Kaizen

The Seven Grand Challenges for Supply and Spend Management in the Next 25 Years

By Jon Miller Published on September 17th, 2008

Our friends at Sourcing Innovation are running a cross-blogging series on the Seven Grand Challenges for Supply & Spend Management (thus the grand title above), and below is my contribution. What will be the seven grand challenges for supply chains over the next twenty five years?
1. Putting safety first. Food safety, product safety, carbon footprint, environmental impact, toys and baby bottles that don’t poison us – all of these things are supply chain decisions. We buy from companies who are willing to buy from questionable sources and sell to us these lowest cost goods because we aren’t in the habit of asking “Is this a safe price?” when we pick up a toy, a piece of electronics or a package of food. When it’s “price first” we can hardly trust the product to be safe. When automotive suppliers can’t stay in business making good parts for good automotive OEMs, we are again paying an unsafe price. When a farmer has to either starve or poison their food to get it to market at a low price, that’s not good for anyone.
2. Getting serious about zeppelins. They may actually be airships, blimps or dirigibles but we need more means of transportation that begin with Z. Dirigibles have been a viable and cost effective and medium-fast method of transporting goods for some time, but we need to take another serious look. Modern air travel is undignified. Airships nicely fill the niche between boats and airplanes in the global logistics model of tomorrow. The increase in jet fuel costs, the resulting collapse of commercial airlines, and the promise of Turtle airships may bring us a world of solar powered 200 miles per hour travel and transport very soon.
3. Waiting for it. The vast majority of the things we are used to getting sent to us by jet in 2-3 days could get to us by train in 10-20 days and we would be just fine. Let the ships and trains carry more inventory in the supply chain, not less, to reduce the energy consumption and pollution. Why be concerned about a little bit of extra inventory tying up the cash when we are creating a greater waste of energy, transportation and an unnatural tension in the supply chain? Just in time is a great weapon to possess, but it doesn’t mean we should always use it. Consumers shouldn’t demand immediate delivery of any and all products only because they can. It’s selfish.
4. Eating the fruits in season. Depending on where you live, and what you believe global climate change will due to your harvest locally, this could be a truly interesting question in the next 25 years. Regardless, we should savor the fruits in season, in the broadest sense of the words. Chemical-ridden, unripe foods shipped still green from far away are far inferior to even foods canned fresh in terms of taste, to say nothing of the total landed cost. When they are so abundant as they are in many Western countries, we no longer appreciate them or what it really takes to bring them to our table. The cost for these items may soon be too high, and a tangerine at Christmas may be a treat worthy of the stocking again.
5. Paying to waste. Cities including Seattle are increasingly passing ordinances aiming to outlaw disposable plastic bags in grocery stores by charging shoppers for them. Just because we can throw away a billion plastic bags each year doesn’t mean we should. Bring a backpack, or a shopping bag. Likewise, there is no excuse for the appalling amount of packaging materials we throw away when we purchase consumer goods. We need to create a disincentive to consumers to waste, and an incentive to businesses to innovate their way out of plastic, cardboard, styroroam and other unfortunate packaging materials. Why not a spider silk cocoon or bio-engineered banana-peel packaging? Twenty five years is a long-time. If the world economy is still healthy and above water yet hasn’t figured this out, I will be disappointed.
6. Spacing out. Either Jeff Bezos’ increasingly less top-secret rocket building venture, Virgin Galactic or some other newcomer will start reliably launching cost-effective commercial payloads into space soon. Within the next 25 years can we hope to see orbital warehouses and same-day planet drops of care packages, anywhere on the planet? Given the above 5, is it something we want?
7. Beaming it over. It’s hard to imagine that we could instantly transport the essence of an apple at almost no cost from any point on the planet to any other point on the planet. Yet compared to twenty five years ago this is what we do with books, records, drawings, and even moving and talking pictures, almost regardless of their size. It’s called the internet and sure this is information and not matter, but we are increasingly finding that it’s all information.
Based on a study of history, my experience in process innovation and knowledge of human nature I suspect that of the list above the technical challenges will prove far easier than the ones that rely on changing human behaviors, without the help of some convincing external forces.

Jon Miller

Jon has dedicated his 25+ year career to the field of kaizen, continuous improvement, and lean management. Jon spent the first eighteen years of his life in Japan, then graduated from McGill University with a bachelor’s in linguistics.

Jon Miller
September 18, 2008 - 8:39 am
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This is one area where I would LOVE to be wrong, Mike 🙂
And feel free to post your own serious analysis here or elsewhere and provide a link.
Thanks for reading.