3 ms·
Basically, digital technology. We now have access to so much raw data, with such immediacy, and the capability to process it, that we can identify and work arou
by peterwwillis 6y ago
Basically, digital technology. We now have access to so much raw data, with such immediacy, and the capability to process it, that we can identify and work around problems and find more efficient solutions faster and better than ever. The main way this shows up in society is probably the maximization of profits that leads to increased wealth/prosperity. That doesn't describe who is getting that wealth of course :), but it's there. So we have a better opportunity and capability to solve problems than ever before. The trick is getting society to adopt it properly.
WRT the logistics of scaling a supply chain, we have the capability to identify supply chain inefficiencies and provide fixes. As a store sells out of toilet paper, it's possible for the store's database to be linked up to the toiler paper distribution company, so they know when a shortage is happening in real time. But how long does it take the manufacturer they buy from to spin up more TP? Too long. To fill the gap immediately, the store would need to detect that the original distributor won't be able to fulfill the projected increased capacity, and start filling orders with some other distributor somewhere else in the world to get more TP. But we also may be assuming that the whole world isn't having a shortage... if it is, is there enough cargo plane capacity to ship from these remote places? If not, more logistics is needed.
The capability to automatically perform that logistical ninjutsu at each stage of the supply chain is now easier than ever. But nobody ever programmed their systems (much less signed the right business agreements) to actually do it, because nobody really needed TP to "scale". And this is the actually hard logistics problem: it's not enough to have the capability to do something, you have to actually implement it in your system. They haven't done that, so the supply chain doesn't automatically scale.
But all of that ignores the impact of a global trade network on logistics. Assume you did this for coffee, and a shortage of beans (or price increase) from one country led you to automatically buy from another country with cheaper/more plentiful beans. The impact would be to automatically penalize one country's farmers for trade embargoes, drought, war, or some other issue. So while logistics are a very useful tool, they should be balanced against their potential side-effects if we really want to maximize their benefit on a global scale.