Small nit: NIFO is another word for price gouging.
What caused all the supply chain bottlenecks?
361–370 of 690 posts
Re: What caused all the supply chain bottlenecks?
#362> Just in time everything. No excess capacity.
JIT requires excess capacity by definition. Response time of a process running at 100% utilization is unbounded, which is the opposite of JIT.
Re: What caused all the supply chain bottlenecks?
#363Earlier quoted context omitted.
>it's still in his best interest to ensure that the economy doesn't crash Technically, yeah! Functionally, though, if the Even Greater Depression arrived tomorrow? He'd still be the richest man alive, and probably even more powerful than he already is right now thanks to how Amazon and AWS would get to take over more failing social institutions. Sure, a falling tide lowers all boats, but Bezos will still comfortably…
>He'd still be the richest man alive if you're measuring outcomes by relative income/wealth, then you can also argue that the "Even Greater Depression" wouldn't affect the average person either, because everyone would stay in the same place (on average). >probably even more powerful than he already is right now thanks to how Amazon and AWS would get to take over more failing social institutions. We just had a huge pa…
>I'm not sure why this is being brought up, other than for the shock value.
I suspect that you don't understand why I'm bringing up the human consequences for the same reason you've claimed that "the "Even Greater Depression" wouldn't affect the average person either, because everyone would stay in the same place (on average)". Bezos and his peers can lose hundreds of thousands of dollars of abstract net worth every day for decades before they even notice, let alone have the material conditions of their lives change in the least; the modal person will be dead of exposure in a few days. It's somewhat incredible that you'd even try to make the argument, actually.
>Surely he'd prefer to be the leader of a global megacorp, travel anywhere in the world, partake in various space-related adventures, and not be trapped in a bunker?
Aww, shucks, I'm confident Bezos will be able to continue his worldly lifestyle until things go very poorly indeed. That said, the very existence of the owner class's anxiety-bunkers is a sign that they're not entirely behind keeping the global economy running and serving the people, don't you think? If there's only one escape pod and it's for the command staff, only us crew need suffer the consequences of their tactical decisions.
>I'd be pretty pissed if the US government somehow revoked by right to leave the country.
I never mentioned this, and I'm not sure what relevance this has to anything either of us has said. I'm beginning to believe you're not arguing in good faith.
>Similar to your fears about amazon taking over, this seems to be unsupported by the data
AWS didn't even need a pandemic to achieve running most of the DoD. Not sure if you've been following the housing market, but Zillow didn't need an economic crash to go all in to rent(al)-seeking behaviour. At least they seem to be dropping the ball on that one, but think of how much more effective buying up all the houses will be once everyone's underwater on their mortgage and unemployed? I'm also a little surprised that you'd show me a chart that shows that this historical low of landlord house purchasing represents a fall to 20%. Since you're so familiar with CoreLogic's data sets regarding this, I'm sure you're aware that in 2000 it was between 5 and 10%, and trended upward until only recently. Unsupported by the data, my eye; you're just closing yours to the important parts of the story.
>The great recession lasted from Q1 2008 to Q3 2009, according to the fed. However, this doesn't seem to correlate with institutions buying up houses?
The other way to phrase this, of course, is "having ballooned in the past eight years, the proportion of home sales to landlords snaffling up housing stock continued to rise, even during an economic crisis, and rose precipitously after the crisis was 'over'".
Re: What caused all the supply chain bottlenecks?
#364He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…
> I think economists call it rent-seeking. There was a book published a couple of years ago (before the pandemic) which was "demonstrating" (so to speak) that going back through history real financial/economic levelling at a reasonable scale only happened as a result of violent means (wars, revolutions etc). I think what those violent means do (among other, more nasty things like people getting killed) is that (in so…
You don't need a book on economics to understand this. Just read some real, actual history books to see that after a war or revolution of any kind _nobody_ is better off. Start with the French revolution and just go over all of them in order. A hundred million people who died at the hands of the fascist or communist governments in the past century are, one would hope, a sufficient proof of that.
Re: What caused all the supply chain bottlenecks?
#365He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…
>obsession with RoE is a big part of the problem
Is this even still true in a super low interest rate environment?
Yeah in the 80s and 90s, tying your resources into inventory would have cost a lot in terms of missed opportunity to invest the money elsewhere. But with financing rates near zero or even sometimes negative in real term, wouldn't even the wall street guy be like: sure keep some inventory, cash is cheap right now.
This RoE argument seems very last century to me.
Re: What caused all the supply chain bottlenecks?
#366Earlier quoted context omitted.
> Having things sitting around unused is a huge reason that US car companies got their asses handed to them by Toyota and their TQM/LEAN system they developed. It didn’t help but I think that’s more of a symptom of building shoddy products: part of why inventory backed up is that Detroit was producing cars which simply weren’t as good. Toyota didn’t have a shortage of demand, and neither did Saturn. If you make shodd…
There's an entire book (I've read it) about this called "The Machine That Changed The World" published in the early 90's. It goes into great depth as to the issues that were plaguing GM/Ford etc. The excess inventory was absolutely not driven by too little demand. It was simply inefficiency in the manufacturing process and inability to rapidly reconfigure the shop floor or reallocate labor towards bottlenecks. The bo…
> I'm a hardcore believer in the ACTUAL Agile philosophy, which is rooted in lean
Re: What caused all the supply chain bottlenecks?
