June 13, 2024

PostNormal Times: Everything is Connected 

Postnormal Times S2EP2
Andrew Vosko & Jeff Macias

PostNormal Times is a podcast for our complex reality and unpredictable world—a world where the stakes are high and innovation is crucial. Andrew Vosko, PhD, associate provost and director of transdisciplinary studies at CGU, and his guests explore ideas that transcend traditional academic boundaries and address our most pressing needs. Get ready to challenge your assumptions.

S2:E2 Summary 

In Season 2 Episode 2 of PostNormal Times, Host Andrew Vosko, director of transdisciplinary studies at Claremont Graduate University (CGU), speaks with Jeff Macias, who is both a professor at Arizona State University and a PhD student at CGU, about supply chains and the vital role they will play in a sustainable future. If everything is connected, supply chains do the connecting.

Season 2, Episode 2 Transcript

ANDREW: Welcome to PostNormal Times, a podcast for our complex reality and unpredictable world, where stakes are high and innovation is crucial. In this series, I get to sit down with some of my favorite minds to explore new ideas that transcend traditional academic boundaries and address our most pressing needs. I’m Andrew Vosko, associate provost and director of transdisciplinary studies at Claremont Graduate University. Welcome to the show.  

I’d like to welcome you to another episode of PostNormal Times, where we discuss not business as usual—not in the “exchanging money” kind of way, although it does certainly involve that (and today’s conversation might touch on that a little bit too)—but our normal day-to-day functioning in a world that isn’t normal.  

And I’m very happy to be here with a guest who’s a professor of practice at Arizona State University and also a PhD student at Claremont Graduate University: Jeff Macias. Welcome to the show, Jeff.  

JEFF: Well, thank you for having me, Andrew, it’s a pleasure to be here. As my former professor, it’s a pleasure to be invited by you to your show.  

ANDREW: Full disclosure: I direct the transdisciplinary studies program, and we offer a Master of Arts in Transdisciplinary Analysis. We have a new curriculum that involves a bunch of these complex skills—workshop-oriented programs in which people from all the different disciplines get to come together and experience what we consider the core basic skills of what you need to be able to do in a complex world in a complex economy.  

In the first course that we offered—this was a collaboration and communication course—Jeff was one of our first students and gave fantastic feedback that helped us understand how the course works. He’s also an educator himself. He’s a professor of practice at the business school at ASU with expertise in supply chains. I didn’t realize this at the time because I’m not a supply chain person, but the supply chain is like a systems discipline: You have to understand maps and networks for everything because everything is connected to everything else. Am I wrong in that understanding because I’m coming from the outside?  

JEFF: No, no, you’re actually spot on. The systems part of—and I look at it from a process perspective—supply chain management, as I tell a lot of my students, is the bone and muscle of every business. All a supply chain really is, after you extract dirt, minerals, and whatever else from the earth, is the processes that transform and add value to a particular good or service, all the way from suppliers through internal transportation, manufacturing, and distribution. There’s a series of different processes, and each of these processes has to be linked together, and it’s very hard to do that within a company and it’s extremely hard to do it several suppliers down the chain. So if you imagine all the variability that causes for you and for all your customers as well because there’s a reverse element to supply chains—that stuff comes back to you.   

So, it is, from a business perspective, the discipline that manages all the operational activities, plus a lot of the planning, forecasting, and negotiations, instead of just the transportation. Many people don’t know that the supply chain management discipline is a little bit of science and a little bit of art. That’s what’s fascinating about it. 

ANDREW: I could see that it brings complexity to what you might be doing in a model system. So, I was thinking about supply chain from my own experience in graduate school coming from the biomedical sciences. For most biomedical sciences from that time, the zeitgeist and the underlying assumptions have since changed. But at the time, we were essentially trying to investigate something at a molecular level, to make some kind of biologic or pharmaceutical intervention. So, if what you do creates a pill at the end of the day, that’s awesome, and then you’re done.  

But we don’t think about what happens with how that pill needs to go to a person who needs it, and all the steps in determining whether that pill does something. I’m not going to speak on behalf of all graduate students in the biomedical sciences, but I’ve got to tell you, none of the people who were around me at that time, none of us, thought about those things. The best thing that we could think of that was different was drug delivery. Maybe a pill doesn’t work, maybe you need like a nasal spray for it to work and that’s how you do the drug.   

But we don’t think in terms of this chain of processes because we’re not looking at this design component. We’re not looking to break it all down into what needs to happen. Let’s just make the pill itself, even if it costs $2,000 a pill and it’s unaffordable for anybody to get because of all the raw materials it needs. 

 JEFF: Right. You also have to consider strategically, in the pharmaceutical industry, for example, when we got COVID-19, it was a significant realization from a pharmaceutical perspective that the infrastructure that we had built in the 1950s and 1960s had been degraded. India and China have spent decades building up a pharmaceutical precursor industry. So, all the raw materials and semi-finished good materials, and even some of the finished goods would come from China … which created a tremendous amount of risk internally and drove up—and this happened all over the world—and …I believe the president famously said he was going to fix the supply chain, and I laughed.  

