences and problems I have experienced suggest there are seven core characteristics of contemporary supply chains that enable seven key principles of Supply Chain Resilience strategy, operations, and tactics. When supply chains are challenged and cascading toward catastrophe, constant and careful attention to these core characteristics will empower calibrated, creative, coherent problem-solving.
The events of the last year confirm the complex adaptive characteristics of high volume, high velocity supply chains — for both good and bad. Recent events offer persuasive evidence that when public sector resources are focused on maximizing private sector flows even the worst destruction can be meaningfully mitigated. There is also evidence that public sector actions often have the most destructive impacts on supply chains (cf. Gaza, Sudan, Ukraine, and more). With this evidence as context, the unpublished manuscript continues:
… an effective strategy of private-private and private-public operational relationships will almost always deliver significant comparative advantage in worst cases.
In just about every geography, market-leading competitors for food, fuel, pharmaceuticals, and most other freight flows depend on the same infrastructure: power grid, road networks, fuel pipelines, fuel racks, truck stops, telecommunications, financial services, etc. Most receive flow from the same set of upstream sources, traveling very similar mid-stream routes. Serious external problems for one commercial operator are usually experienced to lesser or greater degrees by all major operators that share geographic proximity. Solving or mitigating these external sources of friction for one operator will often facilitate flows across the entire network. In a serious and sustained crisis, the failure of any market leading provider – upstream, midstream, or downstream – will seriously stress all surviving providers.
Continued commercial flows are fundamental to achieving public sector purposes in a catastrophe. The more quickly and fully flows restart and reconnect with demand, the better for every survivor. The more private sector capacity persists and can be pushed, the more public sector capacity can focus on serving those left outside private sector flows.
This reality was confirmed by a wide range of 2024 events. There is good cause to anticipate this reality will persist in the year(s) ahead.