The Supply Web: A Sticky Situation

Welcome back to the 10th issue of The Supply Times. Wow, double digits! I hope you’ve enjoyed reading as much as I’ve enjoyed putting it together.

This issue, we’ll take a look at ways the war in Ukraine has probably changed the supply chain forever, plus a look at what HR departments are doing to prevent AI bias. I’ll also share some of the things I’ve been reading, watching, and thinking about.

Shall we?

Industry Highlights: Supply Chain 2.0: Spiderman Edition

Back in January, I wrote about how experts thought supply chain would begin to return to normal once the Delta variant ran its course. As the Wall Street Journal reported in December, the pandemic exposed many of the supply chain’s flaws, but most believed shifts to a more “resilient” system wouldn’t be likely because economic concerns would trump national vulnerabilities.

And then Russia invaded Ukraine.

With hiccup after hiccup disrupting the flow of goods and components across the globe, supply chain experts are finally starting to come to terms with the fact that the way we think about the “modern” supply chain might not be the most stable solution.

As the Wall Street Journal pointed out this week, the general sourcing orthodoxy included finding the lowest-cost manufacturer—regardless of distance—and never carrying surplus inventory or parts. But companies—especially those in the tech world—are rethinking those norms.

A great example of this shift is the American tech companies investing massive amounts of money in new factories on US soil. Along with Intel’s intent to build a $20 billion microchip factory in Ohio, Samsung also has plans for a $17 billion facility in Texas.

Automakers are also following suit. After being impacted for years by an inability to effectively source components—most of which were from China—Volkswagen executives have begun restructuring how the company sources parts and materials. The Wall Street Journal reported VW is prioritizing the uninterrupted delivery of parts over price. “We still want competitive prices, but my priority is securing supply,” VW purchasing chief Murat Aksel said. “Without components, you can’t build cars. And zero production means zero profit.”

The shift isn’t necessarily a move toward deglobalization—more like a transformation from supply chains to supply webs, so companies can quickly obtain goods from a different source when one avenue becomes unavailable. My Spidey sense is tingling.

Since the majority of supply chains flow through China, it will be interesting to see how this new strategy will affect the country’s economic dominance.

The Future of Work - The Ethics of AI Hiring

When HR departments began integrating artificial intelligence technology into their hiring, the idea was that it would not only save time but also eliminate the inherent bias found in a human-run screening process.

But because AI relies on existing datasets and humans with biases actually DEVELOP the technology, companies have begun to realize that AI could actually amplify those biases. This explains, for example, why Amazon shut down its AI recruiting tool in 2018, when an audit discovered it was biased against women.

Lawmakers are scrambling to prevent these biases from happening, proposing legislation like the Algorithmic Accountability Act, but HR executives are also taking matters into their own hands.

“People assume that the perfect mathematical equations are perfect,” Microsoft senior director of HR technology Rajamma Krishnamurthy told an audience at this month’s HR Transform conference in Las Vegas. But when something goes wrong with AI, “there are only three things: data, data, data.”

These business leaders urged employees to exercise caution when implementing tech. “I would say the use of AI to evaluate and score video interview content is one area where I would say it’s extremely high-risk,” EEOC Commissioner Keith Sonderling said in an article from Morning Brew, adding that computers often make mistakes when transcribing a candidate with a foreign accent or speech disability and tend to rank their responses lower than someone who speaks perfect English.

Amit Mohindra, the founder and CEO of People Analytics Success added that data collection is another important aspect of using AI in the hiring process. Mohindra told Morning Brew the best policy when it comes to collecting employee data is transparency, which gives employees a feeling of understanding and trust.

The ultimate goal is to take the human out of hiring so the playing field is level for all applicants, but even with new innovations, we’re still not quite there.

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About

RE: Supply Chain, Work, and Beyond

• 📕 Read One of the best books I’ve read recently is Late Bloomers: The Hidden Strengths of Learning and Succeeding at Your Own Pace by Rich Karlgaard. It’s a different take on the fact that as a society, we’ve become so enamored with worshiping youth for the sake of youth. This puts a lot of pressure on young entrepreneurs, leaders, and creatives—the idea that if you don’t come up with a unicorn by the time you’re 30, you’re basically a loser. But Karlgaard points out that if you look at the people who’ve started companies, their average age is a culmination of how to launch successfully and get ahead. The magic number is 45 when it comes to average age of successful founder.

• 📺 Watch: Yet another one of the corporate origin series has got my attention this past month. This time, it’s We Crashed, a docuseries based on the brilliant rise—and fall—of WeWork. It’s got a solid cast, starring Jared Leto and Anne Hathaway as the founder/impact officer duo Adam and Rebekah Neumann. It’s based on a podcast of the same name, and I’m all about watching the internal drama of a successful startup that ends up crashing and burning.

• 💡 Think: The Economist wrote this great article on business travel last week, and it’s got me thinking about how different our world truly is following the pandemic. When the stay-at-home orders began dropping in March 2020, we mostly assumed we’d be hitting pause on life for a bit, and once the shadow of Covid passed over us, we’d be back to normal. Now, two years later, that’s clearly not the case, but many of us are still in denial. Business travel spending is forecasted to return to pre-pandemic levels, but now that we’ve seen that we can successfully work with that client virtually without flying to their headquarters in Cedar Rapids, is it really necessary? Could all of those meetings have been emails after all? If so, how does that impact the travel industry?

CHART OF THE WEEK

QUOTE OF THE WEEK

“Every man, if he is so determined, can become the sculptor of his own brain.”

— Santiago Ramon Y Cajal

TWEET OF THE WEEK

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