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Is It Time to Rethink Globalized Supply Chains?

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Re: Is It Time to Rethink Globalized Supply Chains?

#91

Post by jacques_chester »

zozbot234 wrote: post #5
SpicyLemonZest wrote: post #3

It 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…

> It seems to me like the problem is just that supply chains aren’t legible. There are a number of efforts to make supply chains in all sorts of sectors more transparent using blockchain-like protocols. So this will hopefully improve in the future.

Blockchain works for currency problems because the unit of tracking is the unit of value, the entire system is fully self-contained and no oracle is required to pump information into and out of the system.

None of these things are true of supply chain problems. All it adds vs bog-ordinary B2B protocols is the ability to waste electricity on a galactic scale, instead of a merely planetary one.

Re: Is It Time to Rethink Globalized Supply Chains?

#92

Post by jcims »

moufestaphio wrote: post #85
alexose wrote: post #64

Earlier quoted context omitted.

In my experience, it's not that companies are choosing any one strategy over another. It's more that companies have no idea what their supply chain actually looks like. Only that the widgets show up at their loading dock every week, and that the shipments have always been reliable in the past, so that there's no reason to look any further. There are often strong disincentives, as well. Nike, for example, got themselv…

My current position is involved in Supply Chain, and this hits the nail on the head. There are so many different departments with fragmented knowledge of the supply chain that isn't shared or sometimes even documented. One of the senior people trying to fix this specifically mentioned Walmart as an example of having their supply chain being a competitive advantage because they focused on it so much. I think Apple was…

WalMart turned their supply chain into a competitive advantage 30-40 years ago. I saw it as an employee first, their inventory control in the store was ridiculous back in the 80's. Then I saw it again working with an EDI shop (Sterling Commerce) in the 90's. Everything was electronic. We'd get these little mom and pop shops calling in trying to get their bisync modems working so they could upload their ANSI X12 810's.

The only reason there's any question who's the richest person in the world is that Sam Walton is dead.

Re: Is It Time to Rethink Globalized Supply Chains?

#93

Post by bilbo0s »

alexose wrote: post #64
tvanantwerp wrote: post #36

I feel like the problem is less that supply chains are globalized, and more that they aren't redundant. By that I mean, there's too much reliance on China as the primary producer/exporter for countless industries and products. Having just one nation account for such a large share of manufacturing introduces single points of failure. It would be wise to have multiple sources for any given good, especially if it's esse…

In my experience, it's not that companies are choosing any one strategy over another. It's more that companies have no idea what their supply chain actually looks like. Only that the widgets show up at their loading dock every week, and that the shipments have always been reliable in the past, so that there's no reason to look any further. There are often strong disincentives, as well. Nike, for example, got themselv…

>but they've achieved it at great effort.

And enormous expense. You shouldn't have to have Apple money to establish visibility into, and security of, your supply chain. I mean, do you really want to be down in the weeds trying to make sure the coltan isn't essentially coming from Rwandan warlords? Apple can afford that, most people can't.

Re: Is It Time to Rethink Globalized Supply Chains?

#95

Post by naasking »

Definitely time to rethink globalized supply chains. The centralization inherent to this obsession with efficiency is simply not resilient to disruptions. We learned to build redundancy into our food production to handle disruptions like, centuries ago, which is (partly) why we pay farmers to produce more food than we technically need. We don't invest much to keep manufacturing of some other critical goods domestic.

I'm frankly astounded that exclusively outsourced supply chains were ever a serious consideration. Yes they're more efficient, but efficiency isn't the only consideration. Imagine if someone seriously came forward to suggest China should also produce all of our food. It's nuts.

I blame the continued financialization of our economy which leads to an absurd obsession with efficiency above all other considerations. It's yet one more example of borrowing against the future that has led to many of the recent economic crises.

Edit: we regulate risk in financial sectors, like the debt ratio, and supply chain resiliency is simply another risk assessment. I think more comprehensive legislation surrounding corporate risk taking will ultimately be needed.

Re: Is It Time to Rethink Globalized Supply Chains?

