Human Supply Chains

 When we think of supply chains, our first thoughts are of factories and shipping containers, with huge quantities of goods moving around the world, mainly emanating from China.

 

The current crisis of supply chains is mainly a result of what Covid has done to demand. A critical component of a just-in-time system is somewhat predictable demand. Everything else follows from that first input.

 

Years ago in Shell UK, there were many operational business committees, but the most important one was called the STBT or short-term business team. We spent days creating annual plans for the purposes of targeting and staffing, but these plans inevitably collapsed with the first dose of reality. The STBT had representatives from marketing, manufacturing, and logistics, and tried to make sense of the coming weeks. Oil tankage is limited and so is the capacity to move oil products around. Refineries cannot be turned up or down at will but can only be reset with some effort and cost.

 

The most important input from the STBT was the hardest to predict, and that was customer demand. What could we actually transfer to customers over the coming days and weeks, of which products and where? We had one specific advantage, namely the tankage at petrol stations and certain commercial customers. These acted as buffer capacity, where we could run stocks up or down at short notice with minimal cost. But our most valuable weapon was the past. What did we sell last month? What large orders are in the pipeline? What did we sell in the equivalent months last year? For all the variables involved, the total demand tended to follow a somewhat predictable pattern. With a few tweaks, we could feed that to the production side and they could respond accordingly, so long as there were in the midst of their own crisis.

 

Since those days technology has marched forwards. Businesses have been able to place many more inputs onto computers and use algorithms rather than committees to do the other steps. I am sure that Shell UK still has an STBT (no doubt having used half a dozen different acronyms since my day), but the role has evolved with technology, enabling faster responses and reduced tolerances.

 

What happened with the pandemic was a series of rather sudden and unexpected ruptures to demand. Previous crises were not like this. In the financial crisis demand plummeted, but across most categories following a demographic profile, so the algorithms could make a fairly good guess for most goods most of the time. In this crisis, people started buying different things in different ways at very short notice, and the guesses went haywire. Only now, two years later, have most algorithms started to recover a semblance of dignity.

 

We can overlook the fact that there are more to supply chains than products and factories and trucks. Another critical component are people, and not just the beleaguered managers of the STBT. Even in these days of automation, we still need people to man the factories and drive the trucks. With the global economy now based as much on services as on goods, we need people to execute those services as well.

 

This month I have been travelling in Europe. It has been a lovely experience in many ways, and once again I observe how Europe seems to have developed and become more liveable while the USA seems to be heading in the opposite direction. Another takeaway is how we had temporarily forgotten what a strain travel can be, with its crowded airports and teeming cities. Travelling during the height of the pandemic had its risks and its complications, but it was a joy to move around free of the crowds.

 

My travel has enabled me to witness the people supply chain crisis at first hand, most notably overt the last few days around the glorious city of Amsterdam. First, Schiphol airport, one of the most efficient in the world, is being hambled by staff shortages. It is no fun arriving on a flight that lands at 2AM. I promise you it is far less fun standing by the baggage conveyor belt for ninety minutes at that hour. I tried to stay calm by envisioning a team of just one or two baggage handlers trying to cope with an expected level of demand.

 

Then Amsterdam itself was packed with visitors and a joy to experience, but it seemed that every single establishment was short staffed. I had brunch at one large place where I estimated the team of five to have had less than a month of experience there in total, given their absence of teamwork and complete unfamiliarity with the IT system: everybody was being given the wrong items on their bills! Again, the staff and the customers were remarkably tolerant, as if this situation was quite normal.

 

Businesses have been caught out by the demand upswing. Large or small, they struggled to stay alive in 2020-21, cut staff to the bone and have been understandably cautious in rehiring. That side of the equation has not surprised me, but what has is the way the supply side has not been able to respond either. I can barely remember a time in my life when casual labour was in short supply: who would not welcome a side hustle?

 

I have been pondering the possible reasons for the shortfall. A good place to start is often demographics. Over the last fifty years, two groups have dominated this casual workforce, young adults and recent immigrants. Lo and behold, the EU birth rate declined close to an all-time low during the 1990’s, only to start climbing again after 2010. So the cohort of young adults is now at its minimum. Furthermore, most of these kids are now in tertiary education for longer. As students, they may still go for a hustle, but perhaps for fewer hours. This cohort has also been imaginative in finding alternative hustles to the traditional service sector, via various online activities.

