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Is It Time to Rethink Globalized Supply Chains?

sloanreview.mit.edu

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Re: Is It Time to Rethink Globalized Supply Chains?

#301

Post by xenonite »

ntsplnkv2 wrote: post #278
xenonite wrote: post #238

Earlier quoted context omitted.

I think you mean that for example, the US pollution standard needs to be fulfilled by Volkswagen if they like to export VW cars to the USA. However the OP meant more than that: that the VW workers, employed for example in Mexico, who assemble cars for US export would get the same worker rights as they would get in the USA. And the same would hold for pollution at the factory and so on.

That would make things cost a lot more money. The reality is much of our economy is built off the backs of essentially slave labor. And we're all guilty of benefiting from it.

In the short time, I agree with you. However, this also reduces the incentive to produce in a foreign country. Hence, this would even move many jobs back to the country where the consumers live. This in turn keeps the consumers' money in their country. Hence, their total wealth increases, largely already because the outflow of money is reduced. With more money available at the hands of the consumers, things don't need to be much more expensive than now.

Re: Is It Time to Rethink Globalized Supply Chains?

#303

Post by mgoetzke »

jimbob45 wrote: post #16

Counterpoint: 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…

Tesla and SpaceX try that too (more than competitors at least)

Re: Is It Time to Rethink Globalized Supply Chains?

#304

Post by notyourday »

dredmorbius wrote: post #267
notyourday wrote: post #235

Earlier quoted context omitted.

You get what you pay for. If you aren't paying for the guy to be the observer there's no one to observe.

You don't get what you pay for. But generally value derives from multiple independent credible verifiable audit mechanisms.

> You don't get what you pay for.

Yes you do. You get exactly what you pay for. If you pay for a dozen of German inspectors who think Chinese factory produces junk that is outside the spec, a dozen of German inspectors with that attitude are going to do inspections. If you do no want to pay those German inspectors, you are not going to get those inspections.

In most of the cases companies do not want to pay for it. Apple manufactures amazing iPhones in China. Apple iPhones easily last 5-6 years. Blu manufactures crappy Android phones. They barely last a year. Apple's iphones cost more to manufacture than Blu phones sell for.

Re: Is It Time to Rethink Globalized Supply Chains?

#305

Post by naasking »

giantrobot wrote: post #239
naasking wrote: post #161

Earlier quoted context omitted.

I never said supply chains should be slower or less dynamic, I said they should be less centralized and thus more robust, and arguably critical goods manufacturing absolutely also need a domestic presence. This is completely obvious when you see how Hurricane Maria led to drug shortages because Puerto Rico was the sole produce of some critical drugs, or how China recently had to halt outgoing shipments and everyone e…

> I never said supply chains should be slower or less dynamic, I said they should be less centralized and thus more robust, and arguably critical goods manufacturing absolutely also need a domestic presence. If manufacturing supply chains are more geographically dispersed they are automatically slower and less dynamic. They're not necessarily more robust either. As soon as the supply chain involves moving materials f…

> If manufacturing supply chains are more geographically dispersed they are automatically slower and less dynamic.

You keep hammering on this geographic dispersal, but as far as I can see, no one is suggesting geographically dispersing or relocation supply chains, but are instead suggesting replicating supply chains in different geographical locations. You know, the standard approach to adding resiliency to literally any system.

> Some do and several industries are regulated when it comes to sourcing. [...] there's a competitive advantage to having a supply chain more susceptible to rare disruption but far less expensive.

Yes, and I'm suggesting that a more comprehensive legal approach where corporations providing critical goods or services should have to perform risk assessments and ensure a maximum tolerable risk. Everyone recognizes the competitive advantage of ignoring risk. I described it in my very first post to which you replied, and I then said improved risk management should be legislated.

Re: Is It Time to Rethink Globalized Supply Chains?

#306

Post by Spooky23 »

dredmorbius wrote: post #267
notyourday wrote: post #235

Earlier quoted context omitted.

You get what you pay for. If you aren't paying for the guy to be the observer there's no one to observe.

You don't get what you pay for. But generally value derives from multiple independent credible verifiable audit mechanisms.

You don’t if you just throw money at it.

But when you build ongoing relationships, you get benefits from not pushing for the bottom dollar at all costs.

Re: Is It Time to Rethink Globalized Supply Chains?

#307

Post by celticninja »

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…

I think this will be a driver to reduce this sort of dependence on one country. Given that SARS, H1N1 and Covid19 have all originated in this one geographic area iexpect a lot of supply chains will be changing, especially those related to medicine and healthcare. it doesn't mean abandon China, bit it means you probably only want 1/3 of your stock from one country.

Re: Is It Time to Rethink Globalized Supply Chains?

#308

Post by celticninja »

sigstoat wrote: post #196
Retric wrote: post #186

Earlier quoted context omitted.

I am convinced a low tariff of ~3% on all goods and services to every country is a good idea. But that’s never what happens, you get a huge mix of zero to insanity based on which industries have political power. As such a blanket ban on tariffs became a rallying cry. Food is often used as the counter example, but IMO domestic production is less valuable than a multi year stockpile.

> domestic production is less valuable than a multi year stockpile nobody is going to stockpile food or consumer goods when you're demonized for charging more for them when the demand goes up. there's no way to do anything but lose money on it.

that's why stockpiles should be kept by government. they don't need to make money on it. should be easy enough, have 6 months worth in a warehouse, ship the oldest out the front of the warehouse to the supply chain while topping up with new product at the back. rotating it like this acts like a buffer,rather than something that is only accessed in dire emergencies and would be out of date or less effective due to age. the relatively small costs of a warehouse would be negligible

Re: Is It Time to Rethink Globalized Supply Chains?

#309

Post by rmrfstar »

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…

Professor Shih has been sounding the alarm for at least a decade [1],[2].

His has not been a popular narrative among the Cambridge intelligentsia, who skew pro-corporate and anti-producer.

[1] (2010) "Innovation Killers: How Financial Tools Destroy Your Capacity to do New Things"

[2] (2012) "Producing Prosperity: Why America Needs a Manufacturing Renaissance"

Re: Is It Time to Rethink Globalized Supply Chains?

#310

Post by mistermann »

FooHentai wrote: post #288
mistermann wrote: post #133

Earlier quoted context omitted.

I sure get the feel that it would be, but I hope we get moving on that ASAP before this is over, because I suspect minds have only been temporarily opened on this matter. Before too long I suspect our old heuristics will reassert their dominance over logic on topics that are in any way associated with the identity of the person. I am going to bookmark this thread in anticipation of this phenomenon. "Nobody could have…

>the overwhelming sentiment I've been getting from the memeplex is that this situation is entirely the fault of Trump, when he fired Obama's pandemic team. Also Trump 'dependence on China is a huge problem'.

Of course, but if we're seeking the truth, Donald Trump isn't a good place to start.

Dependence on (where could be China or many other things) has been an obvious risk across numerous dimensions for a very long time now. Many of these ideas have been discussed here, although not in a manner befitting for the gravity of the matter.

That even on HN we are often unable to engage in unbiased, purely rational discussion has been another big systemic risk that I have been banging the drum about for months. It makes a person start to wonder: what will it take for people to wake up? Maybe it isn't even possible?

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