Every day we take the benefits from global networks and optimized supply chains for granted. New products become cheaper and more available. Seasonal produce such as strawberries are shipped from around the world and are available year round. Companies can expand their businesses across the globe. Products are assembled leveraging the resources provided by a global supply network.

Rarely however do we think about the risks also associated with these larger and more connected networks. A recent cover story “Will a pandemic bring down civilisation?” the magazine New Scientist explored some non-obvious risks to interconnected networks [1]. It argues that these new global networks that are “ever more intricate and finely tuned” result in greater risks to the collapse of civilization in the event of pandemics or disease outbreaks. The article also presents the results of complex systems analysis in relation to historical events showing how complex networks are more vulnerable to losing unique or key nodes.

Longer Supply Chains:

A surprising paradox is that the increasing sophistication of and efficiency of many supply chains make them more susceptible to disruption when unusual circumstances arise. One of the triumphs of modern supply chains and the focus of operations research experts is just-in-time delivery. That is when companies try not to stockpile inventory anywhere. Instead companies attempt to produce and deliver goods only when and where needed.

Just in time delivery now means that cities have only three to four days of food. Power plants have only 20 days of coal on hand. Hospitals have only enough oxygen and medical supplies for a few days when they will be needed most to contain the outbreak of disease. All these services could cease to function rapidly if the transportation network were to operate at reduced efficiency.

Longer thinner supply chains are being created by the drive toward profitability which once again make the entire system more vulnerable to disruption. Produce and food are shipped across countries and even hemispheres. 85% of US medications today are manufactured abroad.

Interdependent Networks:

What is even more worrying and often overlooked by disaster planners is the many interdependencies between networks which can result in cascading failures. The key infrastructure networks for food, water, electricity, energy and telecom are all interdependent and vital to the functioning of modern economies. Failures in one network can impair the function of another network. Failures can cascade across unrelated networks in a vicious cycle.

Should the electrical generator or the distribution grid fail for an extended period of time from a pandemic, the results could be very difficult to reverse. That the electrical grid could fail under the stress of a pandemic does not seem all that unlikely given the multi-day Northeast Blackout of 2003 [2]. A small disruption somewhere on the system resulted in a cascading series of failures that cut electricity supply to 1/7 of the US population. Given that the US grid failed under such benign conditions does not inspire confidence in its reliability when irregular behavior is occurring throughout the network. Given that natural gas pipelines, coal production and water distribution all depend on electricity, problems can easily cascade. Furthermore, without coal or natural gas, the electric utilities may find themselves without baseload generation.

A concern particular to the United States and to a lesser extent other developed economies is their dependence on automotive travel. The nearest grocery store is typically many miles away in suburbs. Furthermore, the food on the shelves often is produced and packaged thousands of miles away. Thus the modern economy is much more vulnerable to collapse than the traditional subsistence economy where food was grown, processed and consumed locally.

Some of these concerns with the transportation network showed themselves during a 10 day strike in the UK when truckers prevented delivers from the countries refineries. Stores began to run out of food and hospitals were forced into reduced operation. Even public transportation was affected when it was most needed with some train and bus services begin cut. Similar disruptions to the transportation network are likely during a pandemic if truckers, afraid of infection, avoid work.

Another vital network is the network of people and employees which is the ultimately the network that matters in the end. Companies are especially at risk to missing people with specialized skills. Without employees all other networks will eventually fail. This is particularly disconcerting since people would be reluctant to go to work if a contagious disease is on the lose. Even after the outbreak passes, the death of hub individuals in the network can be difficult to replace. A key finding from complex systems research is that the random loss of nodes, as may occur during an epidemic, is much more significant in complex systems than in simpler system. The New Scientist article relates this concept to two major outbreaks of plague and their impact. It describes how the plague outbreak in AD 170 started an unraveling of the Roman Empire which like modern society was characterized by large dependent urban populations and complex organizational structures. On the other hand, the outbreak in 1348 in Middle Ages also killed a third of the population but did not change the characteristics of the network. The feudal system remained largely as it was before.

What can be done:

The stability of a system under stress is an externality that is often not considered when systems are constructed. Especially since many of these networks grow organically as a result of decisions by many independent actors, each with different objectives. Network stability can be viewed as an externality because there is a payoff to society in terms of increased or decreased risks that are not bore by the adopter of a technology.

