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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?

#311

Post by nickpinkston »

j88439h84 wrote: post #156
nickpinkston wrote: post #111

We in the manufacturing tech space have been thinking a lot about reconfigurability, beyond just 3D printing locally, but to how do you tool up (make molds, program machines, etc.) automatically akin to a deploy script, Docker container, etc. These analogies are no where in the current paradigm, but if we have them, we could quickly allocate work across the manufacturing space to get stuff made far quicker. The mater…

I looked through it but couldn't understand what the proposal is from the pictures. A blog post would be more helpful.

Thanks for the look! The YouTube video is linked in the description, but here it is:

https://www.youtube.com/watch?v=oXk1O6biJSE

Would love your thoughts. (and yes, eventually I will write all of this up, but there's a lot to get out, and I've been focused on building)

Re: Is It Time to Rethink Globalized Supply Chains?

#312

Post by Nasrudith »

dv_dt wrote: post #96
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…

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 (harde…

Really the risk sounds more like a job for insurance and warranties tied to product specs than tarrifs.

I don't see a connection between tarrifs and risk in a supply chain. Infamously US autos which refused to adopt Tailorism or other cousin methodologies for reliability wound up being expensive crap compared to Japanese car makers. It is a peripheral variable at best or an irrelevant one at worst.

Tarriffs as a solutio resemble opportunistic timing to not let a crisis go to waste rather than addressing a root cause.

Re: Is It Time to Rethink Globalized Supply Chains?

#313

Post by Nasrudith »

asdfman123 wrote: post #149
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…

How do you build in redundancy, though? If China makes widgets for $0.13 a unit and the US makes widgets for $0.15 a unit, how do you incentivize people to buy some of them from China, and some of them from the US? It seems like the logic of free trade and specialization dictates it's mostly all-or-nothing. That's a genuine question, by the way. I'm curious.

What is needed is for there to be multiple competitive and diverse fungible product sources to get redundancy. It is sort of an extension of a competitive market. Production insufficient for complete demand to be supplies by one softens the blow as it becomes half needed capacity. So if say China produces half of our screws then cut off results in a shortfall by half instead of a complete cut off.

The thing is that these dependencies are a feature and not a bug on several levels, both in terms of trade promoting peace and the efficency involved. Put the should we philosophical questions aside and there are a few precedents to look at and hypothetical solutions.

One way is through subsidies for deliberate overproduction are the way done for food - but that is also a market where the fungibility and nutrition encourages varierty to some degree. Again it is inefficiency by definition - generally done for things where it is believed/claimed to be better to have the waste than running out.

Another is in "national security" pork where it is often more an accident of the pretext than neccessity. Needing American screws for DoD gear.

Some sort of international robustness treaty/trade deal could be devised per sector that say any country may subsidize or tarriff industries up to say N% of their basic demand but once it gets beyond that they need to stop or start tapering off, perhaps with varied threshholds. That would no doubt be a bed of weeds as everyone tries to privledge their own interests and plays games with classifications.

Re: Is It Time to Rethink Globalized Supply Chains?

#314

Post by abathur »

eeZah7Ux wrote: post #255
abathur wrote: post #189

Earlier quoted context omitted.

Like Chaos Monkey, but with import/export bans and/or tariffs?

Are you hinting at some politician?

No--just https://en.wikipedia.org/wiki/Chaos_engineering#Chaos_Monkey

But I can see how you came to that reading, and it did give me a chuckle.

Re: Is It Time to Rethink Globalized Supply Chains?

#315

Post by jcims »

implements wrote: post #300
jcims wrote: post #198

Earlier quoted context omitted.

There's a tickle in a neuron but it could be self-induced. What was the relationship?

They bought EDES in 1998 - it was a company I’d done a bit of contract work for. (Trivia) EDES was one of the few users of RPL (RapidGen Programming Language) - Decision Table based, and running on PDP11s and later MicroVaxs. https://www.cbronline.com/news/sterling_commerce_buys_into_u...

Hmmm I was there in 98, probably just a hole in my memory.

Re: Is It Time to Rethink Globalized Supply Chains?

#316

Post by danans »

quanticle wrote: post #298
danans wrote: post #270

Earlier quoted context omitted.