#96

Post by dv_dt »

alexose wrote: post #64
tvanantwerp wrote: post #36

I feel like the problem is less that supply chains are globalized, and more that they aren't redundant. By that I mean, there's too much reliance on China as the primary producer/exporter for countless industries and products. Having just one nation account for such a large share of manufacturing introduces single points of failure. It would be wise to have multiple sources for any given good, especially if it's esse…

In my experience, it's not that companies are choosing any one strategy over another. It's more that companies have no idea what their supply chain actually looks like. Only that the widgets show up at their loading dock every week, and that the shipments have always been reliable in the past, so that there's no reason to look any further. There are often strong disincentives, as well. Nike, for example, got themselv…

They have a complete idea, its just that the globalized option is cheaper, even fractions of pennies cheaper, and is directly measured in the profit margin, while the risk, if it shows up at all, is buried in the footnote of a 10-Q or annual report.

Ideas like regionalization and flexible manufacturing are great ideas, in most cases, the capital machinery of factories are relatively easy to replicate and setup (harder than software, but much easier now than any time in the past). However, the economic and accounting system needs to balance out the global employee wage differentials for it to gain any traction.

Tariffs have been hated on economically, in part because the analysis values the generic profit creation over the risk; but it seems like one way to balance wage differentials to encourage de-risking our supply chain. I'm sure there are other maybe better methods?

Re: Is It Time to Rethink Globalized Supply Chains?

#97

Post by carltonf »

ibeckermayer wrote: post #35
fennecfoxen wrote: post #15

The problem is that almost no one buys products based on the stability of the supply chain, so irresponsibly-global supply chains will beat out responsibly-global ones on price. The problem is our tools to addressing this are either (a) some sort of tariff arrangement, which will almost certainly be political footballs far more than they will address any real problem, or (b) some regulatory/compliance arrangement, wh…

Events like this should weed out firms with irresponsible supply chains, unless we’re forced to bail them out.

Extended period without events will weed out firms with responsible supply chains and thus the other type of firms are very likely to be the majority - the majority of the population will depend on them. So Governments will always be forced to bail them out.

Re: Is It Time to Rethink Globalized Supply Chains?

#98

Post by naasking »

whatshisface wrote: post #50
hello_moto wrote: post #48

Earlier quoted context omitted.

There are reasons why US prefers to bail Boeing. US is always concerned about espionage and dependencies on other countries with respect to national interest. An example would be the whole Huawei+5G debacle. What if Boeing goes bankrupt and the only reliable plane makers are PRC companies (usually state-backed, even if it's not explicit)?

If Boeing goes bankrupt all of the assets are still there and all of the employees still remember how to do their jobs. A company collapsing is a pure-paper action that means "fire everyone in charge." In some cases, depending on how the corporate governance is set up and on who holds the equity, it's the only way they can be fired. If the US wants to help out US manufactures for strategic regions, it can apply the u…

The problem is, while all this paper shuffling is taking place, state-backed players like Huawei can dominate a market in the interim. Not a good outcome to say the least. I agree that some structural change is needed, but it doesn't have a trivial solution.

Re: Is It Time to Rethink Globalized Supply Chains?

#99

Post by blululu »

mschuster91 wrote: post #52
whatshisface wrote: post #37

Earlier quoted context omitted.

Another possibility: don't do any industrial bailouts and let high-risk investors take their medicine. Next time, risky businesses will find it more expensive to get capital, as investors realize some things they weren't thinking about before.

That would leave millions upon millions of people without jobs and trigger an economic recession against which 2008ff looks like a joke.

Maybe a moot point in the current market?

Re: Is It Time to Rethink Globalized Supply Chains?

#100

Post by hammock »

s_dev wrote: post #89
bkeyes wrote: post #44

Earlier quoted context omitted.

Never heard of them. Their company setup is pretty impressive. However to say 'relies on absolutely no one else for its supply chain' is an extreme exaggeration and frankly impossible. They don't make the computers, fiber optics, switches, exchanges, or software that their web site requires to run. They don't own the fleet of trucks, boats, and planes required to get their product to their customers - or their raw ma…

>Never heard of them. We had an argument in a CS class once about what the most "pervasive technology" in the room was. We were examining claims that "computing would become so pervasive and ubiquitous that it would become invisible" like electricity and that zipper. The reason it won was because we could count more of them than any other piece of tech in the room. Every person had more than they thought -- often as…

The thing about zippers is, YKK is hands down the best and most reliable zipper. Yes I know there are types of zippers, metal coil, molded plastic etc- YKK makes the best of each.

Plenty of companies try to source their own (Levi's is the first to come to mind), but the best companies all use YKK zippers because they know. If it doesn't say YKK on it, it's not a YKK zipper.

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