So,  for a supply chain person, there’s millions upon millions of supply chains going on every day, from a foreign pharmaceutical perspective, and even getting down to the primary packaging and delivery system for a nasal spray versus an injection is an exercise in supply chain management. You can’t get away from it. It ruins your life in a lot of ways. I can’t even go to Disneyland and enjoy anything because I’m looking at it as a giant supply chain problem as I’m walking through the entire park. 

ANDREW: But OK, if it ruins your life, I have to get personal with you. I saw that you studied supply chain as an undergraduate. So, you went to be a masochist early on and you’re holding on to this as a profession now. You’re probably doing—and I don’t know, I’m interested in where your dissertation interests are—something around supply chain. So, if it ruins your life, why are you still in it? What are you finding that you can’t let go of? What in you is really latching on to this?    

JEFF: I don’t know if ruining is the right word. Here’s a funny story. When I first switched over to supply chain, it was a young discipline, even at Arizona State. It was still called purchasing logistics. I was in the first class in 1999 in which they allowed us to call it supply chain management. So, we had a choice. Michigan State, Arizona State, and Penn State are the three pioneering supply chain schools. You’ll see them ranked interchangeably in the top 10 of U.S. News and World Report.  

As an undergraduate, I had no idea what I wanted to do. I just wanted to have a really fun job that paid me pretty well and to play music. That was the 21-year-old brain I had at the time. It wasn’t something I could explain to my parents. It wasn’t something I could explain for several years until I really got into this one and started seeing the bigger picture.  

Even with my training at Arizona State, I thought I knew a lot. But really, it was the accumulation of a lot of experience. And when I say ruin, I mean it in a humorous way, in that you can never look at anything in the world the same way when you know there’s some supply chain stuff going on. Every single movie, every single activity that you’re doing, there’s some type of underlying supply chain issue. 

Even when going to a grocery store, I look at the grocery store and I see a planogram of items being put on a shelf in an exact spot. I know exactly why a supply chain would facilitate that because of the vendors managing the inventory. They’re not working for the store but they’re loading it on there and they have to have a map to do that. Those are just some of the things about the discipline that make you think about the world differently. And yes, for my PhD, I am very interested in the consumer side of the supply chain and the sustainability side of it. Most of my research is focused on consumer behavior in supply chains, and how they impact sustainable pro-social behaviors. 

ANDREW: Okay, so there’s a lot to unpack here. … And before I forget it, I’ve been using this term quite a lot lately because of my own professional experiences. There’s a reason why the saying exists, that you don’t want to see “how the sausage gets made.” But at the end of the day, that’s an homage to the supply chain. When you realize how the sausage gets made, then you start seeing how other things also get made in a similar way, and you realize that there’s an “ignorance is bliss” as a consumer a lot of times. 

This is something that I’ve been coming across more as I teach more. I’m focused on this region we’re in, especially in this corridor space, in which we get most of the goods shipped from China into the ports of Long Beach and Los Angeles and shipped to the rest of the country through this I-10 corridor that we sit right at the mouth of here in Claremont. In the Inland Empire, there’s this massive amount of warehouses and you see massive amounts of Amazon trucks going through here and to the rest of the U.S. 

It’s great to get a delivery at your doorstep. But it’s not great to see the black smoke going up in the air in those huge tufts in certain regions along this corridor. It’s not a great feeling to think about where it came from. … Amazon is careful, but you’re never sure: Was there forced labor involved with this product that was conveniently shipped to my door?  

Those things feel to me like sausage getting made. I didn’t want to know them, but the truth is, after knowing them, you can’t un-know them. Knowing enforces a different way to go about it. I think about it as forcing ethics and justice onto a simple decision that I didn’t have to think about in that way before. I see how doing a sustainability focus with what you’re doing, on pro-social behavior, fits in beautifully with this kind of thing. 

JEFF: Going through the literature, there’s not a lot in this area. There’s a lot of research gaps, which is interesting to me. In the supply chain, a lot of our research is done from a modeling perspective. So, it’s very warehouse-driven, supplier-management driven—almost B2B in a sense. We haven’t done a lot of good exploration in the B2C space. 

ANDREW: Can you translate that for everybody? 

JEFF: B2B is business-to-business. So that’s, for example, at Intel Corporation, where I worked for 18 years: We would sell something directly to Apple, and that’s a business-to-business transaction. We’d also have packaged, separate Core i7 processors that would be business-to-consumer, or B2C. So, most businesses have those types of models where they’ll sell to businesses and then they’ll sell to consumers. Same deal. So that’s the terminology there. …   

There’s been some research and exploration on it, but I’m finding a lot of gaps. Because in a supply chain, sometimes the consumer, it’s almost like, well, they’re not a problem anymore. We’ve made the pill, we made the pharmaceutical, and now it’s up to marketing and sales to go off and deliver it. But that’s not actually true. We actually do play a role in making sure that consumers have the right amount of pills and the right quality of pills. We have to make sure that if something gets out, that we contain it, that we have a reverse supply chain in place to be able to re-pull that inventory and find the problem, work with different transdisciplines like engineering and our pharmaceutical people who are in the actual business. The supply chain has to be engaged, and it has to be engaged at the strategic level.  

