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Fear the Unexpected for Which One Has Refused to Prepare

Ellen Mary Challans, better known by her pen name Mary Renault, was attributed with saying, “There is only one kind of shock worse than the totally unexpected: the expected for which one has refused to prepare.” The early years of the second decade of the 21st millennium have been scarred by the consequences of willful negligence cascading throughout the world due to the inconvenience of nonchalantly ignoring unexpected inevitabilities.

The world governments responses to the SARS-COV-2 virus and its respective disease, COVID-19, for a brief time paused the world’s economies, and the world is still feeling that effect with little recovery on the horizon. Yet many of the problems of which the world’s large and small companies have struggled against are, as Mary Renault so aptly stated, the product of the expected for which they refused to prepare.

Just-in-time (JIT) manufacturing, a Japanese management philosophy, was a natural result of Japanese post-World War II reconstruction. The combined efforts of Japan and the U.S. to rebuild the country as quickly as possible created a sense of urgency. They urgently needed to find a path to overcome a lack of land space, catastrophic destruction, and a shortage of natural resources. Given the defeat in World War II, Japan also had a stifling and prohibitive limitation of cash flow. Over the next 30 years, Japan and, in particular, the Toyota corporation, pioneered and perfected the JIT supply and manufacturing approach. By the 1980s, it had become widely adopted by the U.S. and other Western nations. A simple way to describe JIT is as a production method where manufacturing resources are created to meet the demand as needed, as opposed to stockpiling large supplies of manufacturing resources in surplus or in advance of the need. This greatly reduced the expense associated with the short-term manufacturing process, and companies were drawn to the JIT method due to its positive impact on the companies’ quarterly bottom lines.


In early 2020, the world experienced a simultaneous surge in demand for microchips in every electronic device, from toys to luxury cars, which occurred concurrently with increasing demand from data centers. The introduction of the COVID-19 crisis into the world economy amplified the fragility of most of the global supply chains. These unprecedented circumstances created a perfect storm of problems for companies worldwide. Deloitte reported in early 2021 that personal computer sales rose by more than 50% year-over-year due to the pandemic, and concurrently during this time, microchip purchases soared 30% due to demand from cloud computing data centers (   insights/industry/technology/technology-media-and-telecompredictions/2022/semiconductor-chip-shortage.html). However, as demand surged, Taiwan and South Korea were shutting down chip manufacturing facilities. Deloitte reported that as of 2020, Taiwan and South Korea provided 81% of the world’s semiconductor contract manufacturing. The perfect storm of problems had erupted with the ferocity of Vesuvius on an unsuspecting Pompeii. World-economy-wide, companies refused to prepare for the inevitable collapse of monopolized fragile supply chains similarly to the way the citizens of that doomed Roman city had ignored the earthquakes and small eruptions in the years prior to 79 BCE.

By September of 2021, CNBC reported that the chip shortage was expected to cost the auto industry $20 billion in revenue in 2021. Anecdotally, one of the co-authors of this article had ordered a new, fully loaded Chevy Tahoe in September 2021 to be paid with 100% cash. Eventually, that vehicle was delivered in June of 2022 but still had missing components because certain microchips were unavailable. The impact of the chip shortage affected many other industries and products as well. The money saved, having embraced the JIT approach by the auto industry, was a small fraction of the inevitable cost. Imagine having a database administrator (DBA) who never prepared for the eventuality of a disk failure. In the case of the DBA, that employee would receive a pink slip and be escorted out the door. However, in some cases, the senior management in certain industries who made decisions based on the JIT approach and consequently refused to prepare for the unexpected, due to inevitable supply chain failures, experienced a windfall resulting in huge paydays; the stock price increased because of extra, albeit short-term, profits from skyrocketing revenues due to constricted supply. These are strange days we live in!


The recent baby formula shortage initially was caused by COVID-19 supply chain issues but was worsened by labor shortages also caused by the pandemic, or at least the government’s response to the pandemic. At one point, the Abbott’s Sturgis plant that produced nearly 40% of all the U.S. baby formula supply was shut down a second time due to a storm that produced high winds, hail, and power outages and caused flood damage to the plant. The exposure of the fragility of the supply chains throughout the economy had become obvious to even a high school economics student. Given the importance of baby formula, the company should have ensured that this and their other critical products were protected by redundant supply chains. Supply chains for critical products must always be robust and have diversified geographical manufacturing locations. A DBA who never prepares for an outage would be shown the door. The recent shortage in baby formula is another example of short-term thinking where the senior management team reaped huge rewards by refusing to prepare for the unexpected. Yet should any of these issues actually be considered “unexpected?” A storm shutting down operations? An inspection finding unsanitary conditions? A disruption in supply chain? A labor shortage? Has Abbot never experienced a labor strike? The difference is there would be outrage in the press. How dare these workers go on strike? The same senior managers who focused on short-term profits, without planning for redundancy, were welcoming the consequences of the “unexpected.” These organizations should be held to the same level of care that IT has been expected to provide for production systems for decades.


Another example is the panacea of climate change. With climate change, whatever its root causes, comes disruptions of expected weather, drought, flood, temperature, fire, and seasonal conditions. All these consequences must be expected.

With natural disasters come supply chain issues, labor shortages, power outages, and many other effects. Perhaps organizations should build redundancy into their supply chains, the same way we expect our DBAs to build redundancy into our production systems. Abbot should be held accountable to build a second factory geographically dispersed from the Sturgis plant. Or better yet, maybe the percentage of control over of any particular industry that produces critical products should be minimized to optimize for that required redundancy. In the same way modern data centers are geographically dispersed, all critical supply chains need to be evaluated and have redundancy built into them.

Even today, post-pandemic, hospitals are dealing with shortages in medical supplies and medicines. There is value in a well-conceived and highly efficient global supply chain, but there is also a huge risk when the inevitable disruption to any supply chain occurs—whether it be due to political instability or weather-related. And those disruptions could be long-term or permanent. With the new CHIPS and Science Act requiring that more semiconductor chips are built in North America, there is some hope that these vulnerabilities are being addressed. For medicines and other critical medical supplies, we need to mandate by law that 30% or more must be sourced in the U.S. and a few trusted neighbors. In the case of the food supply, it is not in the country’s best interest to have a large percentage of our critical food supply being handled and processed by a small number of companies with a small number of plants. Just as we should expect Abbot to build another plant to produce the necessary volume of baby formula, we should mandate by law that meat processing be fully and effectively distributed. We should expect that redundancy in our medicines, in terms of sourcing and geographical manufacturing, be highly diversified. A certain percentage needs to be sourced in the U.S.: That way when the next hurricane blows on shore, or the political instability of a certain country explodes, we are not surprised to find out that we cannot get the medicine we need to sustain people’s lives.

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