A journalist has asked several to write — in 300 words or less — what the pandemic has taught us about supply chains. Here is how I responded:
What did the pandemic teach you about supply chains?
The pandemic has (so far) mostly emphasized essential characteristics that tend to be taken for granted in less challenging contexts.
The pandemic taught me that organizing around demand is fundamental. Where and when manufacturers, carriers, customers, and even competitors collaborate to calibrate around demand, flows can adjust to new needs much more quickly. Where demand is neglected or miscalculated or just not known, supply misses the mark more and more, troubles accumulate, velocity is reduced, so volumes are not maximized to fulfill demand.
The pandemic taught me that where the scope and scale of demand can be confirmed (and effectual demand continued over time), extraordinary creativity is possible in terms of streamlining and maximizing existing production capacity (much more than I expected). But I also was reminded that production capacity is constrained by access to capital, stubborn issues of time, and — especially –perceptions of sustained future demand.
The pandemic taught me that robust, diverse, agile freight systems can multiply and divide every other supply chain capacity. When freight assets — surface or maritime or air in whatever mode — are most flexible, then the whole supply chain is more resilient. Persistent freight problems will undo every other advantage and double any other disadvantage. When and where freight channels are flowing, problems with production or demand or whatever can usually be mitigated.
The pandemic taught me that humans — even smart, self-aware, and alert humans — tend to discount the likelihood of any major shift in prior experience, even when the evidence is obvious and racing toward us. Probably related: the pandemic taught me that smart, self-aware, and alert humans tend to focus on well-defined problems or opportunities and tend to discount ill-defined issues, no matter how potentially consequential. (Yikes!)