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What Does The Ever Given Episode Teach Us?

 Many have focused on the Ever Given episode as a symbol for the dangers of international shipping.  Some have discussed it in terms of "choke points" such as the Suez Canal where when one thing goes wrong entire supply chains are disrupted.  And, some have taken it as an opportunity to discuss the topic of the size of the ships.  Have ships become too big?  What happens when there is a problem with a 20K TEU ship?

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All of these are very important questions and are being addressed however I believe the question is even bigger.  It is about how we structure our supply chains.  It is about the age old debate of efficiency v. resilience.  Basically, how much insurance are you willing to buy to mitigate the potential of disruption? 

Start with inventory.  What is inventory?  As I have discussed previously, inventory is merely a buffer of product to substitute for the lack of perfect information. In fact, Lean teachings tell us that inventory is considered waste.  What do good managers do with waste?  They try and eliminate it.  

So, as we have done over the years companies have fallen in love with the idea of eliminating inventory because it makes the balance sheet look amazing.  But, is inventory really waste?

I submit that inventory is not waste just like your fire and auto insurance is not waste.  Think of your insurance policies.  You may pay a couple hundred dollars a month for a product you hope you will never use!  Wouldn't you consider that waste?  Well, not if you are protecting your portfolio you wouldn't.  

So, now, let's go back to the Ever Given.  The lesson here is we need more insurance (read: resilience) in global supply chains.  If we have learned anything in the last year we have learned things will go wrong.  Buffer stocks help mitigate this.  

The next question is whether we will learn that lesson from this incident.  My answer is, I doubt it.  Efficiency drives short term results and effectiveness is for the long term.  Most businesses will not be able to resist the allure of the efficient.  Even if in the short term they sacrifice efficiency for effectiveness most will eventually look for efficiency.  Not only are businesses likely to do it on their own but Wall Street will demand it for the publicly traded companies.  Another reason private companies will always have an advantage. 

What can a supply chain manager do?  Well, first, we can strike from our "lists of wastes" the word inventory.  Inventory, as I have hypothesized above, is not waste, it is insurance.  Second, become a story teller.  Supply chains in the age of COVID and Ever Given should be remembered for what they have become - stretched to the limit.  The mantra of "Never Forget" comes to mind. 

If you have doubt of my position look at my favorite graph (posted here for years) measuring, for the United States, our sales to inventory ratio:

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Notice the far right of this graph.  Here you will see our inventories in the US relative to our sales is at the lowest point since April of 2012.  This is what leads us, as consumers, to scramble for everything.  

Let's not make it so every generation has to learn the same lesson.  Let's build resilient supply chains.  



Awesome Project: WHIN Food Council

New York City resident Danielle Bagley absolutely loves living in the neighborhood of Washington Heights and Inwood (WHIN) in Uptown Manhattan. “I like to describe it as ‘lively,’” she says, and that’s why she feels connected to it. “You always have folks out on the sidewalk, chatting or listening to music; in the summertime, people … Continue reading Awesome Project: WHIN Food Council

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Awesome Project: Easy Activism, Fundraising for Black Mental Health

New York City resident Dominique recalls the early days after George Floyd’s murder in May 2020, when she and her friends Hannah and Stephanie were looking for ways to help the Black community. Like much of the nation, they were grappling with feelings of anger, sadness, and frustration that arose in response to the murder … Continue reading Awesome Project: Easy Activism, Fundraising for Black Mental Health

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Awesome Project: Service Workers’ Coalition: Grocery Stipends

From serving up hot meals to writing cookbooks and everything in between, Brooklyn resident AD knows the ins and outs of their local restaurant community. As a former barista, bartender, and server, and a current activist and hospitality consultant, their roots run deep in the industry. “I’m pretty entrenched in the restaurant community here in … Continue reading Awesome Project: Service Workers’ Coalition: Grocery Stipends

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5 ideas to get involved in local elections and boost civic engagement

As we edge closer and closer to Election Day on November 3, folks across the country are heading out to the polls to cast their votes and let their voices be heard. And although there are many things about this election that make it different from those of years past, one thing remains the same: … Continue reading 5 ideas to get involved in local elections and boost civic engagement

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9 Pleasanton CA Restaurants Donating Part of Sales to Educational Foundation – Press Release

The community is invited to order between October 9 and 17 to support both kids’ education and local restaurants PLEASANTON, CA: How’s this sound: taking an entire week off of cooking, enjoying delicious restaurant meals, and strengthening the community at the same time.    It’s possible, thanks to a group of 9 restaurants in Pleasanton, […]

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GroupRaise Testimonials – Fundraising in the Summer of COVID-19

Looking back on the summer of 2020, it’s inspiring to see the many fundraising groups across the country who rose to the challenge of raising money during a pandemic – and succeeded!   Nonprofit orgs, community clubs, sports teams, scouts, and more found restaurant takeout fundraisers to be a creative solution to the limitations of […]

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A Family of Fighters: Meet Brother of Sonic Fox and Las Vegas Local, Kristian ‘Mr.Kwiggle’ McLean

Dominique “SonicFox” McLean is arguably the greatest fighting game player this generation and undoubtedly the best Netherrealm Studios player ever. In addition to that he is considered the... Continue reading

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Demo offers insight into The Medieval Psychologist

Full version of hand-drawn character-driven adventure with light RPG elements to arrive on PC in spring 2023.

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