Global Supply Chains: A Buddhist Perspective
Buddhist philosophy has had a powerful impact on the Western psyche since its importation became a trend in the 1960s. It can take many forms. It can be a set of psychological tools for interrupting negative thought patterns and cultivating healing. It can be a set of complex rituals that basically become a religion. It can also be a powerful training in deconstructing stories to pierce through to a deeper reality.
It is the latter facet that is worth applying to the supply chains in the globalized economy.
To deconstruct a story is to pull apart the different threads that weave together what we hold to be correct. This deconstruction is most powerful through the lens of what Thic Nat Han calls “interbeing” — the sense that we are inextricably connected to all other human beings. Three stories are braided together to form the foundational choice in supply chain management: insourcing, outsourcing, and offshoring. It is worth deconstructing these so that socially responsible innovations can come to light, ones that honor our humanistic interbeing.
Insourcing, the story goes, is when a company protects its proprietary assets by controlling all aspects of the supply chain.
While this can maximize transaction cost efficiency, it can also be more expensive depending on location and other factors. Harley Davidson was once a perfect example of this, manufacturing their motorcycles in its own factories, every nut and bolt examined by Harley Davidson employees. To deconstruct the story means to question the need for control, if the cost is actually higher, and how this all impacts the human beings involved.
Outsourcing’s story is one that has been highly played out in the past 30 years of globalization.
It dictates the strategic advantage of different stages of the supply chain located wherever the cheapest, most efficient and technologically advanced options exist. This often happens as the company grows, or when new costs are introduced, such as when Harley Davidson decided in 2018 to outsource more of its manufacturing to foreign facilities.What time frame is being considered? How will the dependency on external partners be managed? Do environmental costs increase or decrease with the move? What plans are in place to monitor human rights?
Offshoring is a hybrid story, wherein a company hedges operationally by owning phases of the supply chain that are geographically distant.
This is often to avoid international trade costs or increase proximity to new customers. Harley built and runs a plant in Thailand, in an attempt to be closer to its growing South Asia market. Here, the questions are around the motivation for a global presence: What are the qualitative considerations that don’t show up on a NPV calculation such as branding and environmental impact? Are there ways to respect local cultures by hiring regional leadership?
The Buddhist perspective helps to deconstruct decisions like these about supply chain management so that they are made with human beings, not just numbers, in mind.
What is it that makes wages so much cheaper in certain places than others? If a company is outsourcing because the parts are cheaper from elsewhere, what due diligence has been taken to examine the reasons for that cost saving? What about the environmental impacts of moving things around internationally? Is that accounted for in the financial analysis? By taking the time to reflect on different stories involved in business decisions, there must surely be new paths forward to socially responsible innovation. Buddhist psychology shows that writing new stories, while difficult, can be rewarding and groundbreaking.
NOTE: I am by no means an expert on Buddhist philosophy. I have practiced and studied meditation for over eight years, and spent 3 of those years under the intensive tutelage of a Tibetan Buddhist master teacher. However, these opinions are my own. In other words, deconstruct my article :)
