Responding to a crisis?

Following the constant stream of news, you could be forgiven for thinking that we are living at the worst of times? But take the time to read books by Rutger Bregam (Human Kind, Utopia for Realists) Hans Rosling & family (Factfulness) and Yuval Noah Harari (Sapiens, Homo Deus) and you will see that taken in the long view we are actually living in the best of times. They all point out, however, that there is still suffering and inequality in the world and we should be doing everything in our power to eradicate it but that doesn’t change the fact that things keep improving.

From such lofty heights of thinking, I am reluctant to start talking about the world of supply chain and logistics but as that is my profession so I feel compelled to do so…

.. My question is, are we really facing unprecedented challenges in our industry? Yes, we are dealing with Brexit, and yes we have the global coronavirus pandemic has shocked us all, and as a result of these major issues we will be seeing an economic impact, but as with other major global and local events we have faced, the supply chain and logistics world has had to adapt and find a way through.

There have been other big impact events with the ‘ripple effect’ touching most sectors and we have had to shift to accommodate them; 9/11 shut down the world’s air traffic and led to a huge increase in security requirements for air cargo, in 2004 & 2011 there were Tsunami’s that shut down the export of goods from the Far East. The 2007 to 2008 Financial Crisis caused a slump in demand leading to the parking up of many cargo vessels and aircraft that impacted the sustainability of many businesses.

The impact of these examples had on the lives of people cannot be trivialised but they also led to many challenges in keeping the global supply moving, and in general, the global supply chain did keep moving. When unforeseen catastrophic events impact the supply chain responds and the logistics industry adjusts, but how?

It adjusts much like an ecosystem, in synergy and with no one single entity to control it. Each element has an effect on the other elements it comes into contact with. When one element adjusts to disaster and changes it causes other elements to change.

The important point is that the people in the supply and logistics ecosystem are constantly forecasting/planning, doing, checking and acting (the classic Demming PDCA cycle) to maintain a balance of quality, cost and delivery performance for their part of the supply chain. As a result, shocks and interruptions are absorbed, the impacts minimised as quickly as possible and the system adjusts to keep functioning.

So, the next time you see the news proclaiming a supply chain “catastrophe” or a businessperson describing the impact of a change as a “disaster” to their bottom line, remember two things:

1) Catastrophe and Disaster are powerful words and should not, in my opinion, be used to describe the impact on a business’s profitability.

2) There are a dedicated group of professional people working in supply chain and logistics to get over the bumps, both big and small, in the road.

Darren Chaisty FCILT – Director North Star Projects ltd