How the Coronavirus is underscoring the relevance of Global Supply Chain throughput: From the front lines of Yokohama, Milan, and Southern Florida
Perhaps nothing is more on the top of people’s minds these days than the coronavirus. Regardless of the primary language of the city the ThroughPut team finds itself in, the universal translation and urgent understanding of the word “coronavirus” is simply coronavirus. Urgency truly transcends language and borders.
There isn’t a television channel that isn’t covering its spread from Wuhan to Yokohama, and the extraordinary measures going on in Milan, where I have been most recently. Many perspectives are being shared from medical experts, to Fortune 500 CEOs, to Leaders of numerous Countries. Some are concerned about a pandemic, others about the deceleration of the global supply chain and its effect on their bottom lines, and yet others about their employees, customers and families.
At ThroughPut, we are coincidentally at the front lines of this global disruption. Actually, we predicted it. My first professional email of 2020 was sent to Salesforce CEO, Marc Benioff, where I highlighted that managing throughput would be the problem of this decade that humanity would have to solve, and pushing more sales was going to become secondary. A few weeks after my contact with a Samoan leader who explained how medication throughput was a problem with the measles outbreak, I posted on LinkedIn about how turning a blind eye to epidemics and following an isolationist policy against our fellow human beings would only hurt when it impacted corporate industrial supply chains.
Last week, I couldn’t find some backup facial masks in all of southern Florida. It felt like Black Friday, with one Walgreens receptionist telling me that the last time a shipment came in was several weeks back.
And now, here in central Milan, where a recent coronavirus cluster emerged just a week ago, supermarket shelves are already bone-dry empty, as they now are in southern Silicon Valley, at Trader Joes, CostCo and Target for certain wares, as one case of the Coronavirus cases reported over the weekend has expanded to a handful.
In Milan, often the first question people ask is, “Why is ThroughPut here right now?” Logic would say that a visible American tech startup should be staying put in Silicon Valley, cancelling all international commitments with Italy, Japan and other international contacts, and waiting to let the coronavirus situation play-out. Perhaps even more-so true as our team back in Palo Alto prepares to welcome 25 Chairmen, CEOs and Senior Executives from European Aerospace and Aviation leaders here in Silicon Valley this week.
Make no mistake, coronavirus is a real threat, as are many other illnesses, especially on the elderly and those with compromised immune systems. However, this is also the opportunity of making a real difference and being involved at the front lines of infectious diseases simultaneously, which was my original goal out of high school years ago. Talk to any biology teacher or biotechnology advisor from my past, and they would attest that being an infectious diseases scientist and working on cures for diseases like the coronavirus was my original dream. In fact, I spent an extra year in college at the University of Pennsylvania just to get the exposure of real biotechnology research, after I wrapped up my Chemical Biomolecular Engineering degree with a minor in Pharmaceutics & Biotechnology, exactly for infections like the coronavirus.
Somehow, though, even with two parents in the medical field, the Oil & Gas industry recruited me first, and I ended up becoming a field operations engineer working across onshore, offshore, and warzone logistics & chemical manufacturing operations. This role became the foundation of my real-world supply chain background, where I eventually became specialized in high-risk operations. The upside for a young graduate, however, being that the work we did in the field, was truly pioneering. And now, the biotech and supply chain paths have finally converged in my life after a decade, and the dots have all connected. So the real question should be: “Where else should the ThroughPut team be, if not at the center of supply chain & a pandemic right now?” At least that’s how I see it.
We are a mobile, global society now, and we literally must “move” to exist during these times. Without consumer spending, which are all enabled by logistics, manufacturing, and retail operations, America’s macroeconomic model would go belly-up. However, whether it’s Yokohama, Miami, or Milan, I have noticed one common phenomenon: even though people are slowing-down and minimizing travel, they are not shutting-down and locking themselves at home completely.
Of course not. It’s not human nature to be comfortable “locked up in a cage”. At scale, it is why people retaliate against leaders and governments to gain certain freedoms. In today’s world, people value their time more than anything. I cannot tell you how many “my time is valuable” pitches I have sat through with potential hires and contractors. The mindset that time is scarce requires too much of a mindset shift to go on lockdown. Similar to when doctors advise their patients to layoff the cigarettes, alcohol, and meat, people persist anyways knowing the inherent risks.
I think that’s exactly the point of why we are still attending expositions in Yokohama, running deployments in Milan, and visiting investors in Florida. Yes, nothing obligates us to do so, except for our vision of the world and our mission to impact end-to-end supply chains to transform modern capitalism. After all, nobody’s business card is printed with a disclaimer that reads, “as long as your supply chain is not impacted by coronavirus, we’re game”.
