Many years ago, on a chilly Jersey-shore-Saturday morning, my son and I made our weekly pilgrimage to that orange and brown shrine of caffeine and carbs, Dunkin' Donuts. Is there anything more American than Dunkin’ Donuts? Perhaps not. America indeed does
run on Dunkin’
as any trip from almost any town to any airport for the first flight out, will show. On this particular morning, after ordering and consuming our glazed triumphs of mass-market baking, my son asked a shocking but thought
provoking question. “Hey Dad – what if Dunkin’ Donuts ran out of donuts?”. Hmm.. clearly a trick question. Since alighting on these shores (just south of Plymouth Rock at Newark Airport in 1984), I had never experienced such a donut outage. A quick Google check revealed that in fact such an outage has not occurred in recorded history.
Seriously though, it is quite impressive how, even in today’s. environment of supply chain stress, each Dunkin' location manages to serve up decent, freshly baked food and coffee at thousands of locations and the look and feel and taste is identical. And they never run out. Think of the thousands of suppliers and millions of workers doing their thing at the appointed time and place just to make sure your coffee is passed through the drive-through window just-so. And do you know what else? No one is in charge of the whole system. Thousands of voluntary contracts between independent entities, from the franchise owners to the guys that grow the raisins that go into those bran muffins, ensure that customers are never disappointed.
Look around and you will see hundreds of other similar examples. American life in general (and to be fair, life in many other countries) is fundamentally miraculous, and it’s due in large part to the supply chain. Take something as simple as your morning shower. Leave aside for the moment the miracle of hot water coming out of the wall on demand, and consider the humble bottle of shampoo. The main ingredient in that bottle, after the water, is the detergent surfactant, most likely an alcohol based anionic. The life of that surfactant
started on the other side of the world in a Southeast Asian palm plantation (an RSPO certified one, our readers hope).
From the picking, by hand, of the palm fruit in that plantation to your shower, where the surfactant enjoys 30 seconds on your head before being flushed down the drain, the supply chain involves:
8 manufacturing processes, 4 chemical transformations 8 trucks 5 fork-lift trucks 2 trains 1 boat and 1 car. It further involves thousands of farmers, chemical plant operators, manufacturing personnel, truck drivers, train engineers, sailors, warehouse operators and retail staff. The chain ends with you, when bring the bottle home from the supermarket or pharmacy. And again, no one is in charge. Now, that example was just for the surfactant in the shampoo. The ten or so other key ingredients have a similar story. And then there is the fragrance. That has 50 ingredients, each of which has its own story. Incredible, right?
So there is a moral to this story, of course. Supply chains are beautifully complex and have independently evolved. Mess with them at your peril. When we hear about the need to restructure supply chains for key technology or pharmaceutical products, for example, do not underestimate how difficult that can be. Such a restructuring may indeed be necessary, and may well happen. When it does, as a customer in that chain, you really need to know where things come from and where they go. If you bought a key ingredient from China, and it now comes from New Jersey, there is more to consider and monitor. You better make sure that the Jersey-made product itself does not have an even dodgier supply chain than the one it replaced. Provenance (where stuff comes from) and stewardship (how it gets here from there) are not just buzzwords. Take them seriously when thinking about your sources of supply. If it helps, when the topic of supply chain comes up at your next management meeting, think donuts.
As recently analyzed by Martin Herrington of IP Specialities.