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What caused all the supply chain bottlenecks?

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Re: What caused all the supply chain bottlenecks?

#601

Post by makomk »

rand49an wrote: post #308
makomk wrote: post #212

Earlier quoted context omitted.

The original SARS didn't have the qualities needed to be a world-wide pandemic, though, and one of the big obstacles to that was that it was just too deadly. Not only do people who are so sick they have to be hospitalized not go out and socialize and spread the disease, all the hospitalizations and deaths gives a whole bunch of really obvious starting points for contact tracers - instead of only knowing about a tiny…

The UK test and trace program cost £37 billion, which was handed solely over to a company that has a long history of delivering projects poorly. By all good measures it wasn't effective in tracking COVID or preventing cases. In my opinion the government were rightly attacked over this issue.

See, this is what I mean about there being a lot of misinformation out there. That £37 billion wasn't handed solely over to any one company - political opponents of the current government kept on falsely claiming that it was all given to Serco, but in reality only a small fraction of the Test and Trace spending went to them: https://fullfact.org/health/test-trace-march-2021/ (I think most of the money that went to Serco was ultimately spent on employing the numerous call center staff required to actually scale up manual contact tracing too.)

Re: What caused all the supply chain bottlenecks?

#602

Post by dpierce9 »

evrydayhustling wrote: post #600
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…

Your raise an interesting question about whether private firms are the right actors to invest in long-term infrastructure. Alternatives include governments (whether via policy or public infrastructure) and also longer-lived industry consortiums. With that said, citing averages on companies can be pretty misleading. For example, family-owned businesses tend to last longer, with 1/3 reaching 60 years [0]. That naively…

All good points. The age of firms is definitely fat tailed. Further, it is hard to count firm survival (mergers don’t obviously destroy firms, is IBM the same company it was, etc). Also what a firm is has changed over time (legally, structurally, etc).

It would be interesting to see how many family generation changes family firms can survive. Obviously there are very old firms (some of which are closely tied to the gov: the British Royals, Aramco) but I would guess you have a step-like survival function.

Private firms (public or not) can and do build long-lived infrastructure. High voltage power lines are an example (maybe not a great example since they are heavily regulated). Expensive infrastructure has a long-term financing problem because DCF with any reasonable discount rate will essentially turn all earnings 30 years from now into nothing. The persistence of some government that will recognize the debt (or persist some legal entity that will receive the cash flow to service it) makes possible long-term financing. One solution is to make infrastructure cheap but that is hard (and maybe only possible in software).

Re: What caused all the supply chain bottlenecks?

#603

Post by greedo »

Gigachad wrote: post #431
arendtio wrote: post #210

Earlier quoted context omitted.

Even if you are right, what would be your solution? I mean, the problem is not that we lack transparency, but that we have run out of options to fight the bottlenecks. Having some stockpiles as buffers would be one options to fight the problem.

The solution is to wait. It's better to wait out very rare events than to waste constantly during normal periods. Very few people _need_ to have their new GPU or PS5 right now.

Waiting might be the best option, but inaction might also kill the patient. Think of it as a patient with arrhythmia. Sure the patient might simply have sinus tachycardia that goes away when the patient's fever dissipates. Or it might be ventricular fibrillation that can easily kill the patient.

Re: What caused all the supply chain bottlenecks?

#604

Post by TheRealDunkirk »

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…

You describe microscopically what's happening macroscopically: The US is experiencing runaway consolidation and monopolization in every market sector. It is the business plan of every VC-funded startup discussed on this forum to monopolize a market and extract ALL the profit from it. The excess capacity of every supply chain in the entire country has been liquidated for short-term profit over the past decade, and then COVID happened. No one seems to be calling out this behavior, so I expect it will continue.

Re: What caused all the supply chain bottlenecks?

#605

Post by rossdavidh »

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 reason just-in-time is to blame, is that JIT assumes you have a reasonably stable flow (yes, I worked in manufacturing where we studied JIT a lot). Yes, it was a shift from services to goods that provided the current shock, but it was JIT that meant the system could not adapt to shocks. If you have no buffers (or very small ones), then you cannot quickly adapt.

