The actual title is "Is It Time to Rethink Globalized Supply Chains?" which doesn't use a question mark after a statement.
Also this fails HN’s guidelines of title editorializing, by including the author’s name.
Is It Time to Rethink Globalized Supply Chains?
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Re: Is It Time to Rethink Globalized Supply Chains?
#22Hum, nope. We will not rethink globalized supply chains.
It's a good time to invest in research about knowledge protection and flexible production. It's also a good time to invest in emergency production capacity (best if it's of the flexible kind) by the government, most likely inside the military. (It may also be a good time for most countries to rethink the role of the military.)
But we will not adopt suboptimal methods on the private economy. It doesn't work that way.
Re: Is It Time to Rethink Globalized Supply Chains?
#23It seems to me like the problem is just that supply chains aren’t legible. I forget where I read this from, but Walmart or Amazon would easily pay billions of dollars to know which shipments won’t arrive over the next few months because of the rolling wave of factory shutdowns. Once you have that legibility, the extra step of snipping the globalized supply chains seems unnecessary. Some businesses will plan to mainta…
That's because the supply chain is as immeasurably complex as the real world. Does your model account for the fact that the polish or german government decided to institute border controls and now there is a 40 mi backed up line of trucks delayed? Does it consider the cascading effects of polish truck drivers being unavailable for 14 days of quarantine if they cross into Poland for non-work reasons?
Re: Is It Time to Rethink Globalized Supply Chains?
#24There is one thing good coming out of this, among all the desastrous things we saw so far.And that is increased awareness of the importance of jobs like nurses, shop clercks, truck drivers, deliverydrivers, warehouse workers and logistics and supply chain management.
of all the companies Isaw, from insideand the outside, in my lifeso far, only the rare minority treated supply chain management and logistics as anything else than cost centers. If that perception changes, supply chains will become more robust. Because all the points that are now visible for everyone due to covid-19 are kind of well known in the supply chain community.
That being said, i don't think global supply chain will go away. After, they survived two world wars so far. And the economic upside of specialization is simply to big to ignore. Supply chans have to become more robust, especially for things needed for events and crisis like we see now. And that part was kind of neglected.
Re: Is It Time to Rethink Globalized Supply Chains?
#25The price advantages of globalised supply chains vs. the relative rarity of an event like this means that, during normal periods, firms using them will enjoy a significant advantage over those doing the "right" thing and market forces will weed out the latter. So I don't expect management to be taking a lead on this.
yep. if we wanted it to happen we need protectionism and tarrifs.
Re: Is It Time to Rethink Globalized Supply Chains?
#26The price advantages of globalised supply chains vs. the relative rarity of an event like this means that, during normal periods, firms using them will enjoy a significant advantage over those doing the "right" thing and market forces will weed out the latter. So I don't expect management to be taking a lead on this.
Obviously. It needs to be enshrined in law. Stress tests, like for banks. It would also be more efficient / profitable for banks to keep lower capital reserves...
Edit: alternatively, countries could be much more trigger-happy when it comes to banning flights from potentially infected areas where some kind of virus starts - basically a lot of false alarms. Companies would simply have to adapt.
Re: Is It Time to Rethink Globalized Supply Chains?
#27Counterpoint: YKK (look at your zipper) relies on absolutely no one else for its supply chain [0]. This could easily be seen as a waste by those who would say YKK should just source its metal from the foundry down the street. It's easy to do a quick thought experiment in your head to think about how feasible it might be for every company to vertically integrate the way YKK has. On the other hand, YKK can't get jerked…
That’s an interesting insight. Companies as they grew and supporting companies who could specialize and take advantage of economies of scale would provide attractive alternatives to vertical integration. Most of the auto industry is like that. Not sure how feasible integration would be in a modern economy these days.
Re: Is It Time to Rethink Globalized Supply Chains?
#28Well, isolationist policies are not really possible for small countries, they can't possibly make everything they need. Having bigger countries depend on each other is also the opportunity to somewhat teach them diplomacy; otherwise they would have an even worse behavior towards small countries.
Imagine China or the US without any need for an external country, their behavior as citizens of the world would be 10 times worse.
Re: Is It Time to Rethink Globalized Supply Chains?
#29The price advantages of globalised supply chains vs. the relative rarity of an event like this means that, during normal periods, firms using them will enjoy a significant advantage over those doing the "right" thing and market forces will weed out the latter. So I don't expect management to be taking a lead on this.
Well, the flip side is that during times of crisis, one would expect market forces to weed out the former kind of companies (leaner, and with globalized supply chains). So which ones survive, and which ones are out-competed are a consequence of which set of market forces we soften and which set we allow to play out.
Re: Is It Time to Rethink Globalized Supply Chains?
#30Counterpoint: YKK (look at your zipper) relies on absolutely no one else for its supply chain [0]. This could easily be seen as a waste by those who would say YKK should just source its metal from the foundry down the street. It's easy to do a quick thought experiment in your head to think about how feasible it might be for every company to vertically integrate the way YKK has. On the other hand, YKK can't get jerked…
Thanks for the link, that's really interesting!
The claim about relying on absolutely nobody else sounds like an exaggeration though. Even if we limit the scope to consumables, I don't think they produce their machines' lubricants.