At this stage of the early 21st century, when transparency has evolved from buzzword to business principle, when it’s possible to track anything just about anywhere, you might think it would be a simple matter to choose some everyday product—a cup of coffee, say, or a pen—and trace the paths taken by its parts and ingredients, from raw material extraction to assembly and their final delivery to you.
I thought so, and I was wrong, though instructively so. (...)
Sure, I knew that the stuff of our product-saturated world comes from somewhere else, typically not in my own United States. And I knew, though I hadn’t thought much about, how stuff going into the stuff comes from somewhere else, too, that a pair of Nikes made at a Vietnamese factory contains materials from all over the world.
But I hadn’t even considered what makes this possible: the inconceivably vast web of supply-chained relationships, intricate as any ecosystem, synchronized like the movements of so many mechanical watches. These supply chains, the ingenuity and industry they embody, are truly marvelous. They’re also quite opaque.
It’s easy to find out how things move—in the air, on the ground, across the seas. It’s far harder, if not downright impossible, to find the source. This is what I learned: At this stage of the early 21st century, we know where everything goes to, but not where it comes from.
After receiving the assignment, I tried to think of common products that would make for a good narrative. First to mind was Bit-o-Honey candy, at once folksy and agro-industrial artificial. I imagined buying some at a Brooklyn corner store, finding out who delivered it, figuring out who delivered to them, tracking the shipments back to a single factory and then digging back into the ingredients, finishing in some Iowa cornfield where the “honey” comes from.
Nestlé USA’s brand affairs didn’t want to talk about it, though. Neither was Starbucks inclined to shares the details of their lattés, or Kellogg’s their breakfast cereals. In the meantime, I dug into academic literature on supply chains and life-cycle analyses, figuring that someone must have done my work already—a Harvard Business Review case study, maybe, a white paper somewhere on a single well-documented product.
I couldn’t find any, nor could any supply chain experts I contacted think of one. The literature dealt with flows, not sources. It said stuff like, “GSCM is a large mixed-integer linear program that incorporates a global, multi-product bill of materials for supply chains with arbitrary echelon structure and a comprehensive model of integrated global manufacturing and distribution decisions.” I did learn, though, that I didn’t really understand what supply chains are.
I’d thought of them mostly in terms of delivering Amazon orders and keeping Staples stocked. Those are just endpoints, the final few steps of a waiter carrying a meal on a tray. And what I really didn’t get was that supply chains don’t just carry components and ingredients, but synchronize their movements. Shipping a box of pens to Staples is the obvious part. Coordinating the arrival of barrels, caps, boxes, ink cartridges, and nibs (through which ink flows) at the pen factory—and also metal to the nib factory, oil to the plastics-maker, and so on—is the bulk of what supply chains do, and in the most efficient manner possible, with algorithms optimizing everything from shipping networks to the path of pallets through warehouses, with an eye to what happens when one of these many moving parts goes invariably astray. (See the Nautilus story “The Box That Built the Modern World” to read how containers helped make the modern supply chain possible.)
If you’re a brilliant young mathematician, one of the things you might do, if you don’t feel like theorizing about quantum physics or engineering suspension bridges or figuring out how genomes work, is move boxes. It blew my mind. So did the idea that, from a certain perspective, the actual products almost matter less than the informational structure that guides them.
To some readers, this might be old hat. To me it was like learning of a shadow world. Vivek Sehgal, a product strategist at Manhattan Associates, which counts Wal-Mart and Adidas among its customers, introduced me to an important phrase: logistics cluster. As car manufacturers once gathered in Detroit, or Internet companies in Silicon Valley, logistics—supply chain managers, IT providers, warehouses, shippers and truckers and dispatchers, the myriad businesses that support them—now concentrates in places like Memphis, Tenn.; Zaragoza, Spain; and Rotterdam, Holland, which in a few decades might be considered archetypal 21st century cities, our new Detroits. Sehgal likened them to the Silk Road of antiquity.
Sehgal also shared a Wall Street Journal article on how an unexpected blip in the chip chain ricocheted through a just-in-time-reliant electronics industry in early 2009. In the span of a few months, the industry laid off 20 million factory workers. Economies contorted across Asia.
Perhaps, I thought, I could write about a cell phone or tablet—but no. Kenneth Kraemer and Greg Linden, co-authors of “The Distribution of Value in the Mobile Phone Supply Chain,” disabused me of that notion. It was unrealistic. “Capturing all the logistics linkages for a mobile phone would take years,” said Linden. Even focusing on one part, a single display or chip, would be a daunting: They’re too complicated, and the companies secretive and distant.
