Butterfly Effect of Logistics Snafus
My niece is getting married this August. As keeper of the family heirlooms, I asked her if she would like to wear her grandmother’s wedding gown (a magnificent satin and lace confection bespoke in the late 1940s). She declined saying she has ordered her dress “from overseas and it will be here in a couple of months.” My heart sank. Not because she declined to wear my mother’s dress, but because she is blissfully unaware of the current delays in shipments from overseas. Delays that may affect delivery of her dress.
In 1961 mathematician and meteorologist Edward Lorenz posed a question: “Does the flap of a butterfly’s wings in Brazil set off a tornado in Texas?” The concept became known as the butterfly effect. The purpose of Lorenz’s question was to illustrate the idea that some complex dynamical systems exhibit unpredictable behaviors such that small variances in the initial conditions could have profound and widely divergent effects on the system’s outcomes. Because of the sensitivity of these systems, outcomes are unpredictable. This idea became the basis for a branch of mathematics known as chaos theory, which has been applied in countless scenarios since its introduction.
We live in a world with an extremely complex and integrated global supply chain. Anyone who has been involved with just-in-time procurement understands all too well the adverse impact that even the tiniest delay can have on the completion of a project.
The emergence of the Covid-19 virus and its subsequent impact on global trade could be considered an example of the butterfly effect. A pathogen believed to be from a breed of horseshoe bat in China crossed the species barrier infecting humans with a hitherto unknown but extremely virulent and deadly virus. The world economy was suddenly severely hampered by the ensuing pandemic, which forced quarantining of people and the shutdown of factories and transportation worldwide. At ports, vessel dockings were curtailed, vessels that were docked sat unloaded for lack of personnel and transport out of the ports, and store shelves sat empty for lack of supply.
But people stuck at home needed something to do, so they discovered the joys of shopping online. As demand for goods increased, so did factory openings, in China at least. But the delays of unloading and transport from the ports remained, causing huge bottlenecks of vessels. A container shortage further impacted exports of U.S. goods as containers arriving at U.S. West Coast ports are being unloaded and shipped back to Asia empty to save time. This container deadheading has increased the cost of container shipments as ship owners seek to recoup monies lost on shipping the empty containers. Booking times have also increased.
We are witnessing the butterfly effect of chaos theory in action. And my niece may need to wear my mother’s wedding gown after all – which would have pleased my mother very much.
Margaret J. Vaughan has more than 30 years’ experience in all facets of supply chain management.
Image credit: Shutterstock
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