And that’s one of the big changes that’s happened with the discipline over the last 15–20 years. Supply chains, in the business world, have been put under finance or some general operations. Now, your supply chains are going up right to the C-suite level in business—so executives report directly to CEOs. That’s a big change that I’m seeing. … 

ANDREW: So, you’re talking about disciplines. Certainly, there’s a traditional siloization of all the different … not just in academic space, but also in … in any kind of business, you have your salespeople, your marketing people, your legal people, your compliance people … and a lot of them don’t traditionally, as I’ve known it, talk to each other. That’s where a lot of the issues come up. But sometimes they do talk and when they do, it all works much better.  

As you’re seeing people going through the future of this kind of education, or at least future supply chain managers … what other disciplinary languages or what disciplinary spaces do you think they’re going to need to cross into to be better at this job? Or to be more ready for this job as this future is unfolding? 

JEFF: That’s a great question. … Let me take a little bit from our class because our class had a mixture of doctoral students from different disciplines … and some of them now are very close friends of mine. So, evaluation and data analytics, industrial engineering, or engineering in general … you cannot … the supply chain—if left on to its own devices. … So let me back up. If you like sustainability, then you want to actually go into the supply chain. Do you want to make a difference? Go into supply chain management. I always joke that supply chains left alone will do a tremendous amount of damage to the world because supply chain management does not require a cost of goods sold to create profit. They can just cut corners or make things cheaper and offshore or have a different source and it goes directly off your operating costs directly to your bottom line. The old Jack Welch model: Six Sigma, lean-out your supply chains, make it all cheap. It’s very important for us to do that because if the supply chains are left alone, they tend to—if you think about some competitive priorities, let’s say cost, quality, speed, and flexibility as just general constructs—cost is going to be absolutely number one. From a top-down directive, it’s going to be cost.  

If you put too much cost pressure on your supply chain, then you trade off availability, warehousing capacity, and all these things you need, and you potentially create really bad problems in the world. If you’re not paying attention to your supply base, you’re not managing that whole relationship, so you eventually will run into somebody who will be trafficking, who will have child labor, who have a lot of horrible things going on at the beginning of that value chain.   

So, it’s important to talk to different disciplines because of the perspective that they can offer in terms of … we did an actor mapping class and that was helpful to see and connect with all the people and stakeholders who’re interested in accomplishing something, whether academically or in practice. For the supply chain, the absolute gold standard is a completely integrated enterprise, in which everybody’s talking to each other and sharing information. Of course, that’s not even close to reality. Reality is absolutely not … that’s what we pay consultants for.  

ANDREW: I do think that there’s a tradition of using consulting as kind of a transdisciplinary substitute. Wherever there is a silo and a chasm between, we bring in the people who know how to fill that chasm. It is itself an important industry, and I’m all for it. It’s all wonderful. Given that we’re seeing more chasms—because we have more connections—it’s like how we were talking about neurons. You get the neuron that’s releasing the neurotransmitter, and you also get the neuron that’s accepting the neurotransmitter, and then there’s a space between them. So that’s the synapse, essentially.  

We’re seeing more and more synapses between businesses and between businesses and consumers, which also means there’s more chasms to fill. One solution for that chasm is more consultants. So yes, consulting is a great way to go because we’re going to see more places where consultants are needed to make that synapse work or to fill that chasm. But another is to make people who are on one side of that process better at building the bridge themselves, those folks who think you’re going to have a real advantage. To translate this to an employment model: This is where the supply chain manager speaks a little engineering, they speak a little sustainability, they speak a little—give me something else here because I’m not in the supply chain field. 

JEFF: They speak everything, right? Not only that, but they’re going to have to understand all the business disciplines. You cannot get away from it. So, you have to understand finance, accounting, and engineering. AGI (artificial general intelligence) is going to be more prevalent as data just flows into this process. Money, materials, and information—it’s all part of that major flow going both directions, outward and inward.  

If you draw a model, it’s extremely important that with these trends, especially technological trends, we’re taking them into account, getting out of our desks, walking across to the people, stopping, and having conversations ahead of time. Because as you start to design your business strategy or your business model you need to be factoring these things in from a business perspective. The synapse is a great analogy. I’m completely going to steal that. 

ANDREW: Go for it, teach it in your class, and I’ll send you pictures so that you can get some good slides in there because I love bringing everything back to neuroscience. But you know, when you take a transdisciplinary approach, sometimes you start to see disciplines as something that exists beyond a set of tools in a content domain. Sometimes you see the culture of the discipline and sometimes you can see the customs and the habits and the assumptions of the discipline.  

