Your supply chain is beyond control...and that's OK

Welcome to the 33rd edition of The LogTech Letter, a weekly look at the impact technology is having on the world of global and domestic logistics. Last week, I explained why I believe global trade compliance technology to be overlooked and underappreciated and why that may change. This week, we have a guest pinch-hitting for me while I’m on vacation. Brian Glick, CEO of Chain.io, expounds on the idea that supply chains are decentralized by nature, and to manage them effectively, you need to let go.

As a reminder, this is the place to turn on Fridays for quick reflection on a dynamic, software category, or specific company that’s on my mind. You’ll also find a collection of links to stories, videos and podcasts from me, my colleagues at the Journal of Commerce, and other analysis I find interesting.

For those that don’t know me, I’m Eric Johnson, senior technology editor at the Journal of Commerce and JOC.com. I can be reached at eric.johnson@ihsmarkit.com or on Twitter at @LogTechEric.

Note: I delegated this week’s newsletter to Brian Glick while I’m out this week. Appreciate the guy I call the “MacGyver of Logistics Tech” filling in - he’s sharing some thoughts related to this piece I wrote on the stumbling block toward single supply chain systems.

"The tighter the fist, the looser the sand." -- The Fleet Foxes

"The more you tighten your grip, Tarkin, the more star systems will slip through your fingers." -- Princess Leia

Modern computing systems are large, complex, distributed systems.  When you open up a search engine and start typing, the modern autocomplete feature instantly starts returning results.  Have you ever stopped to think about the billions of things that have to happen for that instant transaction to occur?

Your computer has to be turned on and has to be running a modern operating system with a modern web browser.  It has to be connected to the internet.  Your service provider has to maintain a network of thousands of routers, and many thousands of miles of fiber optic cable. The search engine operator in turn runs thousands of programs across millions of servers to serve up your answer in a matter of milliseconds. 

Beneath all of this are layer upon layer of other systems that need to operate effectively to support this service. Electrical generation, billing systems, transportation to get engineers to their desks, healthcare systems to keep those engineers healthy, marketing departments to make sure you know the search engine exists... the entire thing is layer upon layer of interwoven complexity. If you set out to map this all out, you'd never finish. You'd find an infinite set of dependencies, and each layer would open up another layer of infinite complexity beneath it.

For those of us who have chosen supply chain careers, this all feels a little too familiar. Peel back the onion on any topic and you'll find a hundred more buzzwords and areas of focus. Open up the topic of ocean freight, and you'll find pricing, transportation execution, visibility, etc. Open up pricing and you'll find contracts, spot rates, dynamic rates. Open up dynamic rates, and dig deeper into LCL & FCL rates, door-to-door and port-to-port, and on and on and on.

Turn the problem on its side and you'll see a whole different dimension of complexity. Your supply chain operates within the most complex physical and economic ecosystem in the history of human existence. A port strike in Los Angeles means your fruit is rotting at a clogged port in Vancouver. The khamsin blows across Egypt leaving a ship blocking the Suez and you can't get stock on shelves in Brussels. A trader in London makes a risky bet and your vendor in Bangladesh can't buy raw materials on credit.

"Ok, we get it," you say, "the world is complicated. What can we do about it?"

The answer is "make peace with it." 

That peace is really, really hard for us. Many (if not most) of us are here because we're control freaks. We love to take on big, challenging problems and organize them, slice them up, analyze them, and eliminate them. We see our supply chains as big bears, and our job is to wrestle the bear to the ground.

Twenty or thirty years ago that might have worked. The systems were simple enough that you could hold them in your head (at least at the broadest levels). You brought product into one port, sent it to a distribution center and handed it off to a small group of retailers or factories. You stood above it like a chessmaster and could survey the whole board.

Then it got a little bigger. You added a spreadsheet so you could see the whole chessboard at once. Then the spreadsheet broke, and you went to the TMS. It automated some of the moves. Then the TMS wasn't enough. You added the control tower so you could see the 50 chess games of chess you were playing at the same time.

Guess what... we're not playing chess anymore.

We're managing large, constantly shifting organic systems. If we don't change our metaphors, we're going to collapse (or maybe we already have).

My challenge to everyone in the industry is to start thinking about your supply chain like you think of your body. You don't need to understand how every cell works and how they're all interacting to run a marathon. You don’t “control tower” every biochemical reaction in your body. You eat well, train regularly, and deal with injuries as they occur.

Your supply chain is the same. You need to feed it with investment and knowledge, you need to exercise the parts that are most important to you. You need to put it in a safe environment filled with vendors and service providers that you trust. You need to accept that it's full of complex systems and interactions that you can't ever completely understand, and you need to trust that if you feed it properly, train it well, and watch it grow, it will be fine.

Once you accept that you have no more control over your supply chain than you do over your body, you'll be free to step away from the cellular level and really start thinking strategically about the bigger systems at work. That's where the next generation of innovation will come in.

Here’s a roundup of pieces on JOC.com the past week from my colleagues and myself (note: there is a paywall):

• I wrote about Blume’s new product that’s aimed at making the company more integral beyond predictive visibility, and into being an upstream supply chain planning tool.

• Cathy Morrow Roberson reported on Stord’s new $65 million funding round, further evidence that a new era of contract logistics, enabled by tech, is upon this. View this investment as part of a bundle of venture capital thrown at on-demand warehousing providers Flowspace and Flexe in recent months.

And here are some recent discussions, reports, and analysis I found interesting:

• Weekly moving update: still not moving to Florida or Texas.

• Keith Rabois is becoming increasingly boring so this will be a guest VC of the week slot now. This week, come on down, David Sacks! Supreme confidence is a hell of a drug.

  

Some upcoming events I’ll be involved in:

• Registration is open for the IAPH World Ports Conference June 21-25. I’ll be involved in various technology-related elements of the program. MSC CEO Soren Toft and Hapag-Lloyd CEO Rolf Habben Jansen will both speak. Don’t miss out!

• I’ll be participating in Transporeon’s Visibility Day 2021 April 15. The focus will be on real-time visibility opportunities and challenges in Europe.

Disclaimer: This newsletter is in no way affiliated with The Journal of Commerce or IHS Markit, and any opinions are mine only.