Over the past week the greater Seattle area was met with the largest snowfall in a decade or two. Recently I was in New York City, where the season’s supply of snow had dropped last October, with barely a blizzard since. Back in November during a train ride through the Alps courtesy of an unexplained Swiss Air cancellation, I saw unseasonably snow-free peaks. Whether or not you believe the science of climate change and the causal link between increased levels of atmospheric carbon and increased temperatures, a lean thinker with a basic understanding of the importance of logically sized levels of stock within the value chain, a.k.a. standard work in process, should be concerned by the evidence that our glaciers are melting into our oceans.
First, a review of the basics of consumption rate, replenishment time, standard work in process (SWIP) and what this means for delivery to the customer. Simply put, if our replenishment time is longer than and asynchronous with the consumption rate of our customer, we need a SWIP reservoir that allows us to build up and draw down stock. This requires that we have the throughput capacity to get ahead of demand in the first place, i.e. by producing while customers sleep. For a detailed explanation of what this means for a complex manufacturing process, please see this article.
The water cycle and a supply chain balanced with customer consumption rate using SWIP are instances of the same thing. In fact I’m fairly certain that our recently broken global financial system vis a vis the U.S. housing market is nothing more than runaway overproduction (houses) and a shortage of raw materials (cash) fueled be false orders placed into the system (housing bubble). Nature isn’t greedy, and doesn’t make things overly complicated, so neither should we humans when it comes to systems that we build or influence.
Wondering about the water cycle, melting glaciers, and unusual precipitation, I looked into what some are calling “peak water”. Although we won’t run out of water in the same way that we can burn up all of the petroleum that we extract from the earth, we may run out of water we can use faster than we think. According to research by Russian hydrologist Igor Alexander Shiklomanov on the distribution of the 1.34 billion cubic kilometers of water on our planet, we have:
96.5% of water as salty ocean
>1% of water as soil moisture or inaccessible groundwater
1.75% as glacial ice
<1% of water is accessible for human use
While one might think “Heck, <1% of 1.34 billion cubic kilometers is more water than we'll ever need in our lifetime!" the truth is more sobering. Less than 0.008% of the fresh water is readily accessible in the form our lakes, rivers, dams and rain. And not even all of that is fit for human consumption without treatment. What about the nearly 2% of water in glaciers? Why not tap that source? This is in fact what the water cycle does. During cold, wet winters water is stored as ice in glaciers and during warmer weather the ice is released as water into streams. The world's glaciers are free reservoirs of freshwater, like tens of thousands of man-made dams. The trouble seems to be some of these glaciers are melting into the salty ocean, increasing the unusable portion of the earth's water supply, even while reducing the SWIP buffer that we rely on for melt-off flow in the spring and summer. When a supply chain runs itself dry of SWIP, bad things happen. The downstream process must wait for replenishment at full lead-time of the upstream process, or find a quick alternate source of supply. In the raw materials-to-retail supply chain this at most causes a lack of product on the shelf, lost customers and fired supply chain managers. If we are heading towards a drastic depletion in the glacial SWIP from our water cycle, we will face the challenges of finding another source, speeding up the replenishment of our SWIP through some mega-freezing technology, or waiting out the literally glacial lead-time to replenish. The value stream map is a popular tool but few take it far enough. The typical loops are customer-producer, producer-supplier, and intra-producer. The vast majority of value stream maps look only at the production, distribution and consumption loops, not at the wider and longer-cycle loops such as the replenishment of water, air, raw materials, skilled labor or goodwill. The reward systems of our current business world motivate this. The reality of very long lead-time replenishment is buried in the triangles labeled with the letter "I" for inventory. There seems to be an inexhaustible inventory of minerals, water, topsoil, clean air or free flowing fuel. The most precious materials require glacial or even geologic time to replenish. The Earth doesn't have a graveyard shift it can run to catch up. We ignore the depletion of SWIP at our peril.