Some Passing Thoughts on Supply Chain Vulnerability

Shortages in the United Kingdom are providing plentiful ammunition for many critics with an axe to grind. Brexit opponents were quick to lay the blame directly upon Great Britain’s departure from the European Union. Anti-Globalization activists have pointed out the dangerous vulnerability of Just-In-Time supply chains. Then there is COVID-19 where we are seeing the anti-vax and pro-mandate camps slinging blame for the shortages at each other.

The fact of the matter is we’re in a perfect storm of conditions and circumstances at present. COVID restrictions and mandates, post-Brexit teething issues and supply chain disruptions in other parts of the world have combined and brought chaos to the United Kingdom and other nations. It will be some time before normal conditions return. Even though the UK is receiving the lion’s share of media attention for its fuel and food shortages it is not the only one dealing with shortages. In the United States, most major ports are dealing with extreme congestion. Dozens of merchant vessels sit at anchor off places like Long Beach, Elizabeth, and Dundalk, waiting for extended periods of time to enter and unload. This has resulted in a growing number of shortages across a wide range of sectors in the US. Panic buying has exacerbated the situation as well.

Under normal conditions, Just-In-Time supply chains work efficiently. In short, JIT is an inventory management strategy designed to guarantee fast order fulfillment. Production starts only when an order is placed, and inventory stock shipped out as needed. The onset of the pandemic changed the dynamic markedly. Restrictions, shutdowns, and a growing shortage of workers has plagued Asia where much of the manufacturing is done. This was Patient Zero for the current disruptions, for lack of a better term. 

Modern supply chains were neither designed or intended to weather a storm of conditions like the one we are seeing. Supply chains were not built for this.  Their vulnerabilities have now been made abundantly clear and systematic changes are most certainly on the horizon. Before that time arrives, though, the current storm needs to be handled.

AUGUST 2021 DIRT PROJECT: NORTH KOREAN COLLAPSE SCENARIOS Part I

In the 21st Century, North Korea has demonstrated an almost uncanny ability to always land on its feet no matter the challenge faced. This has especially held true since 2011 and the death of Kim Jong Il. The ascension of his son Kim Jong Un to the position of Dear Respected Leader led to a wave of warnings from analysts and observers around the world forecasting an imminent collapse of North Korea ‘in the near future.’ These predictions have become commonplace ever since, popping to the surface in the wake of North Korean nuclear tests or reports of worsening conditions inside of the country. It’s fair to say the North, and Kim have dodged a number of bullets over the last ten years. To the point where it would appear North Korea has nine lives. Saber rattling, economic downturns, food shortages and political crises have been cited as events which could lead to a collapse. The North has weathered all of these at one point or another, sometimes in rapid secession.

There are multiple entrants from that pool of crises in play at the present time, creating an unprecedented, ambiguous dynamic. As well as a new one: Global pandemic. Despite official claims coming out of Pyongyang, COVID-19 did land in North Korea at some point. The spread of cases in the past year, and the course of action taken by the North Korean government to combat it has certainly led to a more unpredictable situation for the hermit kingdom. COVID forced lockdowns and borders to be closed, which led to an increase in economic hardship and food shortages. Continued UN sanctions have also played a role, as has the rash of typhoons the North has experienced in the past two years. The end result has been a North Korea sagging deeper into crisis.

As a rule, North Korean leaders never openly reveal hints about problems the nation is dealing with unless the situation is approaching dire status. Thrice this year, Kim has spoken publicly about the situation in the North, even going as far as making comparisons to conditions in the late 1990s at the height of the North Korean Famine. Naturally, this has brought about questions and concerns about how bad conditions in the North are and might become in the near future. Regional analysts are attempting to downplay the crisis North Korea is facing, pointing out that conditions are not as bad as in the 1990s and predicting China will do what is necessary economically to keep the country afloat and stable. In fact, China and North Korea are expected to resume cargo train service later this month. A positive development to be certain, but one that might not become reality at all, or if it does, may not have the impact anticipated.

So, this is the situation facing North Korea at present. Certainly enough to bring on a national collapse under certain circumstances. While the North has an admirable track record when it comes to getting itself out of tight spots, nothing lasts forever. Eventually, Kim and company will find itself in a position it cannot extricate itself from. That could occur in the next month, or years down the line. The point of this month’s project is to examine how a North Korean collapse can come about in the near future. In the next project entry next weekend, we’ll discuss why a North Korean collapse is considered a nightmare scenario by so many. Specific collapse scenarios will also be discussed briefly and then in depth later in August.

