WAGON TRAINS AND SUPPLY CHAINS
How America’s supply chains have changed over time! Sometimes, for the worse!
When the 2020 COVID pandemic turned off the lights in all of New York City’s Broadway theatres, our dancer grandson was just about to make his debut in a revival of the popular 1957 Meredith Wilson musical “The Music Man.” It would be nearly eighteen months before the musical’s opening, and my wife and I could watch him perform.
In addition to its signature number, “76 Trombones,” several of the musical’s melodies now randomly pop into my head, and I’ll find myself starting to hum them. The other day the tune that emerged in my consciousness was, “The Wells Fargo Wagon’s Comin’ Down the Street.” But this time there was a reason; I was prompted by “supply chain disruptions” I’d been reading about in the media and had recently experienced firsthand.
To refresh the reader, the “Wells Fargo Wagon …” tune comes at the end of the musical’s first act and is performed by a chorus of children and adults in their fictitious 1912 town of River City, Iowa. They are all excited over the anticipated arrival of the Wells Fargo wagon containing, they hope, deliveries from distant suppliers, friends or family members. The enthusiasm with which the cast sings the lines conveys the excitement of soon receiving a long-awaited package. Oh, how supply chains have changed over the last century! For the worse!
We’d like to believe that technological advances and modern marketing investments have improved efficiencies in moving stuff from producers to consumers. Technology and investments have made a difference, of course. Sailing ships and wagon trains are now replaced by ocean-going container cargo liners and 18-wheeler tractor-trailers delivering goods from across the seas to US maritime ports and then to regional warehouse centers for distribution to buyers. Today, after placing an order, my shipment is tracked using sophisticated computer algorithms to identify supply availabilities and local consumer demand so I don’t suffer in want of anything for very long.
Before the COVID-19 pandemic lockdown farm-to-market and manufacturer-to-consumer supply chains appeared to be working pretty well in this country. America’s just-in-time delivery network jacked up Americans’ expectations about how promptly their phone or online orders could be delivered and even where shipments were enroute to their door. I’m amazed at how promptly an online order can end up on my front porch. More recently, however, supply chain disruptions are leaving many store shelves empty and many parents wondering how they’re going to meet their families’ expectations for new clothes or video games in time for a birthday or other special event.
What had once been the excitement of anticipation a century ago, has turned into widespread sullen grumpiness today when things ordered online are delayed for days and weeks or are suddenly reported out of stock. The thrill of anticipation is gone along with the element of mystery and surprise in not knowing when a package would show up. In its place is the sense of pain and disappointment that comes when gratification is even slightly delayed.
We’re spoiled.
It’s worrisome because along with technological advances in marketing, our expectations have ratcheted up to the point that unless things go exactly the way we want and our stuff gets to us within days if not hours of placing our order, we look for someone to blame. Woe to the political party in power when supply chain disruptions set in! We consumers fume until we can take out our frustrations at election time, even though politicians may have had little or nothing to do with inventory shortages or delivery delays.
The current COVID pandemic has revealed just how vulnerable is our just-in-time American consumer lifestyle. Also revealing is how challenging it is to get our lives back on the road once an event, like a global pandemic, lands us in the ditch. There’s ample reason to believe that our quality of life has not improved all that much when we must account for the vulnerability of today’s supply chains.
Moreover, can we really claim that it is an improvement today what goes on behind the scenes in those drab warehouses where workers reportedly struggle long hours for mediocre wages to meet almost inhuman targets for moving merchandise through these incongruously named “fulfillment centers?” Compare, for example twenty-first century warehouse work drudgery to the nineteenth century freedom and excitement of driving a wagon team of powerful horses across the wide-open western prairies. The freshness of the air. The magnificent scenery. Oh sure, there were occupational hazards from marauding wannabe Butch Cassidy-style stage coach and train robbers. But both of those worries were a bit exaggerated by Hollywood movie makers. Largely, wagon trains and their cargo reached their destinations even if delivery times were long and arrival dates a bit unpredictable.
