Supply Chain Resilience

On September 23 I posted on a prospective dock strike. Four weeks later I resume blogging following a brief dock strike, two major hurricanes (Helene and Milton), another grim permutation of the Gaza crisis, and plenty of evidence of persistently strong flows — almost everywhere except where most needed.

It is a month-long story of bottlenecks becoming chokepoints.

Post-Helene In the Western Carolinas and Eastern Tennessee chokepoints emerged for water, food, fuel, and more. Food and fuel were unchoked within a couple of days. Water has been much more difficult. In Central Florida the fuel network was seriously threatened by both Helene and Milton. It was hit but did not shatter. Some day we will not be so lucky.

For purposes of Supply Chain Resilience, flow is the motion of specific volumes of selected material intended to fulfill expressed demand (usually effectual demand ) at specific places and times. A flow network emerges from myriad independent agents working to move different materials at different volumes and different velocities while sharing adjacent space, some principal modalities, and many closely connected sources of demand.

So, for example, trucks are used to move various different materials. Regardless of material being moved or the final delivery destination, a high proportion of trucks will often use the same high-capacity roadways, bridges, and truck-stops. Both human-built and natural networks tend toward these capacity concentrations, clusters, nodes with channels, or modules. In many cases the most influential modules co-locate to produce a network with hourglass characteristics.

Here’s how Constantine Dovrolis, a network scientist at Georgia Tech, and his co-authors explain the modularization of hourglass structures:

…many complex systems, both in technology and nature, exhibit modularity: independent modules, each of them providing a certain function, are combined together to perform more complex functions. Additionally, modular systems are also organized in a hierarchical way: smaller modules are used within larger modules recursively. Examples of such systems exist in a wide range of environments: in natural systems, it is believed that hierarchical modularity enhances evolvability (the ability of the system to adapt to new environments with minimal changes) and robustness (the ability to maintain the current status in the presence of internal or external variations). In the technological world, hierarchically modular designs are preferred in terms of design and development cost, easier maintenance and agility (e.g. less effort in producing future versions of a software), and better abstraction of the system design.  

Big flows almost always depend on manifold discreet interactions. A driver needs to get to the fuel tanker truck. The fuel tanker itself needs fuel to go. The truck needs most of its tires to stay inflated. The truck needs roads to be accessible between where it was parked and the fuel rack.  Grid or emergency power is needed to pump the fuel to the rack and into the tanker truck.  The financial transaction system needs to still work or be quickly replaced. Roads to the retail location need to be open. Et cetera, etc.  Each of these independent functions are often modularized to perform more complex functions.

To reduce costs and speed fulfillment, demand bottlenecks are fused to supply bottlenecks becoming an hourglass. Smooth, continual, sustainable, timely flows are the result. But the neck of the hourglass can be especially vulnerable. If the neck is clogged or broken, flow is stopped.

Over the last month, in Asheville, North Carolina, Greeneville Tennessee, Gaza, and several maritime ports, necks were broken. Some healed fast. Some are still being mended.

One example: The Central Florida Pipeline. More than 40 percent of all refined fuels consumed in Florida usually flow through Tampa Bay ports. This Tampa-sourced pipeline supplies an even larger proportion of fuel consumption in the Orlando metro-area. On September 29 Hurricane Helene’s storm surge disrupted pipeline operations for at least three days (here and here). Then on October 8 the pipeline was preemptively shutdown for the approach of Hurricane Milton (more). The gasoline pipe was reopened on Friday night, October 10. The diesel and jet-fuel pipe did not reopen for another two or three days, more precisely when or how is not yet clear to me. I have not yet confirmed the cause for this delay.

Port Tampa Bay, its terminal racks, and loading bays are the fuel hub for Gulf Coast Florida. The Central Florida Pipeline from Port Tampa Bay to Taft Terminal near Orlando International Airport is crucial to fuel accessibility across Central Florida. Continuity of flows from these channels and racks is especially important to support emergency power generation when the grid is gone including for ongoing water pumping and food distribution.

A time-extended – weeks long – loss of the concentrated fuel capacity at Tampa is a complex network adaptation challenge.  If Port Canaveral is (as with Milton) simultaneously targeted/constrained, it becomes almost impossible to meaningfully mitigate lost network capacity. A wide area event impacting the heart of the Interstate-4 corridor (that Milton paralleled slightly to the south) and featuring an extended grid outage, would result in most retail grocery stores being unable to continue operations on emergency power within 48 to 72 hours.  Given other high priority demands on limited fuels, it is even possible that grocery distribution centers would be unable to continue operations.

On October 9 at 0500 eastern the National Hurricane Center reported, “Milton has been maintaining its strength as a catastrophic category 5 hurricane… Damaging winds, life-threatening storm surge, and heavy rainfall will extend well outside the forecast cone… Milton has the potential to be one of the most destructive hurricanes on record for west-central Florida.”  Less than 15 hours before landfall many models included strong probabilities for a route that would have seriously disrupted and perhaps caused a hard stop of fuel and food supply chains serving much of Central Gulf Coast Florida and extending east to Metro-Orlando (more).

On October 10 Mansfield Energy, a national energy distributor, based in the Southeast United States, reported on Milton to its clients, “A last-minute turn southward by the storm helped avert a worst-case scenario for fuel infrastructure of a direct strike on Tampa, with the storm making landfall roughly 40 miles south of the city. Given the storm’s counterclockwise rotation, the worst storm surge came to the south, away from Tampa Bay.”

These sorts of high-capacity, high proportion bottlenecks are core characteristics of contemporary high volume, high velocity supply chains. Other examples are water treatment plants, grocery distribution centers, and major freight routes. When and where these bottlenecks survive, supply chains have lots of options. When and where these hourglass necks are broken, options shrivel.

My reductionist formula for Supply Chain Resilience: Vital bottlenecks are vulnerable to becoming deadly chokepoints. So, find the high proportion capacity concentrations and their essential functions.  Identify the related interdependencies.  Identify Sentinels to help understand and intervene where and when needed.  Watch, listen, think, act. Repeat as necessary.

NOAA Worst Case Projections for Storm Surge at Tampa Bay

Path of Hurricane Milton

Developed by Bloomberg