The zero-sum game is a situation where one party’s gain is entirely counter balanced by another party’s losses.

In the context of supply chain disruption, the zero-sum game applies where there are limited resources to address the disruption, and where one organisation’s efforts to mitigate the impact of the disruption on their own operations, results in those same resources being unavailable to other organisations. In this case, one organisation’s gain in maintaining or restoring their supply chain, effectively comes at the expense of others rendered unable to access those same finite resources.

Today’s relentless disruption, particularly in the case of ongoing supply shortage, continues to strike every aspect of our day-to-day existence and can feel entirely palpable across both our corporate and personal lives. Feels the very definition of a zero-sum game.

This enduringly volatile landscape where meaningful collaborative engagement is no longer merely about competitive advantage – for more and more people, and organisations, it’s a matter of existential importance.

It is encouraging to see that organisations are becoming more adept at collaborating inside their own operations. You can read more here on becoming customer of choice, and its path to lasting resilience.

At first glance we can see how organisations are approaching to mitigate their own positions:

• Diversifying suppliers: Having multiple suppliers for raw materials and critical components removes the risk created by having a single point of failure, thus reducing the risk of disruption from any one supplier.
• Stocking up inventory: Maintaining a buffer of critical components or raw materials can help an organisation weather disruption in the short term.
• Establishing contingency plans: Organisations can develop plans for how to respond to different types of disruptions, including identifying alternative sources of supply and ways to temporarily suspend, adjust or pivot operations.
• Collaborating with competitors: In some cases, it may be beneficial for organisations to work together with their competitors to address a supply chain disruption. For example, they may be able to pool resources and information to explore & expedite solutions.
• Investing in technology: To create more visibility promoting more resilient operations, organisations should consider investing in tech to help identify potential vulnerabilities, in turn executing strategies such as just-in-time manufacturing or lean production to reduce reliance on large inventories.

Let’s take a closer look at point 4 – Collaborating with the competition.

When all other options have been exhausted, perhaps all that’s left once an organisations own resources have been depleted is to turn to the competition.

There are a few examples of organisations doing just this:

• In 2011, when a tsunami and earthquake hit Japan, several automotive manufacturers (including Toyota, Honda, and Nissan) worked together to secure supplies of critical components that were in short supply.
• In 2018, following the collapse of Hanjin Shipping, the largest shipping company in South Korea, several of its competitors (including Maersk & MSC and the 2M Alliance) worked together to help move stranded Hanjin vessels and cargo to their final destinations.
• In 2020, during the COVID-19 pandemic, suppliers in the pharmaceutical industry collaborated to ensure a stable supply of raw materials and to increase production of essential items such as hand sanitizer and personal protective equipment (PPE).

Collaboration with competitors is not always easy, it naturally feels counter-intuitive, and it can give rise to concerns about antitrust laws and of potentially revealing sensitive information to rivals. However, in situations where the disruption affects many people, or organisations, and there are limited resources or solutions available, collaboration may be the most effective way to maximise damage limitation, minimise the overall possibly of disruption, possibly even of global impact.

Consider this, where global indiscriminate disruption is ultimately caused by natural disaster [or by unnatural disaster] such as climate change, should the question in fact be: how does supply chain negate the zero-sum game?

The point is, there are clearly certain challenges that can only be addressed and overcome by co-operating or better still collaborating outside of one’s own operation or immediate sphere of influence.

So how do we see beyond the zero-sum game? How can we all win?  

Sometimes to win, the way is either not to play at all, or where the landscape seismically alters, to level the playing field by changing the rules! Where insofar it becomes possible for all parties to win. One way this can happen as we’ve seen, is through negotiation, collaboration and compromise, where all parties are able to find mutually beneficial solutions that allow them to meet their own goals as well as those of their otherwise competitors.

Where climate change is concerned, the rules of the game need to be re-written to accommodate and encourage all parties to work together to find solutions to address all of their joint and several obligations and requirements.

Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth, Arthur Conan Doyle.

Supply chain must eventually see beyond the zero-sum game. Collaboration beyond an organisation’s own operation will negate rather than mitigate the zero-sum game, for everyone. So long as there are winners and losers, sadly, there will never be real change.