How much stuff is enough?

by Air Commodore Hayden Marshall (Ret’d)

 In my new found (and very welcomed) capacity as an observer of life, I was agog (amongst others) at the recent behaviour of consumers and the “hoard mentality” that gripped the psyche of a significant number of people in response to COVID19 fears. What was the basis of their concerns? What were the indicators/warnings of an impending supply shortage? Why were some many people behaving in a manner that potentially jeopardised the welfare of others and for no apparent reason? There was no logic to the unprecedented demand for basic consumer goods that was later replicated in increased demand for selected pharmaceutical goods and packaged alcohol.

Despite the pleas from the major supermarket chains that there were no supply issues, consumer hoarding continued at dangerous levels. Interestingly, supermarket shelves remained well stocked with razors, deodorant and shampoo – obviously good grooming is not considered to be an essential feature in a post-apocalyptic world. The primary desire to protect Number One at the potentially expense of others appears to have been the primary motivator, regardless of strong and well supported messages from senior officials.

 Consequently, I read with fascinated interest David Beaumont’s recent post “Toilet Paper and Total War”, which unfortunately also refreshed a number of other instances in recent history where competition for limited resources to support military activities led to a series of unintended consequences. I recall that pricing for building materials in Dili (Timor-Leste) reflected the influence of an extended presence of the United Nations and several large deployed western military forces, which not only impacted the local population and there ability to procure basic needs, but also the capacity of the Timor-Leste Government to fund important redevelopment programs. The ADF also found itself on the wrong side of a bidding war for ferry services during OP RAMP when Canada managed to guzzump an Australian ferry contract for the movement of Australian personnel from Lebanon to Cypress during a peak in internal hostilities – fortunately the impact was limited, but the risk to the safety and security of Australians was very real.

The desire to hoard goods is a natural default position, given the potential consequences of failure, regardless of the impact on others. In most instances, limits to budgets and storage capacities prevent hoarding to a great extent. So why do we see hoarding behaviour on operational deployments? In most instances, the shackles of budgets and storage capacities are removed and the demand requirements from deployed forces are often subject to less scrutiny. If the operational commander endorses the requirement, the enabling organisations will make sure that the material/service (and some) is made available as a priority. A lack of confidence in the capability of the supply chain by operational commanders to deliver timely results often results in a “store forward” mandate, regardless of downstream consequences.

I recall instances where repair pipelines were thrown into complete disarray due to formal direction to “store forward” unrealistic quantities of critical spares and repair parts – just in case. While the immediate operational requirement was perceived to have been satisfied, the long-term sustainment of the capability was often compromised to a significantly detrimental extent.

 Whilst I understand that in most operational situations the “enemy vote” needs to influence stock holding considerations, the answer is not always to “store forward”. Those who were intimately involved in the redeployment of Australian combat elements from Afghanistan in 2013 will have no troubles in citing examples of huge stockpiles of stuff that were created through over ordering, poor stock management, risk adverse planning and a failure to recognise changing security conditions. All the accumulated stuff had to be managed through a variety of redeployment options at not inconsiderable time and cost. At the time the demands that were placed that lead to this inflation in stock holding levels, were other solutions given due consideration, or was the fact that stock was available off-the-shelf given priority before other options where effectively assessed? The obvious absence of competition from other operational imperatives made some decisions a little easier.

 So how do we build sufficient confidence into the supply chain to avoid the implications of contradictory behaviours that artificially burden deployed elements with sustainment liabilities that are greater than their assigned capability? The key is effective data analysis, trusted modelling tools and a systematic approach that provides total visibility across the entire supply network. This will support an effective demonstration of probable outcomes during the planning phase based on selected COAs, supported by an ability to intervene where required. The “just in case” requirement is often applied without a full understanding of the implications. Whilst it is nice to be prepared for everything, this comes at a considerable cost that may well have been avoided where an effective assessment of history and predictive (intelligence) data can support other options.

 The obvious need to routinely exercise the logistics system in parallel with the exercising of deployable military capabilities is paramount in order to effectively influence (and inform) tactical, operational and strategic logistics outcomes to an extent where (future) operational commanders have a full appreciation of the extent of logistics issues. Otherwise, the default option of “operational hoarding” to satisfy immediate command interests will continue to prove to be both expensive and unsustainable. The last time I checked, the global supply of “magic fairy dust” was in very limited availability.


 Air Commodore Hayden Marshall retired from the PAF in March 2018 after 36 years of service in a range of logistics roles. He is currently unable to enjoy recreational travel, sightseeing and golf, but is spending his time in isolation catching-up on reading and reflecting on issues that may be of interest for the next generation of military logisticians.

One thought on “How much stuff is enough?

  1. An interesting perspective provided here sir.

    I have recently been reading a book entitled Narrative Economics (Shiller,2019) which presents some rather interesting arguments and ideas behind the promulgation of economic narratives which may, on reflection be counter intuitive to our personal values. One such concept raised was that of the man being a susceptible to suggestion, which is described as an extension to herd mentality that can be commonly observed in such cases as that of the recent toiletpaper crisis, despite protests from suppliers that there is a sufficient supply to support demand.

    In line with this, the field of economics has identified that homo economicus does not exist and as such behaviours of the consumer (which includes the ADF) can be influenced by unconscious bias and as identified in the article above, can lead to instances of FE choosing to hoard and apply a Store Forward mentality instead of exercising the supply chain.

    I would argue that much like the global economy where consumer confidence is measured IOT predict potential demand side consequences, as supply chain specialists and logistics officers we can develop and utilise tools such as supply chain analytics to help reinforce confidence to our supported FE in the ADF’s logistics system. This leads us towards the question of whether our existing supply chain analytics capabilities are sufficient to enable decision making, whilst tools such as VIPA are handy, they are still fairly rudimentary and are not yet harnessing the potential of predictive data analysis. Could it be that the ADF provides greater effort to developing a data analytics capability as a potential solution to improve supply chain confidence in the future?

    If we develop the customer’s confidence in the supply chain and reinforce its capabilities and resilience in the barracks and field environment, then we could likely go some way to help shift behaviours away from Just in Case or Store Forward centric thinking to behaviours which enable the system to be efficient, whilst also being able to support multiple stakeholders.

    Like

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