So, before we started this conversation, I’m going to confess, I wanted to look up with just a simple Google search the term future of supply chain. One of the most interesting things I found was the number of times I saw the term future-proofing with supply chain. … Interestingly, at this institution, CGU, we’ve used this idea of future-proofing and I’ve always wondered where it came from. I’m curious if you’re familiar with this association. I am going somewhere with this, but first, I wanted to establish if this is news to you. Or is it something you’ve heard before as well? 

JEFF: I haven’t looked it up. And in what context did they talk about future-proofing from blockchain?  

ANDREW: What’s interesting is that everybody is using AI as this future-proofing concept. So, instead of saying to make the best-informed decisions with this hybrid intelligence or this artificial intelligence being a part of decision-making at this management level, it’s all about how not to screw up, given that AI is going to be really involved. I think that’s being called future-proofing, which, again, as a transdisciplinary approach, it doesn’t work like that. You’re gonna screw up. There’s no such thing as future-proofing. But there is certainly making yourself much more strategically aligned and much more … it’s future capacity building is what I would say, without getting myself into much trouble.  

JEFF: I do see that, the future-proofing. Where it’s going to be the most … is in forecasting. Forecasting is so critical to your supply chain. What we’re talking about even when you were mentioning the Amazon truck that goes to my door—that’s data that needs to be metrically driven and that’s called a last-mile delivery, when it goes to the truck and then it goes to your door. It’s called last-mile delivery, if anybody’s curious or heard that term before. 

Future-proofing the biggest anxieties of the supply chain involves not only forecasting, but also total cost and infrastructure. You can’t just go and offshore your manufacturing if you don’t have the right capabilities, infrastructure, etc. For example, Phoenix and the Phoenix area of Taiwan Semiconductor Manufacturing Company is building a $40 billion plant based on the CHIPS and Science Act.  

ANDREW: Can you explain that real quick? 

JEFF: Yes, the Taiwan Semiconductor Manufacturing Company is known as TSMC. It makes anything under 10 nanometers that we use. So, all the high—all the latest chips. There used to be a goal, known as Moore’s Law. It’s less of a law than a guideline that worked out to transistors doubling their power about every 18 months. At Intel, we really tried to keep that alive, because Gordon Moore was a founder. It was very important to us.  

But TSMC has taken it to the next level. What they do is they manufacture the silicon wafers, they take the designs, and then they manufacture the microprocessors, which get assembled and tested in other parts of the world. But that part of the manufacturing—the semiconductor capability—is so strategically important to every discipline in the United States. The United States used to have 37% of the manufacturing capacity for semiconductors. That’s down to 12%, as other countries ramp up, which is a strategic geopolitical issue for us, which is why the CHIPS and Science Act was passed in the first place.  

Because if you think about war, and you think about all of these … right now, Russia’s stripping the parts, the spare parts of any type of transistor to put them into their weapons. There’s all kinds of work going on in China. Obviously, we know Taiwan, that’s a real pressure point in the world right now. Moving TSMC into Arizona creates a geopolitical issue for Taiwan, from a protection standpoint. It also diversifies the United States economy, which is definitely what the CHIPS and Science Act is trying to accomplish, so that if we ever were cut off … by some war, we don’t necessarily suffer as much as we would if we’d have still been outsourcing so much of the assembly.  

When I say the assembly: You have semi-finished goods, assembly parts, they’re not the final finished goods that you’re taking home, like your iPhone, laptop, or PC. … Instead they’re all the raw materials and components that go into that supply chain. That’s what TSMC specializes in. They specialize in taking designs and creating very, very, very small transistors, which power everything that we use today. We’re very dependent on that for all the data, social media, and things that other disciplines are using. We definitely require that that manufacturing capability be in stable places.  

Going back to my infrastructure place and the reason Phoenix was picked—a lot of people get very confused about it. Well, location-wise, it’s very close to Los Angeles. But workforce planning, infrastructure, and all these long strategic things that you have to think about from a supply chain, they go way beyond just your discipline. You have to think about all disciplines and all potential things economically, business-wise, and in relation to the workforce. All those things have to factor into it. … 

ANDREW: That’s totally fascinating. It speaks to what we’re doing in this transdisciplinary program, the transdisciplinary analysis, but also to this geopolitical stage. We really want to know what’s going to happen in the future. There’s a big push on forecasting. One of the big lessons of forecasting is you can’t predict the future. In fact, you can’t really create the future, either.  

But you can influence which of the possible futures you’re more likely to end up in. The more proximal you are to it, the better idea you have of what’s going to happen. I think that sense, that timing sense that not everything is the past and that everything is the present, and that the future doesn’t have to be something that’s all with like … the humility of understanding the future isn’t within your control. It’s also not something that you won’t have a role in. That in-between space is super important for all of us to understand.  

One of the things I hope everybody starts to think about as a part of even a liberal arts education is this more nuanced understanding of our hyper-complex world, where something like COVID-19 can happen and more of these very global events will happen, that we still have a way of influencing futures as they move forward. You have to understand your agency in those ways and how to think about it all, how to prepare, and how to build capacity for change.  