> Pandemics (especially pandemics such as this one) are not black swans. Numerous experts saw predicted them. Black swans aren't necessarily unpredicted. In fact they are usually predicted by a few people, but the predictions run so counter to the interests of established set of systems and models, that they are ignored. In the book, Taleb actually spins a story about an individual who spends his entire life predicti…

I guess we have different standards as to what counts as a "black swan". To me, a black swan is an event that is genuinely unpredictable, and which has catastrophic consequences. A large earthquake in California, for example, is not a black swan. Even though we may not know exactly when the earthquake will hit, we know that one is coming eventually, and therefore reasonable preparations should be taken in order to mi…

It's a fuzzy line as to what is predicted or not.

One of most catastrophic earthquakes in recorded American history took place in 1811 in a place called New Madrid, Missouri, not far from Kansas. I'd predict that it's going to happen there again.

If it does, I'd still call it a black swan, since the systemic incentives to not prepare for such an earthquake in that area are probably optimized for the short-term.

Re: Is It Time to Rethink Globalized Supply Chains?

#317

Post by nexuist »

shadowtree wrote: post #273
GuB-42 wrote: post #163

Is it really a problem? Obviously, now, it is. But everything is a problem. Having the supply chain less globalized doesn't mean there is an excess. Now, there is a shortage of surgical masks, but that's because the demand is too high, not just because they are made in China. You have to balance efficiency and reliability. And normally, the global supply chain is very efficient, and surprisingly reliable. Black swan…

This is HN, so let's use tech nerd examples. Do you want a single server handle the load, located in China? Or a decentralized, load balanced system? 9bn users. Go.

But that's not accurate either. In this analogy China would in fact be hosting thousands of different servers. There is no "China Business"; there are businesses in China.

A more apt comparison would be between cloud providers (which are the supply chains of modern IT) - do you want to stay at AWS's mercy, or expand to Azure and GCP as well? Maybe you should consider Linode or DigitalOcean as well? There are pros and cons to those approaches - both in experiences, pricing, innovation, etc. The same applies to global supply chains.

Re: Is It Time to Rethink Globalized Supply Chains?

#318

Post by invalidOrTaken »

quanticle wrote: post #299
invalidOrTaken wrote: post #261

Earlier quoted context omitted.

I think it can work, just not by crowd-sourced, incentive-based decision-making. Steve Jobs can do what Apple shareholders cannot, etc.

The problem is that if Steve Jobs fails to demonstrate returns commensurate with his peers, Apple shareholders can and will oust him and replace him with another CEO who will "cut the fat" in order to boost Apple's profitability. It's easy to look at Steve Jobs and Jeff Bezos and think that a sufficiently charismatic CEO can use his or her "reality distortion field" to hypnotize investors, but it doesn't work like th…

Good thoughts, well-articulated.

Re: Is It Time to Rethink Globalized Supply Chains?

#319

Post by eru »

dredmorbius wrote: post #294
eru wrote: post #284

Earlier quoted context omitted.

Companies are free to add them to their accounting already. Mostly these kinds of risk factors are mentioned verbally in their reports at the moment.

Entities tend strongly to externalise risks unless compelled to do otherwise. Insurance obligations -- auto, health, life, C&L, bonding, mortgage and title -- are generally required by or offered via third. parties. Sometimes governments, but often creditors, counterparties, employers, or other entities.

There are true externalities in a car accident.

If you have to shut down your business, that's mostly impacting your business in a very direct way.

Re: Is It Time to Rethink Globalized Supply Chains?

#320

Post by seph-reed »

RandallBrown wrote: post #168
asdfman123 wrote: post #149

Earlier quoted context omitted.

How do you build in redundancy, though? If China makes widgets for $0.13 a unit and the US makes widgets for $0.15 a unit, how do you incentivize people to buy some of them from China, and some of them from the US? It seems like the logic of free trade and specialization dictates it's mostly all-or-nothing. That's a genuine question, by the way. I'm curious.

Maybe tariffs? I'm not sure if this is practical to actually implement, but if you increase tariffs based on how many of each item you're shipping, it would eventually be cheaper to manufacture some of them in the United States. Example, first million widgets have no tariff. Next 500,000 are $0.02 per widget. Next 500,000 are $0.03 per widget and now it's cheaper to make those last 500,000 in the US. And for companie…

This is really clever! It's like increasing taxes as a company gets bigger, or making people pay exponentially more for the second/third bottle of hand sanitizer.

Reminds me of the concept of "protecting players from themselves" (https://www.youtube.com/watch?v=7L8vAGGitr8)

Good idea.

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