When I was an electrical engineer building emergency wireless communications networks, I learned about the importance of having backups—sometimes the hard way, with a 3 a.m. phone call reporting a system is down and the backup system didn’t kick in.
I also learned never to rely on a sole-source supplier, because if for some reason that company couldn't deliver, you can’t build a product or make something work if it’s broken and you don’t have the parts to fix it. Have you ever had an ingredient supplier like that? Then you know what I’m talking about.
When I was a kid, supply chains used to be simpler and shorter (most likely attributable to transportation or the lack of long-distance, timely refrigerated service). Our poultry farm was 30 miles north of Center City Philadelphia, along with numerous other local dairy/beef and hog farms, supplied produce, eggs, milk, poultry, beef and pork products to local and city markets. In fact, the town where I live (whose population was well under 5,000 at the time) had a poultry slaughterhouse and two dairy facilities—now, of course, they’re gone, and we’re part of the New York-to-Philadelphia megalopolis.
There was no internet or smartphones then. So these local food supply chains depended on hard-wired telephone connections (and later, faxes) for farmers, meat packers, wholesalers and retailers to conduct their business. If phones went out of service, your supplier or customer was often an easy drive away.
Today, refrigerated truck, rail, air and ship transportation has extended the geographical boundaries of our supply chains such that they are literally without state or country borders. With the internet and instant communications from and to anywhere in the world, supply chains have grown more complex and more dependent upon technology. On the East Coast, you can get your grass-fed steak from the West Coast and get it on the same day—or an Apple technology product can be drop-shipped from the manufacturer’s stock in China when it’s not available here.
Eggs in one basket
What does this have to do with COVID-19, sole source suppliers, the internet and supply chains? First, COVID-19 has served as a good stress test for our food and beverage supply chains. When a number of employees are out sick at either at a slaughter plant or a further processing site, the facility grinds to a halt, and the facility is incapable of accepting input from its suppliers; therefore, nothing goes out the door.
Likewise, with everyone home, “eating in” and ordering online, another unanticipated blip occurred in our national supply chains. Food service and closed restaurants were no longer ordering products, but retail couldn’t get enough products from its suppliers to meet the increased demand. Why? Either products were not available or in the wrong place (warehouse)—in spite of the instant communications we have today.
Second, whether or not you agree with the ethical/ecological impact of mega-scale animal farms and slaughterhouses, you nevertheless have to ask, does this system work when there is a break in the supply chain—due to COVID-19, extreme weather, terrorism or internet/utility outages? Is the current system resilient or is it fragile? Could smaller, distributed, and more regional supply chains help?
Has the current supply chain become too complex to work efficiently? In a Webinar, Willy Shih, Harvard Business School Professor, suggested it took COVID-19 to reveal some of this complexity, and offered several practical suggestions toward making some repairs to our food supply chain.
A more scary thought comes from another webinar I watched, one questioning our ability to be ready for a major utility outage where everything fails—because the electrical power grid has become incapacitated. Without power, there is no internet, phone, city water and sewage, refrigeration systems—anything else that depends on electricity.
What are potential causes of power grid failure? Solar storms, local utility interruption causing a domino effect that causes a major regional blackout, terrorism/cyberattacks or even a war—where an adversary detonates an atomic weapon well above our atmosphere, causing an electromagnetic pulse (EMP) capable of shutting down the power grid and frying the microprocessors in every piece of electronic equipment we use—including phones, computers, cars, trucks, aircraft, trains, ships and any IIoT/IoT connected device. While everyone on the ground survives, and there is no radiation poisoning, we are plunged back to an 18th century lifestyle—only without 18th century “technology”—horses, wagons, aqueducts, etc.
Life without the internet
While hopefully we will not be victims of an EMP, state actors and criminals constantly attempt to shut down the U.S. internet and power grids. Though TCP/IP was cleverly designed to be self-healing and re-routing when communications paths/circuits fail, key router failures due to malicious actors could still bring down major portions of the internet until they are bought back online. Regional outages have already occurred.
Today, we depend on the internet as a sole-source supplier for our communications—doesn’t matter whether you use Verizon, Comcast, or some other provider. At the same time, as I already said, there are malevolent actors working to shut it down using whatever method works. We’ve already seen what has happened with partial internet outages: banking system failures, news sites down, popular mail-order/commerce sites not working, governmental sites out of service, and the list goes on.
It’s probably not a matter of “if” the internet goes down, but when. Are we prepared? How well will your supply chain function without the internet? What about your cloud-based process control system? Since the internet powers so many of our phone systems (VOIP), you have to ask if we are prepared for phone outages? While your fiber optic cable may be physically working, without connection to the internet via your carrier’s gateway, you’re dead in the water.
I don’t mean to be an alarmist. We were supposedly prepared for a pandemic, but then we were unprepared in ways we didn’t consider. While we have both government and private corporations working together around the clock to keep the internet up and running, are we really prepared for a long-term, potentially country- or world-wide outage?