Supply chains also worked well up to a half century ago because our predecessors were willing to live with less. Not so anymore. Consumer credit and corporate investments finance expanded production lines and accumulating inventories to the point that deliveries flow almost seamlessly. Our glutenous lifestyles require it.
But how stable? How sustainable? The recent pandemic has demonstrated that clearly not as much as we’ve come to expect. More frequent and extreme weather events and disruptive global political and economic turmoil are changing that. Recurrent supply shortages and inflationary price pressures have introduced greater unpredictability into the delivery systems for goods and services we have been taking for granted.
We can benefit from preparing now for future shocks to our marketing systems and to our lifestyles. It’s something over which we will never have total control. But there’s definitely scope for improvement. And we can prepare. How? Well, we can take steps to recalibrate our lives. And not simply adjust our expectations to more realistic delivery timelines, but also ease up on our spending and consumption practices. That will tamp down supply chain pressures. Many steps we can take have a low or zero cost; others are investments for the future which we should make promptly to avoid even greater costs of inaction later. For example:
First, let’s wean ourselves from instant gratification, particularly when that gratification comes from material consumption. I suggest we start incrementally. I’m not proposing anything dramatic as, say, a crash starvation diet. That would create unwarranted hardship on all those involved in producing, shipping and marketing the goods we crave. Instead, let’s apply a more gradualist, say, 10 percent rule. As in any sustainable weight management program, small increments are better than large drastic shifts that most often are not sustainable for very long. Cutting back 10 percent on the calories we consume and increasing by 10 percent the time we spend doing exercise routines, is just more manageable and sustainable for most of us.
We can apply the same 10-percent rule in our overall consumption as well. Buy 10 percent less and allow 10 percent more time for it to arrive. Collectively, the outcome will be less pressure on product supply chains, giving businesses the buffer of somewhat smaller volume and longer delivery times to accommodate and adjust for labor and materials constraints. And that 10 percent cutback in our spending, well, that can be channeled into bulking up our savings and generating some funds for investing for retirement or unanticipated needs.
Incremental adjustments in the pace and quantity of our consumer lifestyles just might cultivate a sense of appreciation for how fortunate we are in getting what we get when we get it.
Second, learn how to make do with more of what we have. It’s perhaps telling that this double-verb phrase “make do” is a quaint expression. Perhaps that’s because we’ve become a generation of discard-and-replace consumers who have unlearned all the skills of our repair, re-use and repurpose parents and grandparents. Maybe it’s time to resurrect “make do” and restore it to a more prominent position in our daily lives.
When we hold onto stuff longer and select stuff with longer useful lives, we further relax pressures on supply chains. All it takes is a bit of investing in “fix-it” learning. I’m also advocating that firms manufacture products with greater useful lives as well as make components that consumers can repair or replace to maintain stuff to good working condition. The sibling benefit of fixing stuff is keeping it out of landfills longer. Reduced waste is not only good for a more resilient economy but also a cleaner environment.
Third, cultivate a more sharing community among ourselves. Very closely akin to making do, we have always been a nation willing to lend a helping hand whether in our local communities or in countries halfway around the globe. We lead the world in the capacity to help our citizens as well as our world neighbors cope with unforeseen natural or civil disaster. We must advocate – and be willing to pay taxes – for public programs that can move quickly to return life to normal after whatever kind of disruptions occur. Even arrangements as informal as neighbors who share their extension ladder, carpentry tools, etc. can restore a sense of community lost to the past not to mention cultivating a more cost-effective use of stuff cluttering our homes and garages.
Local government provides the framework and the sense of community to step in at times when the federal government does not have the capacity to provide sufficient and timely response - with delivering, say relief supplies and rebuilding materials - to meet our needs for full recovery following severe disruptive events. Community leaders – in both local public offices and businesses - as a rule know best where the greatest and most immediate needs are among their residents and customers. That gives communities a critical role in partnering with federal government to respond promptly and systematically to local needs following supply-chain disrupting natural disasters. Too often our American ‘rugged individualism’ has gotten in the way of recognizing that there are some things that just cannot be done alone.