I thought so, and I was wrong, though instructively so. (...)Sure, I knew that the stuff of our product-saturated world comes from somewhere else, typically not in my own United States. And I knew, though I hadn’t thought much about, how stuff going into the stuff comes from somewhere else, too, that a pair of Nikes made at a Vietnamese factory contains materials from all over the world.
But I hadn’t even considered what makes this possible: the inconceivably vast web of supply-chained relationships, intricate as any ecosystem, synchronized like the movements of so many mechanical watches. These supply chains, the ingenuity and industry they embody, are truly marvelous. They’re also quite opaque.
It’s easy to find out how things move—in the air, on the ground, across the seas. It’s far harder, if not downright impossible, to find the source. This is what I learned: At this stage of the early 21st century, we know where everything goes to, but not where it comes from.
After receiving the assignment, I tried to think of common products that would make for a good narrative. First to mind was Bit-o-Honey candy, at once folksy and agro-industrial artificial. I imagined buying some at a Brooklyn corner store, finding out who delivered it, figuring out who delivered to them, tracking the shipments back to a single factory and then digging back into the ingredients, finishing in some Iowa cornfield where the “honey” comes from.
Nestlé USA’s brand affairs didn’t want to talk about it, though. Neither was Starbucks inclined to shares the details of their lattés, or Kellogg’s their breakfast cereals. In the meantime, I dug into academic literature on supply chains and life-cycle analyses, figuring that someone must have done my work already—a Harvard Business Review case study, maybe, a white paper somewhere on a single well-documented product.
I couldn’t find any, nor could any supply chain experts I contacted think of one. The literature dealt with flows, not sources. It said stuff like, “GSCM is a large mixed-integer linear program that incorporates a global, multi-product bill of materials for supply chains with arbitrary echelon structure and a comprehensive model of integrated global manufacturing and distribution decisions.” I did learn, though, that I didn’t really understand what supply chains are.
I’d thought of them mostly in terms of delivering Amazon orders and keeping Staples stocked. Those are just endpoints, the final few steps of a waiter carrying a meal on a tray. And what I really didn’t get was that supply chains don’t just carry components and ingredients, but synchronize their movements. Shipping a box of pens to Staples is the obvious part. Coordinating the arrival of barrels, caps, boxes, ink cartridges, and nibs (through which ink flows) at the pen factory—and also metal to the nib factory, oil to the plastics-maker, and so on—is the bulk of what supply chains do, and in the most efficient manner possible, with algorithms optimizing everything from shipping networks to the path of pallets through warehouses, with an eye to what happens when one of these many moving parts goes invariably astray. (See the Nautilus story “The Box That Built the Modern World” to read how containers helped make the modern supply chain possible.)
If you’re a brilliant young mathematician, one of the things you might do, if you don’t feel like theorizing about quantum physics or engineering suspension bridges or figuring out how genomes work, is move boxes. It blew my mind. So did the idea that, from a certain perspective, the actual products almost matter less than the informational structure that guides them.
To some readers, this might be old hat. To me it was like learning of a shadow world. Vivek Sehgal, a product strategist at Manhattan Associates, which counts Wal-Mart and Adidas among its customers, introduced me to an important phrase: logistics cluster. As car manufacturers once gathered in Detroit, or Internet companies in Silicon Valley, logistics—supply chain managers, IT providers, warehouses, shippers and truckers and dispatchers, the myriad businesses that support them—now concentrates in places like Memphis, Tenn.; Zaragoza, Spain; and Rotterdam, Holland, which in a few decades might be considered archetypal 21st century cities, our new Detroits. Sehgal likened them to the Silk Road of antiquity.
Sehgal also shared a Wall Street Journal article on how an unexpected blip in the chip chain ricocheted through a just-in-time-reliant electronics industry in early 2009. In the span of a few months, the industry laid off 20 million factory workers. Economies contorted across Asia.
Perhaps, I thought, I could write about a cell phone or tablet—but no. Kenneth Kraemer and Greg Linden, co-authors of “The Distribution of Value in the Mobile Phone Supply Chain,” disabused me of that notion. It was unrealistic. “Capturing all the logistics linkages for a mobile phone would take years,” said Linden. Even focusing on one part, a single display or chip, would be a daunting: They’re too complicated, and the companies secretive and distant.
by Brandon Keim, Nautilus | Read more:
Image: Glyn Lowe