 

And since 2016 immigrants have become less welcome across the EU. I find it pleasantly ironic that some of the very people who may be bemoaning the slow service of their latte may be the same ones who drove politicians to confine to camps in Greek islands the very Syrians and Afghans who would be only too happy to help. We reap what we sow.

 

Then there are the possible reasons related to Covid. Some people are still sick or afraid. Some used stimulus money to sort out the cash flow and can now be more fussy than before. Perhaps a bigger factor is where the young are now living. Many went back to families and away from large cities. You don’t commute a long way for a bar job so the cities may have fewer workers available as a result.

 

I expect things will balance out within a few months; after all that is how market economies work. Wages are rising and conditions are improving. Demand will become more predictable again. Tragically, Ukrainians may become a significant service workforce for an extended period. There is probably a downturn coming as monetary policy tightens, so more mature workers may soon be looking for casual work. Maybe, just maybe, a more humane immigration policy might emerge. That would a cause for celebration, even more than the joy of finally seeing my bag trundle onto the luggage belt at 4AM.

Stable and Unstable Systems

 I am no fan of Guardian writer George Monbiot. The phrase “crying wolf” might have been invented for this Cassandra of a journalist. If 5% of the apocalyptic prophesies peppering his articles had come true, we would all be dead by now. His speciality is environmental writing, and, while he does unearth excellent new angles of despair, his solutions tend to be wildly impractical, and the overall tone turns me off after a while.

 

Still, earlier this month he did introduce me to one of his smart new angles. The concept was simple enough, and even familiar, but I found the context to be new and it did then lead my mind down a few other paths that I found interesting. Monbiot divided systems up into stable and unstable ones. Both types of system are subject to change and even to shocks, but the stable ones can absorb most of these while the unstable ones are more fragile and liable to collapse completely.

 

Monbiot’s rather strange example was of the system of global food production and distribution, and true to his pessimistic form, he argued that this had possibly become unstable to the point of imminent collapse, which would presumably be defined by widespread famine across much of the world.

 

He pointed out a few potential root causes to support his claim. One was the concentration of food production. It is potentially a good thing when places with suitable climates or economic advantages come to produce more than their locally required share of certain foodstuffs. These places can produce at a better quality and cheaper and then trade with other places to create overall societal value, despite the additional costs of storage and distribution involved. Thus everyone can potentially have a broader diet with better nutritional content at an affordable cost.

 

The problem is that this improved system is more complex and has more components that can go wrong. Even a poor African nation with a harsh climate can produce enough for people to live on, otherwise its population would have died out long ago. Sure, there were droughts and diseases, but the simpler system could find ways to compensate over time, even at the expense of malnutrition and some death. With the new complex global system, that nation may have forgotten how to produce its staples and the people may have evolved to no longer be able to survive with that diet anyway. Yet there is no guarantee that the potentially abundant global diet will always make its way to every corner of the populated world.

 

In Monbiot’s view, this risk is then exacerbated by a tendency towards monopolies. Not only do a very few nations produce most of the world’s needs of specific crops, but the production and distribution are increasingly concentrated in a very small number of firms. These players buy each other out and relentlessly drive out costs to maximise returns to shareholders, but their operations may become so efficient that tolerances become too small.

 

Put these root causes together and add a shock or two and disaster becomes possible. Of course, the shocks we now face include the Ukraine war, on top of the coronavirus disruptions and against a background of growing hostility and suspicion between large nations. A disaster may indeed be about to manifest itself in wheat, in sunflower oil and in some key chemicals.

 

Here Monbiot rests his case. He may be right. There is certainly a looming crisis of hunger around the world. The Economist highlighted this in the very early stages of the war and the avoidance of famine has become an urgent consideration of the UN and the diplomatic efforts of altruistic countries. The intense concentration and tightness of supply chains will probably make this crisis more immediate and acute than it would have been before the onset of globalisation.

 

This is a fair and established argument. But, as usual, I fear Monbiot may be trying to lead us to places where his logic is less sound. He implies that the globalisation of a diet and concentration of production are inherently bad things, driven by his favourite evil force, capitalism. He regularly pins the blame for climate change and a host of other poor outcomes on the same forces. He is arguing that the market is not the best method to allocate such resources.

 

But do we really want to go back to subsistence diets? I am currently in the south of Portugal, and every day when I visit our small town, I see the impact of past diets: the older locals are emaciated and about a foot shorter than the younger ones or the expatriates. Were people happier then? I doubt it; healthy life expectancy was certainly much lower.

