Minimising the Effects of Black Swan Events in Technology

You never realise how fragile a supply chain can be until the links begin cracking. The last 18 months have been rocky to say the least, between COVID-19, the Suez Canal blockage, Brexit, and so many other ‘once-in-a-lifetime’ world events taking place in such a short amount of time the subsequent impact on the supply chain has caused major ripples throughout every industry.

The reverberations of these continued black swan events have manifested in material shortages such as silicone and fuel, price increases, and extended lead times for items that were previously widely available. But since black swan events by definition cannot be predicted, how can we as a collective move to mitigate the fallout?

Short-term solutions

If the pandemic has taught us anything it’s that a backup plan is a necessity when it comes to moving items along the chain of supply. Although the pandemic itself was unpredictable, having contingency plans for each stage of production and logistics will ensure steady lead times even during times of heightened pressure, but sometimes even a contingency plan can create further complications.

The disruption caused by the initial event can disperse and create other obstructive instances. You could spend hours hypothesising over the butterfly effect seen after an initial black swan event rocks the world, a prime example of which would be the Six Days War of 1967 that saw Egypt close their Suez Canal for eight years which lead to a rise in mega-ships – ships so large that they could counter the longer route around Africa by holding significantly more shipping containers, ships that in turn became too big for the canal they eventually went back to traversing; ships like the Ever Given, that could block the entire canal and cause $9.6 billion worth of supply chain disruptions throughout the globe.

Unfortunately, the financial burden of severe supply chain disruptions ultimately ends on the consumer. Many organisations opted to increase prices as a short-term solution to the fiscal domino effect seen as a result of black swan events. Hardware providers such as Cisco and HPE have either already raised or have plans to raise prices, and Arista confirmed that they are looking to increase the pricing on ‘’selective models’’ in 2022. But the price increases are just a financial remedy to a small aspect of a significantly larger issue, and the way in which we operate the entire supply chain from raw materials to end product may well need some adjustments.

Rethinking the supply chain

The linear economy has been a constant in the business world since the industrial revolution over 200 years ago, which exponential economic growth and improved living standards across the board. But with the positive change came a variety of negative side effects, some of which haven’t truly presented themselves until recently.

Aside from the harmful working conditions and long hours for working-class families, the industrial revolution was the tipping point for the expedited pollution levels that has snowballed into the fight against climate change today. Although overall the industrial revolution and linear economy have served us well, with the long-term side effects are creeping ever closer maybe it’s time to make a change.

Implementing a circular economy

The linear model is becoming vastly unsustainable and the impact on both environmental and economic climates has rendered them highly volatile environments, not only as a result of black swan events but also due to the constant depletion of raw materials. The only way to truly mitigate the situations which you cannot predict is to completely overhaul the system which enables such events to have such catastrophic consequences.

Engaging in a circular economy allows for consistent economic growth without risking logistics interruptions or abusing the planets natural resources, creating wealth and resources from pre-existing materials found in end-of-life and end-of-use products. The fewer stops a product must make along the supply chain the less likely it is to fall prey to any logistical hiccups along the way, be they human error or unprecedented incidents, meaning that the financial implications of such events are less likely to impact the end consumer - not to mention the subsequent decrease in fossil fuel consumption and CO2 emissions that will vastly improve the current climate situation.

Migrating from the historic linear economy to circular economy is no easy feat, but utilising and remodelling existing channels to centre around sustainability will enable businesses to operate in a greener and more sustainable fashion whilst removing a large portion of the costs accrued due to supply chain faults.

But the journey from linear to circular will be long, so what can we do in the meantime to avoid the complications caused by the last 18 months of ‘’once-in-a-lifetime’’ supply chain events that are predicted to rock the industry till 2023 and beyond?

Refresh to the rescue!

Some entities have already begun to engage in the practices seen in circular economy business models. Organisations such as Cisco have created extensive refurbishing and remanufacturing programs to aid in the fight against climate change and create a sustainable means of production that isn’t quite as dependant on the supply chain that is currently in flux.

Cisco Refresh offers a direct solution for the increased prices and long lead times seen as a result of supply chain complications, allowing customers access to refurbished cisco products that operate under the same cisco warranty that comes with a new product.

As a certified Cisco retailer, we offer authorised refurbished and remanufactured Cisco products that have been thoroughly tested by a team of Cisco experts, ensuring device and network safety and operating under the Cisco Refresh warranty.

Check out our online store or get in touch with one of our specialists and learn how Chulo can upgrade your network, at a fraction of the cost.