Being a Silicon Valley startup with a global footprint, there are two continuous realities that ThroughPut addresses that no other startup must face head-on: Operational Risks & Bottlenecks. There are plenty of risks one takes that can lead to the unforeseeable. However, taking an isolationist policy and letting things “play out” signals that we, as ThroughPut, are ok to abandon other people to save ourselves. For a company that claims to solve bottlenecks, we can’t turn a blind eye towards the ultimate bottleneck that has become a global “cognitive constraint” for the operations of humanity. This is the current, most fundamental fear that must be overcome now to help humanity and further our own vision of the world. The decision not to abandon people is the exact reason why I left my corporate role in Oil & Gas five years ago, and now much further down the road, when I am in control of the decision as the CEO of ThroughPut, there is no excuse to make the same decision.
Coming back to the supply chain side of things, these are testing times for many professionals and people. Since none of us know when, where and how this coronavirus situation is going to plateau, I wanted to take the time to share some of the positive things I have seen first-hand from operational leaders in the impacted zones of Yokohama, Southern Florida, and Milan. I believe it is important to share how even in the most testing times, operations professionals are still doing their part to enable progress and prosperity for humanity, while medical professionals are being relied upon to find solutions, since constricting the flow, is obviously not the solution.
I’ll start with Japan.
It was only days after my Pittsburgh trip in January, that one of our Japanese partners asked us if we could visit Japan to be part of their Smart EXPO booth to launch our latest version of ELI. Sitting with Board Members and Investors in New York City, I had just seen the first news about the Yokohama ship. While there were other volunteers from the team ready to go, I anticipated that this would be a technical, sales, and business-related trip with senior executives. Thus, considering I missed the last Japan trip to speak at an Operations panel in Silicon Valley covering how AI would help sub-optimal supply chains, I realized it was the right moment for me to visit Japan again.
So I took a red-eye flight from New York City to Tokyo. Even in the departure line in New York, I could see fellow passengers putting their face masks on for the flight. At JFK, almost every departure flight to mainland China was cancelled.
Monday morning in Tokyo was eye-opening. Almost everyone was wearing a facial mask. Regardless of the coronavirus scare, Tokyo subways were still full, offices at Toranomon Hills were still operating, and I made it down to Yokohama for my multiple meetings. During the meeting, my attention was on the cruise ship not too far from me in the bay, and how the infected were being treated there.
While Japan is not nearly at the same operational level right now, back then it still was largely unaffected.
From Wednesday to Friday, the Smart EXPO still took place, with professionals still taking appropriate safety measures, wearing face masks, gloves, etc. While the attendance was not as nearly as high as would normally be expected, with many citing the missing piece being Chinese buyers and vendors, many people still participated. ThroughPut continued to have strong requests for more in-person meetings the following day. Even through this scare, it was admirable to see professionals in Japan willing to continue work for the benefit of their companies, their leaders, their people, and themselves, let alone promote futuristic technologies that may not yet have widespread adoption in the market. Only weeks before, when I was severely disappointed with the integrity demonstrated by two of Japan’s most prominent business organizations towards ThroughPut, I had my faith renewed with the people who were truly the “boots on the ground”, getting the work done in Japan, despite the growing waves of hysteria on the airwaves.
With one eye on the Tokyo Olympics, Japan may have one of the most challenging decisions globally at hand and fundamentally it will involve supply chain operations: should Japan plan to have enough available resources to sustain Japan first, in the case that the world community isolates Japan, or should Japan continue to plan for resources as if the Tokyo Olympics will still happen, with people from around the world arriving in just a few months? It’s a huge decision that Prime Minister Shinzo Abe currently has to get right, as the Olympics is the global litmus test for our ability to control potential epidemics and pandemics, such as the growing coronavirus situation, and prevent global panic at the economic and social level. One of the major factors will be how he assesses Japan’s supply chain & operations situation. I hope he bases it on data, and not only the media talking-heads. His pending decision to cancel or not could be one of the main signals and triggers of a potential global recession.
Upon my return from Tokyo to Silicon Valley for fundraising, an Italian customer asked to start work in the last week of February. At the same time, a Brazilian customer also asked if we could visit Sao Paulo. So, I decided the best place to be on standby and prepare for both meetings was in West Palm Beach, Florida, and also provide updates in-person to some local investors.
I headed down to Southern Florida, which until today has 150 cases confirmed. For those of you who are not aware of Southern Florida, it’s where many Americans go to retire, at least from the Northeast. I flew down to meet investors and prepare for whichever trip came up first as the highest priority. Preparation these days means restocking on facial masks, hand sanitizers, and other safety paraphilia. So I made it down to the local pharmacy chain at 8 AM to find these items, only to find that facial masks were not available for a 200 mile radius in South Florida. I saw firsthand how the fear of the coronavirus is impacting supply chains for companies like 3M, CVS, Walgreens, and others. To give you a perspective, the distance from Miami to Wuhan is over 8400 miles, that is, about 1/3rd of the way to geosynchronous, high-earth satellites orbiting Earth. Bezos, Musk, and others are talking about planning for interplanetary supply chains, but what’s our current plan to ensure the throughput of existing supply chains on planet Earth first?