 

And if the market is so bad, we must consider the track record of the alternatives. What about the Irish famine of the 1840’s, or Stalin’s famines of the 1930’s or Mao’s of the 1960’s? Or the poverty in Venezuela, a land of abundant potential wealth, today?

 

Furthermore, when disaster does strike, won’t the market and technology help us to recover more quickly than we did in the past? It may be halting, and unfair, but recovery will occur somehow. As is happening around the world right now, companies will start to build in some resilience and governments will legislate to protect their citizens, especially those that might become violent or vote incumbents out of office.

 

So I don’t accept that the global food system is inherently unstable, and I don’t accept an implied argument that overriding the market is justified, except in smart ways of regulating emergency supplies and of encouraging competition.

 

But the distinction between stability and instability did lead me to consider other systems in that way. Monbiot’s conclusion that excessive complexity and uniformity are risk factors, while built in fail safes and contingencies are good, feels sound.

 

The human body is a wonderful example of a stable system, and we still don’t have the technology to fully understand how. Evolution is an amazing force towards stability. Somehow we seem able to heal from almost anything, and advances in medicine improve our abilities every day. Reproduction, cell renewal, bacteria and many other factors play a role in our remarkable stability.

 

The climate may well be an unstable system just now, as I am sure Monbiot was leading us to conclude from his article. There are too many inter-dependent parts, it is hard to see the full picture, and the human actors are not aligned in motives and incentives. Our progress will surely be messy and there will be disasters. But even here I think humanity will find a way to recovery, though perhaps with many decades of lost lives and less attractive conditions.

 

What about the financial and economic systems? In 2008 the financial system in the capitalistic world appeared unstable because so much risk was piled into so limited an asset class, so the scale of loss was large and the recovery slow. But ultimately the actors could align behind somewhat common goals, and with the help of some excellent political leadership, sound regulations emerged. As our collective understanding of economic drivers improves, the system promises to become even more stable, though not necessarily fairer. I am happy to join in with Monbiot’s frustration that, even with stable systems, humanity consistently falls below its potential.

 

Is the military equilibrium stable or unstable? That will likely be tested over the next few years. The concept of MAD never worked for me as an inherent stabiliser, and, indeed, the great powers are working to actively undermine it.

 

Then there is human governance. It is fashionable to argue that a system like the Chinese one is more stable than the current mess evident in democracies. But I feel we must take the long view. Concentration of power gets things done and can perform well over an extended period. But power dos tend to create corruption, and as inequities grow, and are bottled up via repression until they explode, and the longer the bottling up the greater the explosion tends to be.

 

Democracies, despite having more checks and balances, are not immune, as the current trends in the US demonstrate. But, sooner or later, there will be a reckoning and the people’s will be heard. Over time that will becomes more informed and fairer.

 

Overall, I find myself more in the camp of Steven Pinker than of George Monbiot. But even Pinker accepts that progress does not follow a straight line and that plenty of disasters pepper the path of development. 

Finding Peace

 Peace is underrated. If we are at peace, we are surely happy and contented, and in a state where we can experience joy. As an individual goal, perhaps there is none better.

 

It is not a coincidence that individual peace features so abundantly in the gospels, and in our liturgies. No doubt it is the same for other faiths. “Peace be with you” is one of the most common utterances, for good reason.

 

And at the end of life, helping residents to find an inner peace is a goal of the nuns running the home where we volunteer. They channel their own faith in support, but they are not imposing that faith on the residents. But they try to help the people to reconcile themselves to death by reaching a state of peace. Of course trying to reduce their levels of physical pain is a part of this process.

 

At its best, the renaissance music we love also exudes a sense of peace. Perhaps our favourite CD is by an a cappella group called The Sixteen with the title Music for Inner Peace. Invariably when we play it, the music weaves its magic and achieves the desired effect. I find it especially helpful when surrounded by noisy traffic and impatient New York drivers.

 

I am not advocating that we all lounge around in our bedroom slippers all day and become inactive. Peacefulness is not the same as inactivity. Indeed, if we are bored or slovenly, we may find it hard to achieve a state of peace. Time can drag and our thoughts can cause anxiety.

 

I am also not advocating that we should all explore drugs, or even become monks and nuns, though I sometimes envy the simplicity and certainty apparent in many of their lives.

 

Indeed, peace is one of those life goals that is treated more as a desired outcome than the result of a series of inputs. This is true for happiness and joy as well. Frantically seeking out these things, whether via retreats or drugs or sleep monitoring devices or the faddish ideas of some guru, risks being counterproductive.