At Victory Day Celebration Kim Jong Un Compares The Effect Of The COVID-19 Pandemic To The Korean War

As North Korea celebrates Victory Day, the 68th anniversary of the Korean War, its leader Kim Jong Il appears to be girding the nation, as well as the rest of the world indirectly, for what might lay ahead. At an address made before thousands of North Korean citizens Kim compared the global pandemic’s effect on the country to what it experienced during the war years of the early 1950s.  “We are faced with difficulties and hardship caused by the unprecedented global health crisis and prolonged lockdown no less challenging than how it was during the war.” He then went on to assure the populace that the future will bring better days. “Just like the generation of victors… our generation will continue this beautiful tradition and turn this difficult decisive period into an even greater new victory.”

In recent months, Kim Jong Un has not shied away from pointing out the urgency of the current situation for North Korea. As was the case yesterday, he has used his speeches to acknowledge the situation in his country. Part of this has stemmed from a desire to prepare the populace for more stringent times ahead. Along with this, Kim is also attempting to warn the world that without the suspension of economic sanctions North Korea faces a tumultuous future which could hold ramifications for the rest of the world.

South Korea has recognized the writing on the wall and extended an olive branch to Pyongyang. On Tuesday, Seoul announced that the Koreas have agreed to restore inter-Korea communications channels as the first step towards improving relations. Observers believe the North is also maneuvering to use the move as a stepping-stone to obtain aid to deal with COVID-19. In the past, the South Korea has expressed a willingness to provide vaccines to North Korea if requested. No such request has come from Pyongyang yet. However, with Kim likening current conditions in his country to what they were at the height of the Korean War, it might only be a matter of time before he reaches out.

Late July/August 2021 DIRT Project: North Korean Collapse Scenarios

Here we go again. Internal conditions in North Korea seem to be deteriorating at an accelerating pace. Every day the news reports become more disquieting; Food shortages, veiled warnings of a pandemic-related ‘Great Crisis’ by Kim Jong Un and an increasing number of foreign diplomats leaving Pyongyang every week. The picture being painted inspires neither confidence or hope about the North Korean government’s ability to stabilize conditions before it is too late. Now, predictions of an imminent North Korean collapse are making headway online….again.

We’ve been down this road before. The domestic situation in North Korea takes a turn for the worse, or Kim disappears from public view for an extended period. The media runs with it from there and starts loudly warning of a coming North Korean collapse. After a week or two, the hype disappears and North Korea muddles through yet another crisis that was supposed to sink it once and for all.

This time around, the situation in the North does appear to be more critical than it has in the past. However, looks can be deceiving. Either way, now is a good time to look at the potential scenarios that could emerge from a North Korean collapse. Unfortunately, doing so within the span of a 300-400 word entries is next to impossible. So, later on in the week I will post the first in a series of entries examining how a North Korean collapse might look in the near future. Right now, I’m thinking about 3-4 entries spread out over the next 5 weeks or so. Barring the appearance of a major crisis or pop-up conflict, of course. 😊

North Korea’s Food Shortage Is At The Crisis Stage

North Korea’s food shortages are fast approaching the crisis level. Food totals for this year look to be short by 850,000 tons, an amount that equates to two months of demand. So, in this regard the math is quite simple. The government has been surreptitiously warning about a possible shortage for months and encouraging the population to grow its own food. This effort has not been successful and there are now reports of starvation deaths emerging from non-government sources inside North Korea. The state’s food rationing system has collapsed under the strain imposed by the food shortages as well as the COVID-19 pandemic.

With a humanitarian crisis all but assured, North Korea can count on little help from the international community for the time being. Sanctions, COVID and a border that has been closed for an extended period of time have produced an environment that is unconducive for international relief organizations to operate in. Security is also tightening across North Korea as conditions deteriorate. There has been a hard crackdown in border regions to prevent smuggling activities and defections. Food hoarding is another crime which the government is trying to stop. Citizens caught hoarding food will face execution now, according to media sources familiar with the internal situation in North Korea.

The security measures are indicative of a government desperately attempting to keep its country together. Kim Jong Un and his inner circle are keenly aware of how far out on a limb North Korea is right now. The food shortage is just the latest in a series of setbacks and crises in the previous eighteen months. From the pandemic to this food shortage, time could be running out for Kim and his regime. A potential North Korean collapse is one of those nightmare scenarios that could provide the spark for a regional conflict or worse. But unless the situation in the North improves markedly between now and the end of the year, we could very well be looking at an inevitable collapse.