Matt Andrews
Product Manager ・ Software Engineer ・ IE Executive MBA Graduate ・ Tokyo Resident ・ 会说汉语

Antifragile Supply Chains Pecha Kucha

To give you a flavour of the sort of work I had to produce for my MBA, here is one fun and interesting assignment from my Supply Chain Management class: introduce Antifragility and apply it to the topic of Supply Chains through a Pecha Kucha-style presentation.

A Pecha Kucha presentation is a form of lightning talk made by a 20 slide presentation, 20 seconds per slide. I was assigned the topic of antifragility, promoted by Nassim Nicholas Taleb.

Please enjoy the video (or read the text) below …

Transcript

Konnichiwa S1! (S1 is our class group name)

Welcome to my Pecha Kucha on Antifragile Supply chains. Or, whatever doesn’t kill you makes you stronger. Today we’re going to learn how Netflix and others build their businesses by trying to destroy themselves.


So firstly, what is antifragile? Antifragile is a made-up word that has the opposite meaning of fragile. So, what is fragile? Fragile is something that breaks easily. Like a mirror, if you kick it, it breaks and that’s the end of it.


Other things are robust. Like a brick wall, if you have the same level of body strength as me and you kick a wall, nothing happens to the wall.

But robust is not the opposite of fragile – in the same way the opposite of positive is not zero – it’s negative. Being robust is neutral.


So if robust is not the opposite of fragile, what is?

People who promote the idea of antifragility claim there’s a third type, which we can call antifragile. Something that actually gets stronger the more you beat it up.

So, let’s look at some examples of antifragile systems…


You are! You’re antifragile.

As you exercise or do some sports, your body gets tired – it’s being damaged at a cellular level. But afterwards, when you rest, your body recovers but not just back to its original state – it grows stronger.

That’s an antifragile system.


The concept of antifragility was originally introduced by a book of the same name by Nassim Nicholas Taleb.

He argues that we as humans need to seek out experiences that stress us, that hurt us – so that we can grow stronger. The same is true for companies. And, yes, supply chains


But simply subjecting yourself to extreme stress without breaks doesn’t work.

The stressors must meet two critical conditions:

  • Sufficient recovery
  • Not overload in each dose

The core idea is about breaking down a stressor into smaller doses to be taken at regular intervals so that you can raise your overall tolerance to it.


Let’s talk about Netflix’s content delivery supply chain and how they apply antifragile principles.

Even though Netflix delivers its products over the internet, the principles are exactly the same as a traditional supply chain — except it’s a supply chain that operates at the speed of light


And that means when things go wrong, customers are immediately impacted.

So Netflix built a tool called CHAOS MONKEY.

It’s a virtual wild animal that they let loose on their digital estate causing chaos.

Chaos Monkeys turn off servers, reconfigure settings and generally wreak havoc.

Why?


By constantly putting their systems under stress then identifying and implementing improvements, the system gets stronger.

This effort paid off in 2011 when a huge Amazon outage broke numerous popular websites. Netflix’s service however, despite running on Amazon’s cloud, continued without interruption.


For an example in a more traditional supply chain, recall last week’s Amazon case: how they simulated stressful holidays conditions by artificially constraining their supply chain at other times of the year.

Closing 15 out of the 20 doors available for supplier deliveries they were able to identify process bottlenecks and refine their procedures.


In both the Netflix and Amazon examples, they’re not leaving the stresses on their systems to chance — they’re proactively managing them.

Another feature of these systems is, unlike during real disasters or genuine spikes in demand, if things start going wrong in your test, you can always stop the test early and let things get back to normal.


But the idea goes deeper than just dress rehearsals for disasters and seasonal demand.

In Taleb’s view we’ve be fragilising (ie. treating things as if they are fragile) the economy, our health, political life, our children and more.

We’ve made life too easy that we’ve lost our strength.


Opportunities to create antifragile systems exist everywhere.

E.g., Customers sometimes write negative reviews online, and each review is a small attack on the company behind the product.

A company that believed in antifragility – and had a system for learning from bad reviews, might actively encourage customers with bad experiences to post them online.


Now, think about the concept of variability. In a supply chain, variability is a form of stress because it’s more expensive to cope with than consistency.

Although it might make financial sense and be more efficient to reduce variation, doing so creates fragility.

So in the long run, a supply chain that is more flexible is more antifragile.


But by far the most controversial corollary of antifragility thinking relates to debt.

Remember one of necessary conditions for an antifragile system was not overloading on stress.

Debt creates fragility because it leaves less room for errors — increasing the chance of a catastrophic failure.


Like any idea, antifragility is not without its critics.

It’s not really a new idea — it’s basically the same idea as Charles Darwin figured out 200 years ago

It oversimplifies complex situations to a single dimension

Not every system gets stronger when subjected to stress.


In summary, an antifragile system is one that follows this circular flow chart.

It feeds on doses of random stress, pain and discomfort
that are small enough not to cause irrecoverable damage
and is given, time and resources to recover,
So that it can grow back stronger and more resilient to ever higher doses of stress.


Examples of antifragile systems include:

Organisms – this concept is not so different to the theory of evolution
You when you do exercise
Simulations of supply chain disruptions
Anything that encourages chaos and randomness in your lives and work

But it’s important allocate recovery time and not to overload.


Thank you for listening to my notes on antifragility and making it to the end.

Do you think your company could become stronger if it were subjected to more stress?
Or do you think this is a load of homeopathic nonsense that oversimplifies things to the point of no use?

I’m looking forward to reading, and growing from, your criticisms on the forum.


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