#367He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…
That part of the Twitter thread actually made me laugh out loud. In the middle of talking about how modern finance is messed up he has a kind of unprompted little aside about how “taxes are bad!!!” Dear lord the amount of smug “wE aRe ThE mOSt EfFicIEnt wAY Of AllOCaTinG CaPitAl” arguments from very wealthy founders that would prefer to become more wealthy is frankly ridiculous. I get it, you went to Stanford and the…
> “wE aRe ThE mOSt EfFicIEnt wAY Of AllOCaTinG CaPitAl” arguments from very wealthy founders
"most" does a lot of work here since it's a relative term. I'm not sure I'd exactly call them efficient but I'm not sure there's a _more_ efficient way that I've seen.
Re: What caused all the supply chain bottlenecks?
#368Earlier quoted context omitted.
> I think economists call it rent-seeking. There was a book published a couple of years ago (before the pandemic) which was "demonstrating" (so to speak) that going back through history real financial/economic levelling at a reasonable scale only happened as a result of violent means (wars, revolutions etc). I think what those violent means do (among other, more nasty things like people getting killed) is that (in so…
Probably "The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century"
No, it's Piketty's controversial book, one of his points was his analysis of historical data showed that the only time the ratio of wealth between capital and labour R decreased was during wartime, especially the two World Wars when incredible amounts of wealth was destroyed, seized or simply reverted to states because there was nobody left who could claim it.
Re: What caused all the supply chain bottlenecks?
#369Earlier quoted context omitted.
I think his statement is that founder (and family) led businesses are the only businesses capable of building the shock absorbers necessary to weather hundred-year storms; not that they always will. By comparison, committee-appointed CEOs rarely, if ever, will, because they cannot.
I was always under the impression that family run businesses tended to have poorer quality management.
I'd say emotional over-investment is at least a big a problem with founders and family businesses.
Re: What caused all the supply chain bottlenecks?
#370Earlier quoted context omitted.
> A shortage in real life causes critical issues for real people. A shortage in Factorio does not. An iron shortage in Factorio causes my iron plates to run out. My iron plates feed the steel furnaces. The steel furnaces build ammo. My ammo is automatically belted to my defensive garrisons. Then the bugs completely wipe out my base, because I was out of ammo. Going backwards: Understanding why I'm out of ammo require…
I've not played Factorio but love your argument. Very thought provoking. What happens if something in the middle breaks and you don't have a buffer? What happens if there is no iron shortage but the steel furnace blows up? Aren't buffers important in such situations?
> What happens if something in the middle breaks and you don't have a buffer? What happens if there is no iron shortage but the steel furnace blows up? Aren't buffers important in such situations?
Okay, lets have two factories that convert 5-iron into 1-steel (Factorio ratio):
* "Buffer Factory": requiring 7000 steel to buffer up / 35000 iron before working at full capacity.
* "JIT Factory" : requires 200 steel to buffer / 1000 iron before working at full capacity.
The JIT-factory can sustain for 5-seconds without any inputs. (Belts in the game pull 40-items per second). The Buffer-factory can sustain for 175 seconds. You're seeing this as a good thing. It is not.
When you hook up a new source of iron to the JIT-factory, it only needs 5-seconds (assuming 5-belts of iron: 200 iron/second) before it starts up to full capacity.
When you hook up a new source of iron to the Buffer-factory, it needs 175 seconds before it goes back into full capacity. (The 175 seconds of buffering "need to be paid" at some point. In the case of Buffer-factories, that payment is done _before_ your end product is even finished).
JIT-factory is more useful. You shutdown when you run out of material (aka: using less electricity. Using fewer resources. Using fewer items).
The Buffer-factory needs 175-seconds to shutdown after running out of material. It also needs 175-seconds of "booting up" once you hook up new sources of material to it. That's electricity you're spending, resources you're using on BUFFERING that's completely a waste.
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Yeah, it sucks to be a worker in the JIT-factory, because your managers want to fire you during these low periods. But you can't deny the underlying efficiency of the strategy. Of course workers want the 175-seconds of buffering periods (aka: to be paid even when the factory is unproductive). But that's short-sighted.
I'm not saying that workers "Deserve" to get screwed here. But fundamentally speaking, the JIT-factory is clearly more efficient. What we need to discuss politically is how to protect the livelihoods of the workers during these periods when supplies run out.
But building systems where you have long periods of "boot up" and "shut down" just so that workers have something to do? That's not useful at all. And anyone who has played Factorio will see this instantly when thinking about buffers.
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Now I don't know the "ratios" of chips to cars. But lets say 100 chips create 1 car for simplicity.
Lets say Ford gets a shipment of 100,000 chips next month. Should Ford build 1000 vehicles? Or should Ford build 500 vehicles (and buffer up 50,000 chips) ??
Think about what the buffer actually means. Obviously, building 1000 vehicles is the answer. The sooner the vehicles are done, the better. The buffer only wastes time and energy.