What is lost in the profit maximizing objectives of individuals and companies are any considerations of their impact on the overall network. Many modern business optimizations such as lean operations and global supply lines make the network more efficient when everything functions smoothly but more prone to failure in difficult times. On the other hand, certain new technologies allow for decentralization and can have positive effects on stability. The stability of global economic networks can be improved by ensuring the security of key infrastructure and promoting the use of local sourcing and distributed generation.

Obviously steps can be taken to improve the reliability of infrastructure. Infrastructure like water supply are publicly owned, and hence policies to stockpile supplies and plan for contingencies would help. Other parts of the crucial infrastructure however are private and regulations may be require mandated a minimum levels of disaster preparedness. Electric utilities, for example, should stockpile enough fuel and supplies to ensure a reliable power supply for weeks to months regardless of the condition of the transportation networks or of staff shortages.

Certain green technologies such as solar panels and wind turbies are promising because of their positive externalities. These externalities not only include environmental effects but they can improve the stability of economic networks. On a geopolitical level, alternative energy reduces dependencies on foreign energy suppliers. Many European nations realized this after their natural gas supply was twice cut off by Russia in disputes with Ukraine [3].

Decentralized production and local generation can reduce the stress on the electric grid and ensure that some parts of the network will be operational even if the grid goes down. Efforts to install solar PV across whole neighborhoods as in California can be especially effective since the whole neighborhood will remain functional, creating an island of stability [4]. Even with this technology there are big differences in the externalities based on how and where it is installed. Installing at the source of demand rather than in a remote desert location, California reduced its grid dependence. It is important that the externalities of technologies such as power generation be considered with regard to network stability in addition to their direct costs.

Applying this grid independent power makes even more sense in helping secure the operation of crucial infrastructure. Powering cell phone towers with solar/wind power instead of grid power or diesel generators can improve uptime and cut dependencies [5]. Using solar power at server farms and telecom switches can help ensure that parts of the vital internet and communications backbones will remain operational.

A recent trend toward local sourcing of food is also promising in reducing the length of supply chains and the number of things that could disrupt them. Hydroponics technology some of which as been developed at Cornell also has the promise of shorting the supply chain the reducing the risk of disruptions [6].

Keeping social networks and the human network operational will be another priority. In addition to disease containment measures, having sufficient supplies on hand can make difficult situations more manageable. The New Scientist article talks about how the supply of surgical masks to slow the spread of SARS nearly ran out in the course of the short outbreak in Toronto. Obviously governments should consider having stockpiles of medical supplies such as masks, antibiotics and antiviral drugs on hand. Convincing individuals to have emergency supplies at home is another important part of the plan. These supplies can help reduce the impact of panic buying on just-in-time supply chains.

Conclusion:

While we are not going to reverse some trends like just-in-time delivery, globalization or interdependence, steps can be taken to improve the reliability of critical infrastructure networks such the electric grid. Ensuring the reliability of key networks can help prevent failures from cascading to other networks and greatly increase the stability of the overall system. The examples cited in the New Scientist highlight the importance of seeing disaster planning from a networks perspective taking into account interactions rather than looking at each system in isolation. Network stability is an externality that should be considered when comparing technologies. Newer technologies that allow for distributed and local production can improve stability. Complex global networks will never be fail-safe, but hopefully they can be made more resilient and self-correcting by reducing the interdependence between the various components and geographies.

[1] MacKenzie, Debora. “Will a Pandemic Bring Down Civilization?” New Scientist. April 05, 2008 http://www.newscientist.com/channel/being-human/mg19826501.400-will-a-pandemic-bring-down-civilisation.html

[2] Northeast Blackout of 2003. Wikipedia.
http://en.wikipedia.org/wiki/2003_North_America_blackout

[3] Russia-Ukraine Gas Dispute. Wikipedia.
http://en.wikipedia.org/wiki/Russia-Ukraine_gas_dispute

[4] “Southern California Edison Lauches Nation’s Largest Solar Panel Installation.” March 28, 2008. Edison International. http://www.edison.com/pressroom/pr.asp?id=7002

[5] “Should Cell Phone Towers Have Backup Power?”
http://technocrat.net/d/2008/3/13/37575

[6] “Challenge Industries begins operation of Cornell Hydroponics Facility.” CALS News Archive. September 7, 2005 http://www.cals.cornell.edu/cals/public/comm/news/archive/lettuce-prag.cfm