Due to the observance of Carnival, the remaining choices I had were to enjoy West Palm Beach hanging out with two of the world’s modern supply chain pioneers, or go see how ThroughPut could assist with the supply chain planning problem in Milan. After a weekend Spring Training game in Florida with investors, off to Italy it was.
The last call I received before flying out of Miami was from my father. My father comes from the medical world, so when he called asking if Milan was in “Northern Italy”, naturally I could feel his concern. It’s almost ironic that with all the issues around the treatment of certain international football players in the Italian Serie A last year, that the Italians have now become “that group of people” that the international community is concerned about and taking measures against. Coronavirus has led to a new reason for societal division and discrimination, in order to preserve what nations value most: the trillions of dollars of wealth tied up in their supply chains, which until now, have all been enabled by the operations people taking risks to maintain uptime, quality, and inventory deliveries.
Transiting through Lisbon, the only measure taken at Milan Malpensa International Airport was a quick temperature scan. The time from getting off the plane to getting in my taxi was no more than 5 minutes. Uber prices seemed about 2x for peak-pricing from the last time I visited Milan just back in July 2019.
For the most part, Milan was still operational this week. The situation in a supermarket in central Milan was indeed astonishing to see, as covered by the New York Times, and other international media outlets. Shelves that usually carry pasta and water were empty. There was a flood of large 18 wheelers in the city of Milan, apparently triggered by all the stock-outs going out and building issues with cross-border transportation leaving the region again. However, outside of central Milan, there were still supermarkets full of food, water, and even hand sanitizers. Fruits and Vegetables shops were still open on Sunday, as well as restaurants. Like with anything, the media was focusing on a select few examples of supermarkets to tell a story that aggregates eyeballs and sells more ads, that on the ground, wasn’t exactly true outside of their narrow focus on sensationalism.
Unlike Tokyo, facial masks were more sporadic in Milan subways, though likely due to a supply chain availability issue. From local conversations, I learned that facial masks were going as high as 500 Euros a pack, with hand sanitizer going for a Euro per milliliter.
Considering what I know about culture in Italy, I couldn’t imagine people not being out and about and living their lives to the fullest, even if their employers were allowing them to self-quarantine at home in some cases. In fact, over the last few days, that’s exactly what I have observed first hand here in Italy: people were going about living their lives, adapting to bumps in the supply chain. While there are multiple businesses shutting down, and asking people to work from home, that’s not happening across the board. Over the week, people were still eating out, travelling to Venice, and going skiing. This is not to claim that people are playing hooky. On the contrary, at some corporations I have seen firsthand how even their office employees are coming in hours before opening time to help their front line operational people meet customer demand. While staying home may be safer, it doesn’t seem to be the option most people are taking. In some cases, some businesses have realized unprecedented sales numbers.
Most operational professionals are continuing to live their lives and ensure that their Milan residents are having their needs fulfilled. To me, that is highly admirable, and something the press isn’t covering at all: Operations’ Unsung Heros.
While the coronavirus situation endures globally and we look for a containment solution for both the virus and international media’s runaway coverage driven by clickbait engines, it is admirable to see operational people continue to serve their communities even with unprecedented uncertainties and abnormal levels of risk. In fact, the only two groups of people who I have encountered running towards the situation versus away from it are: A) medical professionals, and B) field operations professionals. Like 911 First-Responders, these folks don’t shirk responsibilities and it’s admirable that these people are putting the needs of their patients, customers and other everyday people before their own safety. They are choosing to keep the world safe, united, and well-served, to prevent what an uncontrollable epidemic, or pandemic, lead the world towards.
From the front lines, network during this period has reminded me of the commitment and humanity of people that I hadn’t witnessed firsthand since running Yemen operations and visiting Iraq a few years back. Regardless of Tim Cook claiming that Apple’s supply chain is getting back on track, and other leaders assuring shareholders that supply chains are getting back in control, I feel one thing is getting overlooked: when the going gets tough, people, not robots, step-up to bring, and keep, supply chains, back online. When technology should help us the most, it seems like we choose the analog method to deal with problems: experienced operational people.
Coronavirus is a human problem. And if you don’t want to see things from the humane aspect, then you can look at it from the “cold numbers” US stock market perspective. The worst fall since 2008 should be an eye-opening account to communicate how closely supply chain activity controls the inventory and sales lines, and ultimately the forecasted Earnings-Per-Share of a company. ThroughPut highlighted this back in 2016, and the world is now living and breathing the situation less than 4 years later. Global throughput is affecting humanity, and thus capitalism, showing how closely they remained tied together. The only question remains now is: “Are you willing to acknowledge that there is no bigger problem than throughput now?”