I know in previous generations, there was a que será que será idea of “Yeah, who knows, the world might end tomorrow,” which is one way to look at it, but it’s not a helpful way to look at it. It also negates the notion that we do have a future-building capacity. … That capacity probably exists, very obviously, in the future of supply chains. But a lot of other disciplines haven’t caught on yet to the importance of this and the need to be future-facing. It doesn’t matter what discipline you’re in—every discipline needs to do this. I’m glad to see it’s so intentionally integrated in this form. I just keep getting more surprised by what you’re telling me about how interconnectivity is the basis for understanding this way of looking at and acting in the world. …  

JEFF: Absolutely. I think that’s where it has to go from a business standpoint. I’ve talked to you about this before. Even in business, we need to leverage futures thinking, knowledge capacity, and being able to work across multiple disciplines. So, for example, if I was going to put together a long-term forecast, which I know is going to be 100% wrong, because of what I’m going to use it for: It’s not going to be for a buy, it’s going to be for strategic things like how much capacity, how many new buildings, what brand-new materials and so on do we need to source and/or build? Do we need $500 million worth of equipment? Do we have to start working to build up that cash flow? …  

At Intel, we used to have futurists, and they would sit around without a business person on their team at all, maybe an economist occasionally. But it would be science fiction writers, playwrights, journalists, and members of a whole group of different disciplines, like musicians. They were doing this thinking about the world, to get some type of idea of where business might be trending, which is really an interesting exercise—but you don’t put an accountant on that team? They’re important!  

ANDREW: There could be futurist accountants! I think futurism taps into something that’s more celebrated in creative industries, i.e. that you have to use a little bit of imagination when you’re doing the forecasting … imagination doesn’t mean that it’s undisciplined. You could have disciplined imagination. You’re imagining different possible futures, and then the real rigor and discipline come when you say, “Now how do I get there?” It’s about trying to backtrack and self-cast into that space to understand where the institution or the organization is right now, and then getting as much data as you can to create one scenario over another, all while the stuff that you can’t plan for is happening.  

This is where I was going with the future-proofing idea. I have a hypothesis that the term future-proofing probably became more popular as a response to the COVID-19 pandemic. I don’t know if this is true or not, I did not do an N-gram search across Google to see if it spiked after 2020 or 2021. But I believe that it was such a massive disruption that we still haven’t really gotten a steady bearing back, that we still look at it all as something that was so discombobulating that the next time it comes around, we want to have a future-proof strategy so that it doesn’t disrupt us as much as that did. That’s my belief. I don’t know if that’s true. …  

JEFF: It’s actually true.  

ANDREW: But I think the industry that saw that the most was supply chain. I forgot about it. But I started to recall some of the basic micro-econ side of this, where we couldn’t buy a car because these plants had shut down and we couldn’t get masks at the very beginning of the pandemic. Now I’m still seeing news stories like this: I’m still hearing that IKEA is doing a big sale because—this is the stuff I care about because I moved not long ago—it had overproduced and things were stuck in the harbor in Los Angeles, San Pedro, and Long Beach because they were so backlogged from the pandemic that there were boats out there for months at a time with tons of cargo that had been occupying warehouses because there was no longer the consumer demand because we’re not all stuck at home anymore.  

We’re not just ordering things like we were. We found other solutions when we needed those things. Now there’s lots of extra furniture at IKEA. There’s lots of warehouses that don’t need the space anymore. There’s so many aftershocks in the basic consumer market that I can’t help but think that if there is something that’s on the spear’s tip or the cutting edge of where we’re going in this future forecasting, not even thinking of it as future-proofing—even though that’s clearly where people have gone with the AI idea—it’s that there are more sensitivities in the supply chain for listening to the hints of those futures than there are in other industries because supply-chain impacts are felt so robustly and for so long. 

JEFF: It certainly did get some visibility amid COVID-19 … in the United States, where the manufacturing base has really been hollowed out over the last several decades because of offshoring and outsourcing. Outsourcing itself is not a bad thing, it’s just a buy, you’re just buying something from somebody. But it’s really that offshoring, where it’s going somewhere far away like China … where you’re starting to see dual strategies, you’re starting to see things move into Vietnam. Mexico has a really good labor force, it’s upskilled, quite a bit in the last decade or so. But there’s just not as many people in those countries. 

As a result of that, we’re doing something called reshoring with all this manufacturing. You’re seeing it being built out, you’re seeing new plants in Ohio, you’re seeing a lot of activity in Texas and throughout the southwest, because of the relatively stable environments to go build and the really good infrastructure and proximity to ports. You’re really seeing that all over the place within the discipline itself. So, I agree with you.  

ANDREW: So, going back to your earlier example, do you think the movement of TSMC was also a response to COVID-19? Or was it something that happened independently of that? 

