Why supply chains are pivotal in times of disaster

You may not think about how strawberries get on your breakfast plate, or what it takes to get a highly complex society running properly, but our next guest does. Rosemary Johnston is the senior vice president of operations at Savi Technologies.

ABERMAN: I know, from our conversation before we came on the air, that you are jazzed up about logistics and supply chains. So, first of all, what do you do on a daily basis?

JOHNSTON: On a daily basis, I’m responsible for working with the Department of Defense to make sure that they have the infrastructure that they need to provide in-transit visibility for all of their parts that are transiting across the United States, internationally, into an area of responsibility—essentially giving them the information they need to know where their goods are at any given point in time.

ABERMAN: Which is a really important thing just because, ultimately, if we’re sending troops overseas, or sending aircraft carriers, or planes, whatever we’re doing, there’s a lot of stuff that has to go along with it, and you can’t just say, oh, where’s that fan blade, I know it’s around here somewhere. You can’t start rifling around in a toolkit. It has to be visible and there.

JOHNSTON: Exactly. The need for in-transit visibility stems from Desert Shield and Desert Storm, when the DoD was deploying a lot of equipment, along with their folks, and the equipment got ahead of the people sometimes. They had supplies coming over, they were shipping in these large containers. The containers started getting piled up, so no one knew what was in them. And so, the troops, needing fan blade, rotor blades, other equipment, would say, I can’t find what I need. So, I’m going to order it again.

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That stuff would come over, another container gets added to this mountain of containers. A general officer said, there’s got to be a better way to do this. And so, he spoke with our CEO at the time, because Savi was doing some very innovative things in in-transit visibility, and together they thought about, how can we take care of this problem, what will give us, at the lowest cost possible, a way to provide in-transit visibility? So, Savi delivered the infrastructure, built out the readers, the interrogators, and the transponders that go on the containers or pallets, and in-transit visibility for the DoD was born.

ABERMAN: If I’m sitting here and I’m living my life in D.C., how does supply chain and logistics affect my daily life?

JOHNSTON: So, you mentioned strawberries in your cereal, but there’s also, we have come to expect that when we order something from Amazon, we’re going to get it in a day or two. Well, there are a lot of people working in multiple supply chains to make sure that Amazon can live up to their commitment of delivering goods to you when you want them. So, that’s one example. There’s the example of delivering fuel to the gas station so that you’ve got fuel when you go to gas up your car. It’s getting parts out to Metro.

So, if you Metro in, we all know what happens if Metro goes down. People can’t get to where they need to go. So, the people working those supply chains that get the parts to the end location. That’s the fun of the supply chain, looking at something that is so complex, and has so many people working and feeding into it, all coming together in one sweet song at the end that says, look, Amazon, I got my part, or I’ve got my package.

ABERMAN: It’s crazy how prevalent it is in civilization. Just as an aside, I’m getting ready to take a trip over to Rome. When I was looking at Rome and its history, it worked great as long as they could get the grain from Egypt. And suddenly, they lost the ability to get grain from Egypt, and the city shrunk, in a hundred years, down to nothing. Logistics is so important, and yet, I’m not sure how many people really appreciate it, particularly entrepreneurs. Do you get a sense that a lot of entrepreneurs, a lot of small business owners, just kind of take for granted that they’ll create a product or something and it’ll just fall from the sky, and it’ll get to consumers? Do you think that people don’t appreciate how important this is?

JOHNSTON: I would agree with that. We even have our own examples from our own company. We’re designing a new transponder, a new sensor, and it just seems so simple that you’re going to get the parts where you need them, you’re going to be able to assemble that, it’s going to get labeled by itself, it’s going to have part numbers assigned, and spec sheets, and all these things that go into releasing a product, all of that’s going to happen magically, and it doesn’t. It takes people thinking ahead and saying, okay, what am I going to call this? From a marketing standpoint, what’s going to be more attractive to someone, what’s really going to pique their interest into buying it? To getting the label made, making sure the branding is consistent with the company’s branding, or will pique someone’s interest. So, all of that, while you don’t necessarily think of it as supply chain, it all is part of that supply chain.

ABERMAN: Before I let you go, last thought. It seems to me that often supply chain becomes most prevalent in situations like what went on in Puerto Rico, or what’s going on Hawaii now. In times of disaster, is that the right time for us to be thinking about supply chain? Or are we doing the right stuff?

JOHNSTON: I think we are coming to that point, but part of is that, when you’ve got scarce budgets, or in this case it took a while to get the budget, we try to plan for contingencies, but you can’t plan for everything. And so, I think from a logistics standpoint, logistics planners need to think about those types of humanitarian crises years in advance. It can’t be, okay, this is May, a season starts in two months, let me put my humanitarian or crisis hat on and see what we’re going to do. Because you’ve got contracts you need to establish with vendors, you need to make sure, as in the case of FEMA, that their partners, the Defense Logistics Agency, have fuel ready, have water ready, have meals ready to eat, have all of that stuff built up in their inventory.

And that inventory takes time. The planning for things like what’s going on in Hawaii, in Puerto Rico, things in the natural state of life. Those plans need to start a while in advance, and they need to take advantage of the technology that exists, and understand the technologies. Such as, the predictive analytics, the data that comes from their supply chains as they’ve experienced these humanitarian crises before. The more you can learn from that data, the more you can put that into your planning, and make sure that you don’t commit the same mistake again, so you learn from it.

ABERMAN: The same way that, over time there’s a permanence to how strawberries are delivered, our society needs to have permanence for how we’re going to deal with disasters. You don’t improvise that.

JOHNSTON: Yes, exactly.

ABERMAN: Perfect. Well, Rosemary, thanks very much for taking the time, it sounds like you love what you do, and if this radio thing doesn’t work out for me, I may give you a shout.

JOHNSTON: Sounds great!

ABERMAN: That was Rosemary Johnston, senior vice president of operations, Savi Technologies.

JOHNSTON: Thank you.

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