How to Fix Broken Supply Chains | Dustin Burke | TED

Summary

This script discusses the challenges of supply chain resilience, highlighting the 1973 toilet paper shortage and current issues like microprocessor shortages. It suggests innovative solutions such as risk sharing, radical transparency, and automated recommendations to improve supply chain efficiency and resilience against crises, emphasizing the need for a shift from traditional approaches to more imaginative strategies.

Takeaways

• 😲 The great toilet paper shortage of 1973 was caused by panic buying triggered by a joke told by Johnny Carson, not by a pandemic or supply shortage.
• 🔄 A supply chain is a complex journey from raw materials to finished goods, involving multiple stakeholders from suppliers to consumers.
• 🌪 Supply chain disruptions can occur due to various factors, including natural disasters, pandemics, and geopolitical instability.
• 🛡️ Common advice for making supply chains more resilient includes diversifying risk, better forecasting, and building inventory buffers.
• 🤔 The speaker questions why companies haven't fully adopted the common advice for resilience, suggesting that competing priorities and steep competition hinder implementation.
• 🔄 The concept of sharing risk in supply chains is likened to insurance, where industry players could share the cost of keeping extra materials or machinery for crisis times.
• 🏥 An example of risk sharing is the pharmaceutical industry potentially sharing the cost of storing extra active pharmaceutical ingredients (APIs) to avoid shortages in a crisis.
• 🔍 The importance of radical transparency in supply chains is emphasized, suggesting that knowing the full extent of one's supply network is crucial for risk management.
• 💡 The speaker highlights the need for accurate, up-to-date maps of key inputs and their sources within industries for better supply chain planning.
• 🤖 The potential of technology, including data mining, AI, and machine learning, to analyze vast data sets, predict problems, and recommend actions in supply chains is discussed.
• 🛑 The script calls for imaginative solutions and a reevaluation of how businesses and governments can use shared risk, transparency, and automated recommendations to build more resilient supply chains.

Q & A

What was the unusual situation described at the beginning of the script?

The unusual situation was walking into a local supermarket and finding empty shelves, particularly with no toilet paper available.

What was the cause of the 1973 toilet paper shortage mentioned in the script?

The 1973 toilet paper shortage was caused by panic buying triggered by a joke told by Johnny Carson, not by a pandemic or manufacturing issue.

What is a supply chain and why is it important?

A supply chain is the journey that any item takes from raw materials to finished goods and finally to the consumer. It's important because it ensures the availability and distribution of products.

What are some common disruptions mentioned in the script that can affect supply chains?

Common disruptions include natural disasters, pandemics, and geopolitical instability.

What are the common prescriptions for making supply chains more resilient?

Common prescriptions include diversifying risk, better forecasting the future, and building buffers like stockpiles of inventory or additional manufacturing equipment.

Why do companies struggle to implement the advice for more resilient supply chains?

Companies struggle because the advice doesn't stand up against competing priorities and steep competition that occurs between crises and shocks.

What are the three new ideas suggested to improve supply chain resilience?

The three new ideas are sharing risk, radical transparency, and automated recommendations.

How does the script relate the concept of insurance to supply chain management?

The script compares the concept of insurance, where risk is shared for low-probability, high-impact events, to the idea of industry players sharing the cost of keeping extra raw materials or machinery for use in crises.

Why is radical transparency important in supply chains?

Radical transparency is important to identify and understand the interconnectedness of different parts of the supply chain, including knowing who shares the same risks and where key inputs come from.

What role can technology play in improving supply chain resilience?

Technology, such as data mining, artificial intelligence, and machine learning, can help analyze large amounts of data, predict problems, notify managers, and recommend actions to take, thus improving resilience.

What historical example is given to illustrate the need for better supply chain planning?

The script mentions the 2009 H1N1 flu outbreak, during which there was a dire need for N95 respirators and personal protective equipment, highlighting the need for better planning to avoid repeating mistakes.