JEFF: I don’t have my iPhone with me. But if I hold up my iPhone, there are 9,000 individual components that make it up. Most of those components are sole-source. That means that you have one supplier, so you’re one failure away from creating a bottleneck. A lot of those hyper-competitive markets are in China. If you go look at the Port of LA, it’s like 17th, in terms of twenty-foot equivalent unit tonnage or even volume. Shanghai and Singapore are always in the top two. But there are several Chinese ports that are very heavily export ports … a large United States port like the Port of Long Beach, that’s an import port, mainly, and even some of the other ones like Savannah or New Orleans. … The repercussions of all the activities happening in the supply chain are driving a lot of these trends. With COVID-19 … we were running so lean, because of inventory and the way the supply chain looks at inventory and its costs. But there’s also opportunity cost. Inventory also covers up mistakes. If you ever mess up, you have enough inventory to replace it, but it costs money, and there’s the opportunity cost of it being stolen or obsolete, that right there is why our inventories are running so lean. The warehouse capacity was like 2% in LA off the port. That’s why you had a lot of those ships just sitting out there because there was no way. … It’s actually called intermodality. An intermodality is when you take something off the ship and place the container right onto a truck or train and it just goes on its way. You never touched the material. You also have multiple-modality, which is where they tear it apart, like they do at Amazon, and send it through. But that key piece of intermodality had gone away. Those ships sitting out there, that was very bad. There was stuff expiring, going bad, and becoming useless. It’s just wasted inventory, which tends to drive up a lot of cost structure for businesses, and they just pass it down to consumers like you and I.  

ANDREW: There’s two more areas I want to talk about. The first one is delving a little deeper into AI and the second is going a little deeper into sustainability. So, the first one on AI: It’s integrating and intercalating into everything, everywhere. From what little kind of playing around the Internet that I did, it seemed like the ad for what AI was going to do based on whatever consulting firm you tied up with or what software you were using, it was about how you had easier decisions to make as a manager because you were being given more clear choices based on “Is it an A, B, or C?” and also the ability to track trends a little bit more easily. Is that where you see it’s going? Can you describe it better than I just did? I’m coming at this as somebody who’s not a huge consumer of AI and I’m certainly not tuned into this future. I’m very interested in where you see unintended consequences from something like this.  

JEFF: That’s a really good one. I think there’s gonna be several unintended consequences. … I think we’re sitting right now in about 1994 in terms of where the Internet was. … If you remember this little thing called Y2K that freaked everybody out for a little while, all the crazy stuff. The Internet was not that great, for anybody who’s listening who’s younger than 30. It really wasn’t very good. The first time I saw it, I wasn’t really impressed. I was dead wrong. I admit that. And so, I think we’re more attuned to saying “OK, this got released…”  

We know Microsoft has invested very heavily in AI as well. I see it being integrated into a lot of the tools that we use today. So, in the next 2–3 years, I expect a lot of businesses to pop up based on AI. They’re going to be integrated into our social media, our phones, even the way we calculate spreadsheet cells, the ways we research, and how we position ourselves. Right now, we have LinkedIn sites, but I think that’s going to change.  

There’s going to be a lot of really good things that come out of it—like you’re saying, decision-making and scenario analysis, which is what you’re getting at when, if I have multiple scenarios, how can I potentially do the critical thinking and come up with the right answer. I think that’s a great use of AI. It’s also really great for ideation. You know, if you’re just playing around … I would type in “What would Ben Franklin think about if he showed up today and looked at a cruise ship?” It’d be amazing. And then he’d go back in time and tell Thomas Jefferson … you’d be amazed at what you get back from the output. So, it’s really all those inputs.  

However, you’re absolutely right: I also see a lot of really negative possibilities (just like we have with the Internet) translating over to AGI. I’m not talking about the Terminator coming and killing us someday. I’m talking about the things that human beings are going to put as inputs and the way that they’re going to be able to leverage AI to consolidate that data and do some terrible things that we all know are out there even today, whether that’s trafficking, exploitation, or stealing your bank account.  

It’s going to give … you’re not going to be able to tell the difference between a robo-caller and an AI-generated voice in five years. Our voices will be able to be completely faked. We could be saying things we never even said. We could be on a podcast or somebody’s podcast. They could take our voice, exchange it, and all of a sudden, people could use it. So, we have to be very careful. 

There’s a pillar of the internet that we’ve left unchecked, and that’s the security pillar. If you look at trends, look at how many data breaches happen every week, and how many millions of elements of data are just out there, that we’ve given away. I think AI is gonna be able to consolidate that and take advantage of it. There’s gonna be a lot of bad actors. Right now, we are sitting on the very brink and it has probably another 10 years before it really starts getting good.  

It still makes mistakes. I threw in an econometric model, and it could not give me the right answer. I knew the right answer and I had to guide it to get right to my regression. Then I threw in an economic model, and it completely got some of the … it’s not perfect yet. So, I highly caution taking it at face value. Yeah, it’s going to learn, it’s going to get better, and it’s going to grow. However, what I’m teaching my teens is to definitely get experienced with it, but be very careful with how much data you’re giving away, because the data is definitely going out there and it’s being used and leveraged. You’re gonna see it all integrated with Microsoft in a couple of years. 

ANDREW: I also wonder, having a kind of professional orientation to thinking in terms of interconnectivity and process and links in a chain: There are other parts to who you are, there’s stuff we haven’t covered today, there’s at least 350 degrees that we don’t know about Jeff Macias that I am curious tapping into a little bit.   

