Daily Archives: May 13, 2013

So, How do We Fix the Problems We Created? Part I

As per yesterday’s post, we are the biggest supply chain risk. So, how do we become the biggest supply chain solution? By fixing the problems we created. Then the risks will be minimized, and so will the disruptions. Fortunately, the solutions are easy. Unfortunately, the decisions to implement them aren’t always easy from a business, or should I say, capitalistic, point of view. In the short-term, they can be expensive even though, done right, they pay off considerably (and often in multiples) in the long-term.

Climate Change
We could build more wind farms, solar farms, and hydro power stations and greatly increase the amount of energy on the grid that come from renewable sources. And we could deal with the irregular energy production by using natural batteries such as pump storage, compressed air (in natural, deep, airtight caverns), and water (to trap heat energy). It’s a considerable amount of up-front investment, but there’s no need to be putting energy on the grid that comes from dirty coal, natural gas, or oil — especially when we still need the oil for planes, trains, freightliners, and automobiles (as battery technology is not there yet for long-distance travel).

Global Supply Chains
There’s no reason we can’t do more sourcing at home — and do it cost competitively. Given the rise in labour costs, transportation costs, and management costs associated with managing production half a world away, with the right investments in new technology and training, we could produce many of the goods just as competitively in North America. But again, this could require significant multi-million investments in new, automated, technology and training to increase the skill of the manufacturing workforce. (But if we’re as talented as we claim to be, this shouldn’t be a problem.)

Increasing Social Inequity
Rick Perry, following the sound advice of economists like Arther B. Laffer, is proposing a flat tax to be applied equally to all. While it wouldn’t fix the fact that we are allowing some people to be 1,000 times as rich (or more) than the average person, a flat 20% tax on all individuals and businesses in the U.S. would go a long way towards reducing the U.S. national debt. If this resulted in an additional 15% tax on the richest 1% who are currently keeping the majority of their wealth in tax shelters, this would allow the United States to reduce the national debt by almost 20% if all of that tax money was applied to the debt!

Gender Imbalance
Not only do we need to promote equality of women in some countries, but we need to promote equality of men in some countries — often the same countries! In some countries, like China and India, certain jobs are viewed as “women’s work” and given the gender imbalance, this is going to be a problem. Just like men can be nurses and airline stewards, they can also be garment makers and janitors.

Population Increase
We can be smart about this. And while we don’t have to go to the extreme “one child per couple” policy, there’s no reason we can’t educate people about the downsides of large families. While the planet can likely continue to support the current population for the foreseeable future, there is a tipping point, so we should do everything we can to prevent additional growth. But since the planet can likely continue to support the current population for the foreseeable future, we don’t need to panic and jump on the bandwagon that the population has to decrease. Note that, as simple math will illustrate, provided that we don’t considerably increase our expected lifespan in the near future, if, on average, we slowed population growth to an average of 1 offspring per person, or 2 kids instead of 2.5 kids in the average household in the U.S., around the globe, we could reach a steady state population very quickly and eliminate the issue of population increase.

Population Migration
Talent tends to migrate to where there is the most opportunity, and all things being equal, to where there is the most tolerance. If we focussed on increasing the acceptance of people in rural as well as urban areas, possibly through telecommuting and telepresence, we could slow down the migration from rural to urban areas and make populations more predictable.

Aging Population
When you dig in, this is another of the problems we’ve created that is hard to identify a solution for. People are getting older. That’s not going to stop. We’re going to have to accept, and prepare, for this reality.