Supply chains have been hit hard since the start of the Coronavirus pandemic. It was largely believed to be fueled by the trucking industry’s inability to keep drivers on the road as the pandemic impacted its workforce. Trucking companies had to increase wages, which ultimately lured drivers back. However this has not resolved the problem.
Today, supply chains are facing another problem: the shortage of trucks. Trucking companies are now scrambling to solve this new problem by paying significantly higher prices for trucks.
But what if they’re solving the wrong problem?
New research from David Correll at the MIT Center for Transportation and Logistics is showing that “trucker detention time” – “the unpaid time drivers spend at warehouses waiting to be loaded and unloaded” has caused major supply chain bottlenecks.
Correll analyzed how thousands of truck drivers spent their time and learned that many drivers spent an average of 6.5 hours a day on the road, or 40% less time than the legally allowed 11 hours. Drivers lose much of their time to “detention at warehouses.”
Essentially, when drivers get to a warehouse, they are told the goods are not yet ready for pickup and so they must wait. Much of this wait time is unpaid.
Correll notes that the current situation is not “a headcount shortage of drivers, but rather an endemic undervaluing of our American truck drivers’ time… Forty percent of America’s trucking capacity is left on the table every day.”
If Correll is right, then no amount of new drivers, and now trucks, will solve the problem. In fact, without fixing the actual root cause, adding more drivers and trucks to the system might exacerbate the problem.
Major global development players have tried to solve the global poverty problem in a similar way. By simply adding resources.
Poverty is a seemingly intractable problem that almost always shows itself as a lack of resources. Go to a poor country and you see the lack of good schools, operational hospitals, working infrastructure, well-functioning institutions, and so on.
The proposed solutions are often to provide the lacking resource. Where there are no schools, new ones are built; where hospitals struggle, equipment is supplied; and where there are no roads, new ones are developed. But this strategy, which dates back to the beginning of the development industry, is not working.
Not only is it difficult to fund and sustain, but it can also leave communities worse off. Providing more and more resources will not lead to an end to poverty, much less create prosperity across the world.
Considering the problem through a different lens could help.
Today, poverty is analyzed primarily through the lens of resources. Resources represent things like cash, intellectual property, human capital, infrastructure stock, and so on. The more resources a country has, the more prosperous it is, and vice versa. And so, the thinking goes, the solution to poverty must be an influx of new resources to poor countries.
But poverty isn’t simply a resource problem. It is also about processes.
Processes represent the patterns of interaction, coordination, communication, and decision making through which people, organizations, and countries transform inputs of resources into products and services of greater value.
For example, it is clear that the existing detention time is a bottleneck-creating process in the supply chain industry. The lack of trucks and drivers aren’t helping, but even if those problems are solved–expensively–issues will likely persist.
By understanding how processes impact the utilization of resources, organizations can make better decisions about the problems they face. Resources are important. But processes that transform resources to solutions of greater value are far more important.
What if, instead of focusing on what poor countries lack and then trying to provide them with more and more resources, development organizations did the difficult work of understanding the underlying processes that hindered progress? We might just find out that we need fewer resources once we figure out a better way of utilizing what we have.