By R. Dana Barlow
Our appetite for convenience has transformed the supply chain – and reshaped communities, infrastructure and the hidden costs of getting what we want, when we want it.
Americans like stuff.
Here in the United States, they crave to see stuff, smell stuff, touch stuff. Mostly, they yearn to order stuff and get it delivered … next day, same day, even yesterday, if possible. Well, not quite yet for the last one, but give artificial intelligence time to read our minds. Just remove the titanium helmet and let Siri do her thing.
These days, thanks to the pandemic, getting stuff is so much easier and gratifying. You can shop from the privacy of your own home, on your smart phone while lounging on the couch munching on snacks and watching television. There’s one more typical place, but let’s move on, shall we? Could it get any more convenient?
These days, daily deliveries to our doorstep come from those blue electric Prime vans, brown UPS vans, white FedEx vans and during the pandemic, the dented gray hatchback driven by a woman clad in a bathrobe and fuzzy slippers. The last one is true and actually happened.
The bottom line? Wanting stuff is fun. Getting stuff can be costly.
Don’t think of this as a condemnation of avarice, envy, greed or gluttony. Think of it as a way to offset and balance out the pleasure of growing or replenishing your personal inventory.
There’s little-to-nothing wrong with wanting stuff so long as you recognize and acknowledge the costs to get and have the stuff, not to mention disposing of it when you no longer want it.
Getting stuff requires distribution and logistics; having the stuff requires storage and warehousing. Woven throughout those functions are people and technology to enable either as effectively and efficiently as possible – well, for clinical purposes anyway.
Give and take
Ensuring the supply chain keeps pace with, if not outpaces, the increasingly ravenous demand chain requires a burgeoning number of resources that unfortunately can infringe on other areas of our lives. Think of it as give-and-take, similar to the debate around privacy and security. If we want to maintain our privacy, we unfortunately relax security, and vice versa.
Let’s start with the proverbial last mile and work our way backward. The New York Times recently published an insightful, well-written feature that highlighted the suburbs of the Chicagoland metropolitan area as indicative of a trend, noting that “three decades ago, this area was mostly prairie sprinkled with quiet subdivisions.” Yet 25 years ago, electronic commerce and online shopping emerged, quickly outgrowing novelty status to becoming a ubiquitous lifestyle choice. Retailers needed warehouses to store the stuff people ordered. The NYT reporters published this curious observation: “Since 2000, retail giants and developers have erected more than 146 million square feet of warehouse space in the Chicago metropolitan area, equivalent in size to roughly 1,400 Home Depot stores.”
A native Chicagoan <smile> can attest that ginormous warehouses buttress both sides of the I-55 expressway, for example, a logistics-laden corridor that reaches from McCormick Place downtown to the east past Joliet to the far south. I-55 represents a nearly 300-mile concrete and asphalt-frosted ribbon stretching to the metro St. Louis area and even farther south to New Orleans. It also includes a portion of the “Mother Road,” Route 66, which is celebrating its centennial this year.
The NYT further reports that these warehouses now occupy plenty of previously open landscapes used largely as farmland that could have been earmarked for housing to accommodate future population migration.
But warehousing represents a booming business, initially creating thousands of short-term construction jobs before simmering under steady supply chain work.
Next, what do warehouses need to receive stock? The lifeblood of our continental supply chain system: Semitrailer trucks. The NYT reports, “on average, roughly 20,000 trucks pass through
Joliet every day. Most keep to Interstate 80, but as many as 6,400 – more than five times as many as before the warehouse boom – use local roads and state highways.”
Why does that matter? The NYT continues, “They pummel roads, belch fumes and batter the pavement, contributing to road damage that requires millions of dollars of repairs paid for by local and state governments, according to budget and grant documents.”
Native Chicagoans don’t blink at this because “roadway construction” represents one of the area’s five seasons – it’s the annoying one that spans the other four and naturally enables the locals to weather high blood pressure as an organic benchmark. Road repair fosters scores of jobs, too, along with folks who work for the state’s Environmental Protection Agency to regulate vehicle emission standards and air pollution controls.
Of course, ZIP-code-worthy warehouse townships also affect local housing and property values, due partly to traffic flow and to safety issues from increased accidents and crashes.
Finally, what drives the need for all these warehouses and trucks? Devices like desktop, laptop and notebook computers and smartphones to enable ultra-convenient online shopping. And what do those devices rely on to facilitate transactions? Lots and lots of data capacity and computing fed through an infrastructure of servers that need to be housed in oversized data centers that rival the warehouse townships in size and spread. The explosion of cloud storage and artificial intelligence (AI) moved the needle for these sprawling procurement palaces to “need to have” from “nice to have” status.
While proponents in Illinois alone “tout property tax revenue, economic development and job creation as reasons for local governments to approve [data center construction] project,” according to Capitol News Illinois, many communities are pushing back in a “Not-In-My-Backyard” (NIMBY) movement not seen since the 1980s and 1990s regarding device sterilization facilities.
Opponents express serious concerns about data center resource consumption that can negatively impact neighboring communities.
“Property tax revenue from data centers can be significant, but many say the massive centers aren’t worth the millions of gallons of water they consume or the stress they put on an already struggling electric grid. The ComEd territory in northern Illinois, for example, has enough large-load energy projects in its queue to more than double the amount of energy demand in the territory by 2040,” reported Capitol News Illinois. Based on AI investment and usage growth, data center capability is estimated to double by 2030, according to the state publication.
All in all, the proliferation of warehouses, semitrailer trucks and data centers represent supply chain’s progress in satisfying surging public demand for stuff – and more of it more quickly, more frequently and more conveniently.
Hospitals and other healthcare facilities simply are active participants in this technology-oriented operational migration process. Trying to control, manage and rein in this progress may be Sisyphean at best. Perhaps the more realistic option is to use your imagination to vault ahead to the future to maneuver where progress is anticipated to arrive and work back from the expected endgame. Think of it as reflective and reflexive resilience.
R. Dana Barlow serves as a senior writer and columnist for The Journal of Healthcare Contracting. Barlow has nearly four decades of journalistic experience and has covered healthcare supply chain issues for more than 30 years. He can be reached at rickdanabarlow@wingfootmedia.biz.