Fourth, show greater respect for the service professions and tradesmen (and women). These are the people who work to repair and maintain our vehicles and appliances, and keep our homes and businesses running. The technical professions are beginning to gain greater popularity and respectability as we become aware of how critical is the dependable supply of essential services – electricity, potable water, sanitation, as well as road networks, public safety, child care. These services are all provided by people who have the same needs and wants as us. Their skills are not learned at four-year liberal arts colleges but at technical schools and in apprenticeship work. We need them. I don’t want a liberal arts major in seventeenth century English poetry trying to repair my furnace when it goes out. I want a skilled technician. We need more well-paid technical specialists to grow as a nation.
Fifth, save and invest more. As individuals and as a nation Americans stand out for our low levels of saving and investing. Look no further than the levels of household indebtedness and the decaying condition of our national infrastructure to realize that we have come to a point where we need to cut back on material spending and increase our rainy day saving. Research funded by the US Federal Reserve highlights that less than 40% of American households have enough in savings to cover the cost of a $400.00 emergency expenditure. Supply chain disruptions can lead to temporary job loss across industrial sectors and prove catastrophic for many American workers and their families.
Recovery from supply chain failures caused by, say, deteriorating transportation networks can prove many times more costly than if we invest in and budget for preventive maintenance and repair to avoid such failures. This will require money but it should be viewed as an investment in the future rather than a current budget expenditure. It won’t be cheap if it is to be done correctly. It's an intergenerational commitment as well. Just as we have benefited from the transportation networks built and paid for by past generations, we should be responsible for the costs of maintaining those infrastructure investments for future generations.
Sixth, become better risk managers. Individuals, corporations and communities should have sufficient insurance coverage for loss of property and livelihoods. These losses may result from dramatic climatic events, political disturbances or foreign conflicts that can disrupt local supply chains and even destroy the very assets - our homes and businesses - on which our livelihoods depend. We need to factor comprehensive insurance coverage into our cost of living as individuals, communities and a nation so when adversity strikes and disruptions occur, we have the capacity to cover losses and to rebuild promptly.
Seventh, support social safety net programs. Those least capable, often through no fault of their own, more often fall on hard times and have the least capacity for quick recovery. It is for the benefit of all of us that we offer a helping hand to bounce back after serious market disruptions whether from natural or man-made causes. As a country, America is good at delivering humanitarian assistance overseas when foreign populations need help getting back on their feet. Our history of supporting recovery and rebuilding dates from the Marshall Plan to restore a war-torn Europe in the mid-20th century to relief sent to nations experiencing hunger and homelessness following major floods, droughts and civil disturbances. At home we’ve also been very good at helping communities rebuild and restore the flow of goods and services following fires and floods. We need to expand and sustain that capacity to help those most adversely affected by, and least equipped to recover from, catastrophic events at home.
Eighth, learn from history. The last two centuries have been punctuated by wars and conflicts which at times must have seemed endless to those caught up in them. The end did come and rebuilding did follow even though some conflicts such as our own American Civil War seem to have a legacy of lingering pain and injustice. We need to relearn how we came together after these cathartic events ended. Almost inevitable future climate disturbances will likely have features in common with past struggles. We need to recognize that now and prepare to handle the tensions before they escalate into something more dangerous and damaging.
The list of steps we can take seems long but some of us have already begun to act. What’s now more evident from our long pandemic nightmare is that it’s past the time to act to address the increased arbitrariness of the forces of nature and other the challenges confronting the diverse society and developed economy in which we live, work and play. When we do act, we can best act together in community like the inhabitants of the fictional American mid-western town of River City, Iowa, so we all can share the joy of anticipating a brighter and more promising future. ###