A Meditation on Supply Chains and Adding Real Value in the World

It seems suspect for goods that cost pennies to manufacture should be sold to the end consumer for sometimes 10-20 times their cost.

For a long time I’ve been concerned and even worried about the many “middle men” between factories and consumers, and the costs that this incurs all along the way. As an industrial designer, I’ve seen it first-hand.
It seems suspect for goods that cost pennies to manufacture should be sold to the end consumer for sometimes 10-20 times their cost. A bottle of lotion, for example, might cost 30 cents to manufacture, but is sold at retail for $7. Is this a good thing?
The reason the systems is like this today is because of all the different hands the goods have had to traditionally go through to get to the destination – from the factory to suppliers/brands, then distributors, then retailers, and then to you (sometimes requiring many different shippers in-between them all). Historically all these hands were necessary in order to get the goods to the destination. The world was a big place, and it took many people to move the goods from here to there.
Times are changing. The world is getting smaller and smaller every day, and flatter and flatter (as Thomas Friedman put it), even within the last few decades. The Internet is only about 25 years old. Globalization is radically changing the marketplace. These middle men often add little to no value to the product, particularly in commodities, and are usually just selling the product to the next person along the chain. It doesn’t seem like it has to be this way today. The “middle men” are getting cut out of the chain.
Amazon is a good example of this. They are beginning to go direct to the brands, and even to the factories to get their goods, and sell them directly to the end consumer. They are bypassing suppliers, distributors, retailers, and are even starting to ship their own goods. And they are taking over the retail world. Alibaba is about to eat their lunch, especially if they can solve the shipping question (which is why Amazon is currently laser focused on short shipping times). Local manufacturing of goods with most of it automated is going to be a big deal in the next 5-10 years.
There is now a Kickstarter campaign called Public Goods that wants to do something similar with simple personal care products. They want to manufacture the goods themselves and sell them at cost to consumers, for a monthly/yearly membership fee or subscription, potentially saving consumers thousands of dollars. It seems like this is the model of the future. This Kickstarter campaign has, as of the time of this writing, made over $562k in backing with 53 hours left.
As a designer, I understand that those who are higher in the food chain should get a share of the profits, but only if they add real value. Designers and design firms, for example, should be compensated for the work they do to design and develop products that look great, function great, are safe and reliable, and that come up with new ideas that help make the world a better place. I also believe that there are good companies working to help transport products around the world. There is also something to be said for marketing companies that help get the word out about about these products, and spread knowledge of them to the general population. But there are also many in the supply chain that are simply buying the product and marking it up 40-50% and reselling it to the next guy, and doing little to nothing to add value in the process. That’s where I have the most concern.
Why should products pass through these unnecessary hands that just add tremendous costs, even compounding the costs exponentially? I don’t think they need to. And the sooner we realize that the world is small and “flat,” the better positioned we’ll be to actually add value to the products we make and sell in the world, to be a contributor, rather than taker. There is little reason, I feel, a local retailer should be making over 20x more on goods than it costs to make those goods. This model seems outdated, inefficient, greedy, selfish, and is in the process of being replaced. In many cases it grinds on the faces of the poor who can’t afford even simple commodity goods because they cost too much. People can’t afford to live, even working full-time, even with second and third jobs. And no, they can’t all afford to go back to school to all become computer scientists or engineers. That’s not going to work either.
It seems to be a broken system that is being redesigned right now. We’re seeing it play out right now. How are we going to feed the next billion people? How are we going to educate them? What are these billion going to do during the day? What are our kids going to do when they are our age? We need to radically think through these things now, and develop the tools, systems, infrastructures, regulations, and yes, even economic safety nets and social structures, to make sure that we don’t end up with a few people sitting in their corner offices making a million times the amount that the million people under them are that are doing hard work. This is becoming more the reality each and every day. We need to rethink what humans do every day, what are we good for, what is the value of a human, and how can we cherish that value?
For me, the value of human life is Infinite, each and every one. The value of other sentient life is Infinite, each and every one. The value of our planet is Infinite, all of it, and we need to take extreme care in how we treat it and use the resources around us. Because it is us. We are the world. Look out the window now, and you’ll see yourself in every tree, in every blade of grass, in every person that walks by. That is you. You are that! If you don’t believe it, I recommend sitting for enough hours in silent meditation and/or contemplation/prayer until you come to know it. I know it. Now what should we do for That? What should we do for our Self? How can we love this Self, and love all others as our Self? For this is the way to true enduring happiness.
What are your thoughts? Is the current system broken? How is it broken? How is it being replaced? What should it be replaced with? How can we add real value and be a real contributor to the process? How can we be a force for good in the world, and not just another cog in the machine, taking a big bite out of the pie but not doing our fair share of the work?

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