Fact: Current Supply Chain Logistics No Longer Work, Yet Why Then Is Tesla Thriving? And How To Fix It; Intelligently.

It is tough to wiggle away from this simple fact. The world is facing shortages on hundreds of fronts. Yes, it is true; we didn’t prepare very well or even see this coming; add in the hurdles and pitfalls experienced from the Covid-19 pandemic. Semi-conductors might be the most obvious, but here is a broader list, some of which are utterly confusing: Chlorine, gas (petrol in the UK), ketchup, timber, steel, other metals, tennis balls, nurses, ammunition, medical supplies, and paper bags. We have all see then may lay to stockpile toilet paper and even domesticated animals. 

Over sixty container ships are queueing outside the Los Angeles docks at the writing of this story, mainly because there aren’t the skilled people to bring them in and unload them or even drive the contents away. We have significant inflation on base materials, people costs, and even industrial space rents as most of us still are working from home. In an amazing turn, warehouse rental space prices are exploding just when we can’t fill them for the shortages we have. This problem won’t be going away quickly, so the problem is going away quickly.

Logistics isn’t just an issue in the US. Ask anybody trying to fill an automobile with gas in the UK that they can’t get, and you will see why the Army is now stepping in to drive gas containers. It feels like the 1970s in the UK again. Fifty years later, this is a problem that the modern supply chain should have solved. Traditional supply chain ideas have got us into this mess. When businesses run lean on inventory, focus on core components, and stretch turn rates to be as fast as possible, issues like this are bound to appear. Interconnect lots of waypoints into the supply chain like cogs in a wheel, going faster and faster. 

The challenge with this is the same as opening the back of an analog watch and putting something in between one or two cogs. The whole system literally stops. The moment is on us to change this completely. Imagine an intelligent watch where each cog could adjust itself if something got in its way or if something caused another cog to get jammed.

That would be an intelligent engine inside a watch, adjusting to a changing environment if and how it needed to. Maybe one cog would drop out and have other cogs connect directly and change its rotation to keep telling the time correctly.

This intelligent watch idea is precisely what we do not see right now in the worldwide supply chain. Cogs are not working in the way they were designed to, or each supply chain waypoint can’t adjust or work together in a different way to achieve the result.

Leaders need to seek out different opportunities to adjust and flex processes and operations in their supply chains. In fact, radically different because of all the things that will drive competitive advantage for companies. The idea of an intelligent supply chain where every part is connected might be the most powerful thing you can do for your company. Look at Tesla’s likely results in the next quarter. They are selling and delivering more cars than this time last year, (64% more production compared to the same time the previous year). They are cracking supply chain issues; others are struggling.

The promise of technology has always been to make humanity better. Putting Ashton Tats, Db IV, PointCast, Microsoft’s Zune, the Real media player, and Sony’s Betamax aside, it has generally done incredible things from dialysis machines to organ printing, cloning, and millions, tens of millions of new experiences and ideas. Imagine a connected supply chain that is intelligent from the moment material is bought or even grown to the moment it lands on a plate, a dog bowl, or in the case of tennis balls, in your racket bag. All connected, all the time adjusting, recalibrating knowledge transparently through the whole ecosystem

As we live more and more on “the edge” and as products are increasingly made and shipped by autonomous devices as AI and machine learning come into play, one of the very first places it needs to go is in the supply chain industry. We need to stop doing things incrementally better; we must turn this into an organic living process where every cog is connected, adjustable, and working at near latency-free time. That’s the supply chain we need to aim for, not one that leaves shelves bare in low-income areas or sixty-five container ships waiting outside Los Angeles. Imagine being able to bring all that intelligence together in one connected ecosystem? Somebody needs to do it; we will all benefit from it, no matter who we are or where we might live.