Christopher Mims writes Keywords, a weekly technology column, for the Wall Street Journal, and is the author of Arriving Today, a new book about supply chains. In the fourth episode of the NEXT – SHOW series 4, he explored how supply chains work, how they’re changing — and what that means for the future of business.

---

Watch the complete episode

---

We’ve all become very familiar with supply chains over the last couple of years, as the pandemic disrupted them globally. But Christopher Mims was ahead of the curve. He started working on his bout about them before the pandemic. And what drew his attention to them?

“Strangely enough,” he said. “It was robots.”

Mims visited an automated Ocado grocery delivery warehouse near London. It deeply impressed him that dozens of robots kept it running – and only one person. This was the most automated facility he’d very been in. It felt like the intersection of so many technology and economic trends that he just had to write about it.

Supply chain remains an incredibly labour-intensive industry, but is also becoming technology and robotics intensive, too. “In few other place sin the human endeavour do we have this complete marriage of human and machine,” he said. They’re in dialogue, with each changing the other – to deliver the goods we want and need every day.

The hidden supply chains

Most people are unaware of the companies in the space, and even that trucking itself is an incredibly technologically intensive industry in its current form, and the emergence of self-driving trucks will only accelerate that.

And this was all before the pandemic.

Mims was in Vietnam. He was watching an object — a phone charger — the shippers loaded it into a container and put on a ship. Mims’ plan was to trace its journey to the US. He started getting texts about “what was happening in China”, and if it impacted him. The ship he was watching was also full of goods like PPE that would be the target of panic buying within weeks in the US.

“It completely blew up the story,” he says. “It was good for me as a reporter.”

If you can’t flex, you break

Mims was in facilities towards the end of the supply chain during the early months of the pandemic, wearing a mask, surrounded by people in masks, but all working with a sudden sense of urgency. And the book itself suddenly felt more important. The pandemic stretched supply chains beyond their capacity – and some even broke down. It’s not a system that can flex quickly.

“You cannot suddenly add dozens more container ships. You cannot suddenly double port capacity. That takes $10bn and 20 years.”

And so, when people went on a buying spree two months into the pandemic, things were stretched to the limited and there were things people simply couldn’t get, from toilet paper to laptops. Even now, years in, we’re short of lumber for construction and microchips, which has shut down car manufacturing all over the world.

Ports shut down because of Covid-19, sailors found themselves trapped on ships for months beyond the end of their contracts because they weren’t allowed to leave them.

The most critical supply chain is at risk

“Food is an acute challenge for many reasons, including drought and climate change,” he said. “You see this particularly in places where a lot of food is imported, like the UK. In Asia, there have been problems getting enough soy beans into counties, because of a shortage of shipping containers.

“These are things we don’t think about when supply chains are operating smoothly, but as soon as they get tangled up, it can start to feel like an existential threat.”

Food supply chains are often far more complex than people realise. Fishermen catch cod off the coast of Scotland. It is then flash frozen and shipped to China to be filleted, and then shipped back to Scotland to become fish & chips. Why? It’s cheaper!

Rethinking our business models

“Driverless truck will be one of the biggest changes, but so will new business models,” he says. “New business models and culture change can be a new form of technology, I always think. Amazon figured out how to combine AI and robotics to get you any of 15 million items tomorrow, and that’s both a business model and a technological innovation.”

These shifts have facilitated the rise of “instant needs” startups, that aim to get goods to you within 30 minutes, not a couple of days. Sometimes it’s just a case of smart application of existing technology, combined with a new business model, and figuring out where to position those local warehouses to make it work.

Drone delivery? It might work in some places, but is likely to be of limited use for a while. Purpose-built autonomous transport for delivering is promising in the short term. “You can deliver a takeout meal with a small, six-wheeled robot. There’s a Cambrian explosion of ways of automating the delivery process – but a lot of it is hidden.”

Towards sustainable supply chains

But should we be heading in the direction of ever-greater convenience? Is it sustainable?

Mims suggests that the arc of technology over the last decade, from social media, to these convenience-based startups, is trending towards addicting experiences.

“These devices we carry around with us are designed to tap into our very primate instinct towards instant gratification. They’re designed to keep up clicking and shopping. It took us 50 years to figure out what was good and bad about television, and phones have only been around for 15.”

The future of supply chains

“Our consumption may be reduced, and I would like to see that happen, but the reason it will happen is not because people decide to do it. Instead, it will be because global supply chains, as they exist now, will be environmentally and economically unsustainable,” he says. “We underestimate at our peril the extent to which prices are rising now because of these challenges. As local alternatives become relatively more affordable, as it makes sense to bring manufacturing back, prices will go up and people will consume less as a result.”

And yes, climate change is a factor. We’re starting to run up against several planetary boundaries that will limit our consumption, he points out. Business will need to start planning for a world where consumption doesn’t just keep growing.

“And it’s also a huge opportunity. Elon Musk is the richest person on the planet in part because he bet early on electric vehicles,” he says. “There are tonnes of opportunities for other businesses to say that this is the way things going, and build businesses around that.”

---

This is a summary of an interview with Christopher Mims conducted by David Mattin and broadcast on the NEXT Show on 14th July 2022. You can catch up with Christopher and his work on the WSJ, LinkedIn and Twitter. Or, you could buy his book.