 

Simplicity as a goal can be similar, in business as well as our personal lives. I witnessed many business campaigns aiming for simplicity, and they generally failed. I found that simplifying the business model itself was the key to achieving a simple business. What is our essence and our edge? What activities, products and customers are fundamental to those things? What stops us from eliminating everything else?

 

So, finding an inner peace is a great goal, yet actively searching for peace is likely to fail. Yet last month one of our kids paid me a big compliment when remarking that I exuded peace. I don’t think that she was saying that I had become a vegetable. So it set me thinking. Is that true? If so, how did I achieve that?

 

I reached for another tool familiar from a business setting, that is to look to opposites. If actively searching for peace is a chimera, how about trying to avoid its opposites?

 

Miriam Webster offered three overlapping definitions for peace, and many antonyms for each of these. Peace can be seen as a state without war, a freedom from disturbing thoughts or a freedom from disturbance. Antonyms are respectively conflict, stress or dread or anguish, and commotion or uproar. Now these are things we can usefully work on. 

 

Some conflict in life is almost inevitable. Rolling over and not sticking up for our rights and values is no recipe for peace – that will make us full of anguish. So the goal must be to avoid unnecessary conflict, to handle conflict, and to resolve conflict.

 

The religious example here is about resolving conflict. In Christian homilies, we are often offered the good advice to reach out to those with whom we have a broken relationship, one with suspicion and unresolved issues. This also forms a key element of twelve-step programs. This is tough to do, but it is easy to see how it can be effective. After some initial posturing, the other party will welcome our advances, and both of us can remove a simmering cause for the absence of peace.

 

As for avoiding and handling conflict, we should not run away from conflict completely, but try to learn skills of communication and of seeing things from the point of view of the other side. In my case, less impulsive showing off by putting others down would surely help. More fundamentally, we can to extent choose our relationships, especially the one with a prospective life partner. If, after a while, we find that we don’t often fall into conflict and that we resolve disputes easily, perhaps we are well matched. Dating websites might do well to emphasise that ability over a photo image or how somebody like animals or some boy band.

 

The second antonym is about fear, stress and anguish. Some of us find this easier than others. It certainly helps if we can love ourselves enough to be constantly regretful, or full of guilt, or with egos that need reassurance over what others are thinking about us. Finding peace with ourselves is key here. I like the commandment to love the Lord thy God (which I interpret of having the humility to accept fate), and to love thy neighbour as thyself. The part that we often forget is to love ourselves.

 

To an extent, we can also learn to live our lives to avoid the things that make us fearful or anxious. Choosing relationships come back here, but also choosing activities, and choosing where to take a risk for a thrill and where to be more cautious.

 

Then the last antonym is commotion or uproar. This is the one that advertisers and bankers undervalue, because they want us to live uproarious lives that involve spending more money. Being motivated to post an image a day on Instagram from a new location, activity or relationship might feed our ego in the short term but is likely to work against peace over time. We can make compromises. I love living in the city for its culture and vitality. But the incessant noise and reckless and angry behaviour by fellow drivers this morning made me feel anything but peaceful.

 

Another source of both commotion and anger can be following the news. Our news feeds and the lazier TV channels seek to funnel outrage, so they can get more clicks and perhaps to support the causes of their benefactors. We will do better if we proactively choose when and how to stay to up to date with current affairs. Again, social media do not help here. But the solutions are easily within our reach. I love to read The Economist and The Guardian Weekly, from cover to cover and at a measured pace, and to avoid too much impulsive searching for stories. Following the war in Ukraine from outrage to outrage is hardly a recipe for our peace (and still less, theirs), but I find I can keep some perspective and emotional balance by choosing my outlets and my frequency of updates.

 

There are other avenues to dig into here, and perhaps it will be a good holiday project for me to explore some of them. I am sure I could adjust my habits to yield more peace without sacrificing very much. My daughter’s welcome pronouncement I am doing that well already is no reason to ignore the possibility of doing better still. 

 

Peace might be the most underrated of all goals. At a personal level, peace in hearts and peace in relationships must be the best recipe for harmony. It is hard to imagine people at peace with themselves committing horrifying acts, or even allowing their nations to wage war or harbour grudges. A few elements of modern society conspire against us, but, unless we have more mental health issues than most or our circumstances are unusually tough, the remedies are readily available to us.