Leadership

The Just-In-Time Apocalypse


More chilling genius from Charles Stross:


"Our civilization runs on a

much slimmer margin than most of us realize. As a

cost-saving measure, the corporate policy of the past three

decades has been to abolish warehouses and stockpiles wherever

possible and to use information technology to streamline

logistical processes. If you go to Apple or Dell's web site

and order a computer (or if you go to your local Ford

dealership for a car), you may think you've bought one and

it's being delivered -- but in practice, the computer (or

car) doesn't exist yet; what happens is, your order triggers

a series of cascading requistions for parts, almost all the way

down to the factory in Taiwan that makes the resin the

chips are embedded in, and those parts are shipped to

factories and assembled, and the assemblies are shipped to a

final factory for final assembly and packaging, and the

package is shipped to your door (or the car dealership) via

a packet-switched network of considerable complexity.

"Stockpiles represent capital that is locked up, not in

motion generating wealth. If you minimize your stockpiles of

parts (or oil, or pork bellies, or whatever) you can make

your investment capital work more efficiently. But

efficiency is the enemy of flexibility. If your computer

factory works the old-fashioned way, building boxes on a

production line and warehousing them until someone buys them,

then a hiccup in the supply of some vital widget won't stop

the company selling computers -- it'll just cause the

stockpile to drop. In contrast, a just-in-time system stalls

instantly if just one critical component becomes

unavailable.

"There's an added twist to consider: our high-tech consumer

gadgets are deflationary. Their value drops rapidly from the

moment they're manufactured. Two years ago, a 42" plasma TV

would have set me back £3500-5000; today, I can buy one

(if I want) for £1000-1800. If you do

stockpile goods, the stockpile is not merely an inefficient

use of capital -- it's a drain on your profits.

"The consequence of this is that high-tech businesses

mediated by the internet (Amazon.com is the classic example)

are far more brittle and vulnerable to external disruption

than their old-fashioned predecessors.

"Oil is the obvious choke-point. We need oil to power our

transport infrastructure -- all the delivery vans that bring

supplies to our neighbourhood shops, or our doorsteps. We

also use oil to deliver oil -- to filling stations, to

refineries via supertanker -- and if the pipeline stalls,

not only does the oil become expensive but, by and by, the

means of delivering the oil becomes inaccessible.

"I need to go and read some more on the collapse of complex

civilizations. But here's a parting thought: these brittle

networks propagate the side-effects whenever a single node

breaks down. It may be that some time in the future, the US

economy is brought low not by a hurricane in the Gulf taking

out domestic oil refinery capacity -- but by a typhoon in

the Pacific damaging some unmapped critical dependency in

the supply paths used by the world's largest companies to

keep their pipelines moving. Simply making the USA -- or the

EU -- self-sufficient in energy supplies isn't enough; to

address the problem, we need to wean ourselves off the cult

of efficiency at the expense of resilience."

About

Jay Garmon has a vast and terrifying knowledge of all things obscure, obtuse, and irrelevant. One day, he hopes to write science fiction, but for now he'll settle for something stranger -- amusing and abusing IT pros. Read his full profile. You can a...