But I think all those things, all those knowledges that you have, are also reflective of how you can use your brain for somebody’s forecast or for building capacity for AI. So, as a person who thinks in interconnectivities because of the culture, customs, and tools of the supply chain, you can see unintended consequences, and possibly differently than someone else does because you’re seeing all the players at the same time. You think in terms of multi-industry rather than single-industry. You see what happens in human behavior where bad actors come in if they’re given a chance—because that will always happen. There are things you come to naturally, but there’s also other parts that feed into other intelligences that you have. I’m curious … what are some of those other knowledges that you think about when you are telling your own teens these kinds of things, or your own students in a class, or your close friends and family?  

JEFF: I’ll just confess a little bit (that’s part of my background as a Catholic growing up): I was not a very good high school student. I was very much an artsy, artistic type of person who liked to draw and write. I wasn’t unintelligent, I just didn’t really care. But when I got to the university, I really started to branch out in terms of my intellectual curiosity. I love … I’m left-handed. So, I think my right brain, for sure, is what drives a lot of my creativity and is the reason I read all the philosophical authors. One I could never get was Nietzsche, but a lot of the other ones like Locke … I really like to read history. So, I’m interested in historical patterns as well, in demographics and things like that.  


I also love being a parent. It’s a very enriching thing. I have two teenagers, they’re phenomenal. I have zero problems. I don’t understand other people “Oh, my teen is terrible.” They work really hard. But that right there, it’s an awesome responsibility. It’s so critical that I’m having these conversations with them. Because I started thinking, supply chain-wise, “Boy, they’re gonna get exposed to fentanyl at some point, because the precursor materials are coming in by a friend.” I’ve got to get on top of that as a parent. 

So, looking at the world from a holistic view, I also am very interested in philosophy. I love it. The Peter F. Drucker and Masatoshi Ito Graduate School of Management has a philosophy behind it. I was debating with a lot of people, “Does supply chain, or our discipline, even have a philosophy?” So, I started teaching a futuristic supply chain, kind of futures-driven supply chain lecture, called “supply chain philosophy” that just brings a lot of my life experiences into play and more thinking about, “Hey, what if we thought about 50 years from now? What if we thought about 100 years from now? What would we want our future to actually look like?” It’s not easy to do that. That’s something I really enjoy as well. It’s almost like you’re planting that fruit tree that you’ll never get to eat. Maybe 75 years from now, someone will say, “Our ancestors did it for us.” So, it’s all about becoming a great ancestor. I just really love stuff like that. 

ANDREW: I think that’s one of the things that I’ve had the most trouble swallowing in academia: That most of the benefits—the real benefits of academia—aren’t going to be witnessed by me. If I do a good job, it’s going to be 50 years from now when that comes to be. So, I gotta trust that what I’m doing is right, and get clues that we’re teaching toward a future.  

Because otherwise, I’m not making a widget. This is a different kind of production. This is co-creating, co-developing, and co-nurturing minds and ways of being. And what is interesting is that I was thinking about it all in terms of the supply chain because I remember when this was logistics. I am from Michigan. I remember when Michigan State had a program everybody was talking about with this kind of thing.  

JEFF: It’s a great logistics school.  

ANDREW: And I remember thinking like, “Who the heck would want to study that? It seems so specific and uninteresting. Why?” I think that there are generational and … there’s certain time periods in which we think of things in a particular way. So, the conversations that existed about the supply chain, when it was called logistics and other things, which I know makes up a part of the supply chain but isn’t the whole thing, in the 1980s, the 1990s, or even the very early 2000s… 

But then now, as I’m starting—because you got me interested in this—to pay attention to these conversations, sustainability comes in a lot. I’m hearing people, especially on the public-facing side of this … some of the first questions that come up are about that. I’ve heard so many people become cynical around this kind of ESG that’s in business. But the supply chain folks are taking it a little bit more, I don’t want to say seriously, but they’re more tangible about it. They have the empirical evidence to be like, “Here are our processes to limit the amount of damage that we’re creating … here are the best practices we’ve set forth.” There’s a lot of professional responsibility amongst supply chain folks. Can you speak to that? Because I find fascinating this culture that’s emerged, especially tangibly in this field in the more modern day, from—  

JEFF: From an ESG perspective, you’re very right to be skeptical. There is some definite marketing going on there.  

ANDREW: Can you explain the ESG thing also?  

JEFF: It stands for environmental, social, and governance (ESG). Really, what it has come out of is a lot of the bad decisions that the supply chain has made. I always joke around with my students, I’m like, “Hey if you like sustainability, get to know some supply chain people because I’ve never actually seen anything get done that supply chain didn’t have to execute on from a sustainability factor.” You want 100% reclaimed water? You need the supply chain. You want to make sure you don’t have conflict minerals, and you don’t have to slave labor? The supply chain has to go dig into it.  

