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What caused all the supply chain bottlenecks?

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Re: What caused all the supply chain bottlenecks?

#571

Post by superice »

erispoe wrote: post #554
cbdumas wrote: post #314

All of this talk about supply chain issues are totally missing the point in my opinion. So many articles (and tweet chains I guess) have been written about supply chain issues, yet every one of them seems to ignore the elephant in the room which is demand for goods vs services. Over the course of the pandemic there was a staggering re-balancing of consumer spending [0] from services to goods, to which supply chains h…

The same rebalancing happened in Europe, and Europe doesn't have close to the issues the US has regarding supply chain. Europe's major ports are automated and operate 24/7, port to hinterland relies much more on rail than trucking. Overall, the US supply chain was already very fragile and outdated.

Actually, I think barge transport is a much larger contributor than rail in the modal split of hinterland operations in Europe. Both Rotterdam and Antwerp have huge barge modal splits and large hinterland terminals, often trimodal.

Re: What caused all the supply chain bottlenecks?

#572

Post by p_l »

School-Cotton wrote: post #427
Johnny555 wrote: post #129

Earlier quoted context omitted.

Maybe we should not build extra widgets just to support events that happen 1 out of every 100 years. Except the COVID pandemic is probably not a 1 in 100 year event, the last SARS epidemic was less than 20 years ago (and fortunately was not as disruptive as the current one). I wouldn't be surprised if the next one is within a decade. And we've done little to prepare for it.

I doubt this level of shutdown will be tried for the next pandemic, even if it’s exactly as severe as covid. People won’t tolerate it.

Or maybe people will look into how those that shutdown more severely avoided the problems.

Re: What caused all the supply chain bottlenecks?

#573

Post by _3u10 »

irjustin wrote: post #447
dpierce9 wrote: post #136

The average lifespan of a company is 10 years.[0] The average lifespan of companies on the S&P is maybe a little more than twice that. Each year you have a 1/100 chance of seeing a hundred year flood. With a short lifespan the odds are decent that your company simply won’t see one. The question is then: how good of an idea is it to spend to be robust to them? Of course it is viciously circular: planning to not be rob…

I agree with this more than Ryan Peterson. Governments need to be built up to handle 100 year floods. Businesses standard life time don't last long enough to spend a ton of resources on betting towards those kinds of time scales.

Why? That’s what insurance is for… the less govt is prepared for 100 year floods the less people live on flood planes.

Re: What caused all the supply chain bottlenecks?

#574

Post by _3u10 »

kergonath wrote: post #561
qPM9l3XJrF wrote: post #544

Earlier quoted context omitted.

Sadly the incentives government officials face also often favor short time horizons. Therefore I favor any marginal increased investment for 100-year floods from any part of society

> Sadly the incentives government officials face also often favor short time horizons. Thanks in some part to the fundamentally misguided idea that governments should be run like businesses. > Therefore I favor any marginal increased investment for 100-year floods from any part of society Definitely agree. We are bad at dealing with this kind of risk profile, and we need to be more aware of this.

Government can’t even let private sector build houses for 1 year demand. I don’t forsee them being able to manage anything on 100 year timescales.

Just look at the climate change stupidity, any city in the world could build a 6 foot sea wall and give the middle finger to climate change in a year with minimal cost but instead we have all manner of stupid at an international level.

I used to live in a city that was in a rainforest and would run out of water like clockwork during the two months of the year it wasn’t bucketing down rain. It even had mountains with snowpack as a backup but they could never figure out how to build a dam an extra 6 feet higher so we wouldn’t run out of water. We had enough money to buy people heroin but couldn’t figure out how to not run out of water. There was never a heroin shortage, always plenty of that, they’d just buy more but if you wanted to water your lawn, get rekt bud, we don’t have any water.

To be fair regarding the heroin, it did cost about $500,000 per person to obtain enough heroin.

Re: What caused all the supply chain bottlenecks?

#575

Post by dismalpedigree »

stingraycharles wrote: post #526
dismalpedigree wrote: post #492

Earlier quoted context omitted.

If you think public markets are bad at creating poor long term incentives (they are) you should see what private equity does. 10x worse.

It highly depends upon who’s behind the private equity. As an anecdotal example that always stuck with me, Google post-public very quickly became a very different company, much less principled and “don’t be evil”. Yet they did have private equity. I think they key difference is that you can choose to a reasonable degree who your private investors are, where there is no such option with public investors, and public ma…

Even benevolent private equity forces companies to operate on a 3-5 year time window where the PE owner needs to maximize returns over the period. Inevitably results in lots of conversations along these lines. “Yes that would be good long term but we are not investing in that because it won’t add value before we flip the company”.

