I interviewed Matthew Weilert who discussed A Systems Thinking Perspective On The Modern Global Supply Chain.
It’s good to speak with you today, Matt, and today I’m looking forward to hearing your views on a systems thinking perspective on the modern global supply chain. Can you start by providing a brief background of yourself?
Dustin, thanks, first of all, for having me on your show. I really think that across my varied career in the defense supply chain, with automotive leadership supply chain, and in foodstuffs in the food supply chain, including cold and refrigerated, you really can distill my two decades plus of experience down to just two words. The first word is granularity. That is how deeply, how intimately you know your business. The second is like it; it’s humility. It’s part of our grandparents’ timeless wisdom that only the humble can learn.
My exposure to these different fields has pointed out the commonalities, in theme in terms of if they don’t trust you, they are not going to tell you everything that you need to know; they’re going to tell you what they think you want to hear. Certainly, in a supply chain that’s a catastrophe waiting to happen. Those two simple words—granularity and humility—are how I would describe two decades across many different facets of the global supply chain.
Can you talk about what the challenges are with the modern global supply chain?
One of the biggest things I think John Shook has made very, very plain when he wrote an exceptional commentary on NASA’s evaluation of the Toyota sudden unintended acceleration, and that was the fact that people are not asking intelligent questions related to the reality of geography. The biggest issue for offshoring isn’t the six-week delay or the 15,000 or 20,000 miles; it’s the differences in culture that aren’t being accounted for. Whether or not this was the fact that Chinese were putting poison in toothpaste or poison in dog food—unintentionally so—it’s the fact that bean counters were making decisions without asking people who those decisions affected. Probably the biggest single decision is that language and culture far more than geography.
I don’t mean just can you speak Cantonese or Mandarin. I mean, can you speak Brooklyn? Can you speak Des Plaines, Illinois? Can you speak Seattle? It’s really understanding who the people involved in your supply chain are, and that’s where we go back to the term granularity. Do you know your business at the one-to-one, person-to-person human level?
In a catastrophe, in a disaster, if you’re looking for a 20-minute response time instead of a 20-day response time, it’s going to be because you had a personal relationship with somebody who got through all the red tape and gave you the data you want. There’s an outstanding example with CSM. CSM is the world’s largest bakery conglomerate, and Dominic Welch is one of their key players, one of the titans, you would say, of the foodstuffs industry in Europe. He was able to certify that all CSM’s suppliers were dioxin-free in a scare several years ago. The reason he did that—he personally disclosed to me in a communication we had at a conference—was that he had personal relationships with his key suppliers. It wasn’t EDI; it wasn’t social media; it was the one-to-one, whether that was e-mail or phone call, but the one-to-one relationship. I may sound like a broken record, but that really is the key to solving many of today’s either existing issues or issues that are manifesting themselves as we speak. Knowing your people and knowing your business with what we call in our trade business intimacy. How much do you know, and can you shift the level of detail at which you’re working that’s appropriate for the challenge of the moment?
Can you talk with any more detail about how the challenges can be addressed?
I sure can. The biggest issue, I think, for, let’s say an automotive supplier. An automotive supplier has, let’s say, 20,000 pieces of inventory. We can have two examples. The Toyota sudden unintended acceleration disaster was more than just a supply chain issue; it was a people- to-people issue. The wreck of the Toyota, the Saylor family’s untimely demise, that tragedy, was caused by a wrong-sized car mat.
The reason that’s a supply chain issue is because they had the instructions at the point of installation. A fully integrated supply chain would go all the way from the rubber or plastics manufacturer to the final part being put in the specific model of car with the right part confirmed; whether that would be a bar code beep or whether that would be a process check is really outside of the scope of this discussion. The Saylor tragedy, the death of the Saylor family, was a supply chain issue because they had the wrong part in the wrong place at the wrong time. That’s my take on it as a systems safety engineer. It’s not just inventory levels; it’s how that inventory was distributed, parts, place, and time. Another example from a warehousing perspective again goes back to the people-to-people relationships.
General Motors, in their Reno service parts operations—this is quite some years ago—had a conveyor that was breaking down every single day at the same time. Just from that alone you know that it was not a mechanical-only issue. What happened was that the night supervisor was basically disregarding GM’s $6 billion dealer-driven-demand software and saying, “All of it ships. Nothing doesn’t ship on my watch.” He was physically overloading the weight capacity of the conveyor, and that turned out to be a human problem, not a Rapistan® brand or Dematic® brand conveyor problem. Those are two different perspectives on how a systems approach or a systems-safety or a systems-thinking approach addresses what is often a residual risk or a hidden risk within classical supply chain thought processes.
As far as results, have you seen any recipes or formulas for success?
Well, recipes for success, again, I’m going to harken back to some of the things that John Shook wrote about; just because it’s close solves many sins. That’s not really what he said; he had about three paragraphs to say that single sentence. Essentially, Warren Buffet said the same thing: Know your suppliers. Peter Lynch, way back in the day, when he was running Fidelity, he said, “Know the companies you’re working with.” And we get back to that do you know the intimate level of business operations so that you can recognize or what we would call the smell test…this isn’t ripe. Are you a mariner that knows the sea charts so well that you can tell “that island is mismarked because I’ve gone on this route fifteen times”? Or when you see two parts in combination and you know that they don’t fit, as someone with experience in Toyota automotive assembly would have recognized had the right person been at the right place at the right time.
Recipes for success are: increase communication, increase communication, and you know the third one of that. The way that communication happens is using multiple means, integrating social media, integrating instant messaging, integrating more visual communications so that people have rich media. People don’t need more software. People don’t need more meetings. God forbid we should have more meetings. What they do need is getting more information in less time. One of the recipes for doing that is learning to communicate at the right level of detail. That may not sound like supply chain advice, but when you get down to the heart of it, people need to know what they need to know when they need to know it. And with that simple-sounding advice, that’s about a six-week course in logistics when you take it out to its actual application and day-to-day implementation. I hope that kind of summarizes where I see some of the critical challenges of the way that a systems approach to communication will drive solutions in today’s supply chain.
Thanks, Matt, for sharing these great views on a systems-thinking perspective on the modern global supply chain.
I appreciate the time and I appreciate you reaching out to me, Dustin.
About Matthew Weilert
Matthew E. Weilert is a global innovator in system safety & risk with the privilege of advising billion-dollar brands including Kraft, Coca-Cola, Bacardi, GM and the US Navy. He writes for the Perspectives Newsletter, available at stipress.com
STETA Group (Board Chairman) | Publisher at STI Press