So, you can produce all the pretty reports you want, with all the colors and the smiling faces. But it’s nothing more than an advertisement for a pill on the nightly news. You have to get that work done or march towards those metrics. And because supply chains do create a lot of these problems, because of the business environment of the 1980s and 1990s, now we‘re tasked, or supply chains are tasked, with unwinding and creating new processes to be able to make sure that, “Hey, we are more carbon-neutral by 2030, we can reclaim 100% of our water, we can ensure that we don’t have conflict minerals.”  

About 15–20 years ago, Nike was making their shoes with child labor, and that just blew up in their face completely. They had to work through their supply chain to stamp that out. It’s challenging because not everywhere in the United States or in other countries is on the same place on the industrial curve. They may be a more third-world or industrializing country, or they may be fully industrialized, like Sweden, Norway, or the United States.  

What it comes down to is the consumer demanding not to wear your gloves or take your product, or want something that’s going to make them feel horrible about themselves. It’s that whole pro-social behavior that I think this generation is much more in tune with.  

Let me give you a quick example: gemstones. If you talk to my mother, who’s a Baby Boomer—I don’t want to make sweeping generalizations, but if you talk to my mother, I’m probably pretty sure she would think that cubic zirconia is completely not like real diamonds. However, once you start talking to someone, and you explain to them all the horrible things that happened just to extract that diamond from the ground, then the way that they think can change suddenly. We’re seeing manufactured gemstones go up in price, as demand for them rises. Now we’re even seeing, as they’re being made, that their makers are trying to take the carbon being put into manufacturing—all the energy from the grid—out, to make it carbon-neutral from a sustainability perspective.   

Now, I don’t know all the manufacturing processes there. But it is changing the way that we are thinking about things like gemstones, shoes, and other products. That’s really what ESG is doing. It’s projecting out how the company is going to be pro-social and what its behaviors apply to, whether the environment, sustainability, or just how your workforce looks in terms of diversity and different disciplines, genders, and so on. And that’s really important as well because diversity of thought in business is not where it needs to be from a transdisciplinary perspective, which is one of the great things that I got from the class when we did our action map on the water crisis.  

Sustainability is actually being very highly driven by the consumer. The consumer is educated about things. They look at some of these sustainability reports or at least pay attention to them. They certainly will enact some customer revenge if they’re damaged at all in terms of what they’re wearing. If they find out that something was made by someone who was trafficked, they punish the company for it.   

ANDREW: It is interesting now to think about this and how the culture has changed enough that we don’t think of logistics per se as delivery to a customer. We think of it as more of a supply chain because there’s a bi-directionality to it. The customer talks back, and it’s not just in terms of consumer behavior, although that is certainly a part of it. But customer values are a thing that we didn’t care nearly as much about before. As those values are becoming more open and we have an exchange with them—I think that is one of the positive things that’s happened.  

I also would venture to say that being stuck during the COVID-19 pandemic has accelerated this a little bit. I’m going to go into another neuroscience example (sorry). You have one way of communicating that is synaptic. You have the little spaces in between neurons. But some neurons are actually right next to each other, almost like conjoined twins. They grow next to each other and there’s a little bit of extra protein machinery that lets them stay open between the two of them, so that what happens is like being a conjoined twin. What happens in one neuron is immediately experienced by another. And there’s a bunch of neurons in the brain that have this kind of thing. In some ways, you know, everything is a combination of a conjoined twin version of communication, or the synaptic version of communication that needs a little help to get across, sometimes. 

I think that the COVID-19 pandemic strengthened a little bit of this instantaneous, rapid spreading around the world of values-based information, where people really got on board very quickly with things. I think that that might be here for a while. I don’t think that that’s going away anytime soon because—they’re called gap junctions, by the way, instead of synapses—these gap junctions are like immediate information spreading across your brain. I think that that itself is another metaphor affecting our awareness and business decisions in a way that we didn’t use to take into account. We thought that it was all a much slower process, it didn’t need an immediate reactivity to it. But it has quite a bit of power to it. So, it’s defined generations like Gen Z or Millennials, where people now understand that that gap junction power can influence larger corporations, whereas before, corporations were the Titanic, they were so large that the individual voice didn’t really mean a whole lot. And in response to that— 

JEFF: You’re absolutely right. That’s a great metaphor.  

ANDREW: I’m here all week. My favorite thing to do is just talk about how everything is connected because I think that the universe is. Jeff, I have to say, it’s been such a fun time talking with you. I’m getting to know you a little bit more. Certainly, I’ve had fun going on this adventure of looking into the future, of seeing where we’ve been, and of making something that I used to think was a dry topic into something I find more interesting than I had ever given it credit for us. I want to thank you for your time and want to welcome you back any time you want to be a guest. Thank you. 

JEFF: Thank you for having me on the podcast. It’s been a pleasure, and I would be more than happy to come back. I appreciate it.  

ANDREW: Thanks for listening to this episode of PostNormal Times. Thanks to our guests, and thanks to our support from Claremont Graduate University. If you enjoyed boundary crossing with us and want to hear more, make sure you follow us, spread the word, and tune into our next episode.