Re: What caused all the supply chain bottlenecks?

#576

Post by mckirk »

phreeza wrote: post #564
mckirk wrote: post #550

Earlier quoted context omitted.

Small correction: Each year you have a (1-0.5^(1/100))≈0.69% chance of seeing a hundred year flood, if I'm not mistaken (and assuming hundred-year-floods happen independently of each other). At 1% chance each year, it would actually be 'sixtynine year floods'.

No, if they arrive independently then they are best described by a poisson process, and the expected time to arrival is exactly 1/(event probability per interval). Not sure where you got the 0.5 from?

The 0.5 derives from 'in a hundred year interval, there's a 50% chance to observe the event', which was my intuitive interpretation of a 'hundred year flood'. But as so often in statistics, that intuition was wrong -- 1/100 is indeed correct. (I'm at least not alone in that erroneous interpretation: "A common misunderstanding is that a 100-year flood is likely to occur only once in a 100-year period."[0])

The better way of looking at it is probably: In a 100*n year window, you expect to see n such events, which makes it pretty immediately obvious that the yearly incidence probability is 1/100.

[0]: https://en.m.wikipedia.org/wiki/100-year_flood#Probability

Re: What caused all the supply chain bottlenecks?

#577

Post by csee »

stainforth wrote: post #476
chii wrote: post #459

Earlier quoted context omitted.

Why is that? they arent forced to "buy" at gunpoint.

I mean in the sense of certain goods, like one needs to physically survive. And also the things for your business to survive.

But people have been buying these necessities before the pandemic. If spending shifted from services to goods, that implies that it's non-essentials that people are increasing consumption of. Unless people started eating more?

Re: What caused all the supply chain bottlenecks?

#578

Post by macksd »

wsc981 wrote: post #469
EdwardDiego wrote: post #462

Earlier quoted context omitted.

The whole point of paper towels, or disposable nappies, is removing the labour cost of cleaning them. My ex-wife was a stay at home Mom for her religious reasons, and was determined to be the "best" Mom, only healthy food, no TV or devices, cloth nappies etc. Once we hit kid #3, the time needed to launder cloth nappies wasn't viable with two other kids on the go. I encouraged her to give disposables a go, and she was…

If you just get a bum shower as used in many East-Asian countries, you can get away with very little paper towel use and don’t have to clean towels as well. And these bum showers can be bought on Amazon quite cheaply and shouldn’t be too difficult to install on any toilet. You’d also be much cleaner I think. This is just one example of such a shower found on Amazon: https://www.amazon.com/gp/aw/d/B086W1YZSH/ref=sspa_…

But then we're back to people needing to purchase new items to accommodate sudden changes in lifestyle where it just didn't make any sense since the last major advance in technology / the last pandemic. Sure, we know we need to avoid disposable items right now, but as disposable items go paper products are pretty dang recyclable or compostable. Whereas at other times and places conserving water is far more critical.

Re: What caused all the supply chain bottlenecks?

#579

Post by throwaway0a5e »

superice wrote: post #571
erispoe wrote: post #554

Earlier quoted context omitted.

The same rebalancing happened in Europe, and Europe doesn't have close to the issues the US has regarding supply chain. Europe's major ports are automated and operate 24/7, port to hinterland relies much more on rail than trucking. Overall, the US supply chain was already very fragile and outdated.

Actually, I think barge transport is a much larger contributor than rail in the modal split of hinterland operations in Europe. Both Rotterdam and Antwerp have huge barge modal splits and large hinterland terminals, often trimodal.

And the US has pretty damn good freight rail. You just don't notice it because all those containers get transferred to trucks or unloaded at distributions facilities outside the beltways in which most of HN tends to live and does the last ~20-100mi on truck.

Re: What caused all the supply chain bottlenecks?

#580

Post by throwaway0a5e »

herendin2 wrote: post #516
zelon88 wrote: post #207

I worked at a company who made products on contract, but the contract stipulated the vendor we had to use to get the raw materials. The raw materials were just aluminum castings, but they were a custom shape specifically for this customer of ours. They could only be used for this one product. I noticed that the inventory levels of our vendor were dropping, but we weren't buying. Meaning our customer was ordering the…

Game theory. If the idea occurred to you, then one can almost guarantee it will eventually occur to others - and to someone at your competitor. With that understanding, there's only one rational course of action: to secure your supply before they do, and your competitor realized all this. The only real decision to make is whether to risk the more aggressive move of also locking up your competitor's supply.

There's risk to that. The customer company could have gone tits up or shit-canned whatever project they were using the finished castings for "because 'rona" leaving whoever is sitting on a year of castings in a bad position. There's risk to both approaches.
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