If you put a vase on top of your car and drive away, it's irrelevant which bump in the road causes the vase to fall off; it was bound to fall off eventually. The global supply chain was optimized for efficiency, to the point of fragility, and whether it was a pandemic or a war or something else, a shock was coming eventually. With climate change, we can expect more frequent weather-induced changes in the future. A supply chain which cannot handle frequent, large changes is too fragile, and that's what's wrong with JIT.

Re: What caused all the supply chain bottlenecks?

#606

Post by m4rtink »

kwertyoowiyop wrote: post #101
CityOfThrowaway wrote: post #79

Earlier quoted context omitted.

First one thing, and then the next. The spiral is in its early innings right now. Hold on tight!

With shipping containers being sent back to Asia empty rather than taking an extra leg to mid-America to fill up on US farm products to sell in Asia, is the price of soybeans and corn in Asia going to spike soon?

Do you really ship this stuff in containers rather than by bulk carrier ?

Re: What caused all the supply chain bottlenecks?

#607

Post by pnutjam »

darawk wrote: post #333
micromacrofoot wrote: post #329

Earlier quoted context omitted.

I’m willing to bet he has more cash on hand than we will make in our entire lifetimes… what’s the point of arguing how much it is? the point is that he has so much money that nothing really matters.

The point is exactly what I said in the rest of the comment. He has already paid taxes on the cash he has in hand. The only assets he has not paid taxes on are the shares in AMZN that he has not realized the gains on.

I haven't realized any gains on my house, but I pay taxes on it.

Re: What caused all the supply chain bottlenecks?

#608

Post by h2odragon »

theshrike79 wrote: post #521
KingMachiavelli wrote: post #186

How bad are the supply chain bottlenecks really? Compared to the amount of discussion on the matter they seem pretty minimal outside a couple sectors. I certainly don't see any lack of products being sold at grocery and big box stores. The only exception I see are some hot items like GPUs and game consoles but I don't they the supply chain itself is the constraint but rather the actual silicon. The only significant e…

Getting a basic door for inside your house has a 2 month wait, it used to be 2-3 days. A certain type of adapter (3/4 inch to 1/2 inch) used to attach modern washing machines to older water lines is completely sold out in every store on a 50km range from my house, no-one knows when it'll restock. All other sizes are fine.

so go from 3/4 to 1in to 1/2 and you're good.

Re: What caused all the supply chain bottlenecks?

#609

Post by xyzzy21 »

rossdavidh wrote: post #605
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 reason just-in-time is to blame, is that JIT assumes you have a reasonably stable flow (yes, I worked in manufacturing where we studied JIT a lot). Yes, it was a shift from services to goods that provided the current shock, but it was JIT that meant the system could not adapt to shocks. If you have no buffers (or very small ones), then you cannot quickly adapt. If you put a vase on top of your car and drive away,…

Exactly!

When I took inventory and supply chain course, JIT scared the shit out of me because it's was so obviously fragility.

Re: What caused all the supply chain bottlenecks?

#610

Post by DonHopkins »

erikbye wrote: post #553
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…

> I'm reminded of the old sarcastic comment that "Linux is free, if your time has no value". Wow, a thread about supply chains and you manage to take a cheap jab at Linux. In response, try running Windows on a computer you only use once a month. You can watch it update every time instead of getting work done. Linux you can update while working.

Not only:

"Linux is free, if your time has no value."

But also:

"Free software: more expensive than money."

Those old sarcastic comments remind me of Cygnus Solution's more up-beat slogan (they ported and supported free software like GCC, and were bought by RedHat):

"We Make Free Software Affordable"

Instead of just whining about cheap shots, Cygnus Solutions deftly channeled the doubts and problems raised by the first two slogans (which they didn't originate, but were going around at the time), into a successful service under the last slogan (which they did originate, in response).

https://en.wikipedia.org/wiki/Cygnus_Solutions

https://news.ycombinator.com/item?id=1641664

http://www.h-online.com/open/features/GCC-We-make-free-softw...

https://news.ycombinator.com/item?id=23884395

https://minnie.tuhs.org/pipermail/tuhs/2020-May/021225.html

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