If you’re feeling nervous about the supply chain, try picturing it naked
There’s a tension at the heart of supply chain management between rigidity—the hard power ideal of getting things done—and flexibility, the soft power which allows for both change and disruption. That tension, in turn, is shaped by the field’s invisibility: Managers prefer to see less of the nuts and bolts, and customers prefer to see none.
The result is a bias towards rigidity. But this is limiting: The kind of supply chain that could withstand a challenge would be one that could bend before change without breaking.
Despite the overwhelming complexity of the logistics corporations routinely manage, such a system is mostly theoretical. Most major companies would face unmanageable losses in the event of a natural disaster or security breach that substantially affects their supply chain—losses that could have been prevented if the underlying systems were capable of planning for change.
That’s over and above the kind of change that managers might want to implement on their own prerogative, as a means of making their businesses more sustainable and competitive. Something as simple as re-sourcing a raw material echoes through the entire supply chain, from new shipping mandates at the source to a new bill of materials at the factory and on down. Yet with supply chain systems as complex as they are, changes are hard to implement painlessly—because a system that heavy is resistant to movement.
What we are left with is a behemoth, high on inertia and easy to topple. A better model—one that is stronger, more supple, and easier to envision—would be a body. As the wild and wooly natural world makes itself harder and harder to ignore, the vision of a self-healing supply chain modeled on a biological system is more than mere fancy: It’s a winning strategy.
When a living tissue is damaged, the system reacts as a whole, marshaling and channeling resources in order to heal the wound. In the wake of a cut to the skin, the heart beats faster to pump more blood where it’s needed. Adrenaline is released to keep the body alert to danger. White blood cells are diverted to guard against infection. More still, the environment around the body is understood and turned to advantage: The oxygen in the air reacts with the iron in red blood cells to prompt coagulation and stop the wound. Skin cells begin to multiply rapidly to repair the tissue.
Biological systems are also attuned to how the environment has changed in the wake of a destructive event. Should a stone fall on the grass, the grass stops trying to grow in the place now covered; it grows around it. Life is ready for change. The supply chain should be too.
There are obstacles. Supply chain management is perched on infrastructure that is extremely complex and notoriously unapproachable. Managers can be reluctant to focus on change if operations are running more or less smoothly for the moment. But this falls prey to two fallacies: one, that a business turning a profit is turning an optimal profit, which does not follow; and two, that the world is static, which it’s not. Adaptability must be woven into the systems themselves, not simply the broader managerial perspective.
And for the first time, achieving this kind of reactive system is possible with emerging technologies. Beginning with a digital twin of physical processes—a real-time computerized model that matches the real world—managers can actually have the power to implement change—and react to it—as it occurs. Machine learning can also be leveraged to predict such change based on past trends and other relevant data, giving managers the opportunity to react to events that have yet to take place.
If, for example, the system foresees a material shortage, it can prompt managers to create a new bill of materials upstream—before the re-sourcing is even accomplished. That way, when the new material does arrive, the concordant process can be immediately implemented—flattening the waves that would otherwise have roughed up the waters. This translates to the kind of savings that would not even have been envisioned if the supply chain had not been transformed in advance of need.
The variations on this theme are nearly endless, but the purpose is always the same: to have the power to change. That’s what this world demands of us—now more than ever. We may think that being hard makes us secure, but true safety comes from knowing how to heal.