In short: over optimization.
In ML we fight this with regularization and dropout. However I‘m not sure how to transfer these ideas to economics.
What caused all the supply chain bottlenecks?
631–640 of 690 posts
Re: What caused all the supply chain bottlenecks?
#632Earlier quoted context omitted.
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.
More of HN needs the experience of waiting for a freight train to finish crossing the road. Count containers with a stopwatch and you can get an idea of how many trucks worth of containers a freight train can move vs the adjacent highway. It's still much more time and fuel efficient even slowed down for the crossing.
Re: What caused all the supply chain bottlenecks?
#633All 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 main take-way is, the design of the system is not fluid enough to scale up or down based on the demand. Rather, it has too many bottlenecks for it to choke and eventually die.
Re: What caused all the supply chain bottlenecks?
#634Earlier quoted context omitted.
But my point was that variable but decreasing costs seem to throw NIFO off too. Aircraft are the extreme example but I'm sure the first of Tesla's latest car model costs more to produce than the thousandth. Not even counting capital expenses but just by things running smoother with practice. NIFO seems to fall short here too.
I’m not sure that’s always or necessarily true. The variable costs will go down over time if there are process improvements, but eventually there are diminishing returns to those. Meanwhile, the cost of materials and labor could rise.
Sure it's not 100% of the time but that's besides the point still. Isn't NIFO a bad fit for the times when per-unit costs are decreasing? And since this happens fairly regularly it seems like a bad choice period, or at least not obviously better than FIFO or LIFO.
Re: What caused all the supply chain bottlenecks?
#635All 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,…
Yep. The push for zero inventory, just in time, outsourced manufacturing created a traffic jam when there was no buffer to absorb the shock.
Re: What caused all the supply chain bottlenecks?
#636All 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…
I listened to a podcast recently that spoke specifically about how the container unloading is a major issue. Certain areas have zoning restrictions about stacking empty zoning containers only 2 high (Santa Monica??). So the container hauling trailers have largely got stuck holding empties so they can't clear the docks which means we aren't clearing the ports quick enough. I know there have been recent strides to to b…
That or Santa Monica (?) Will become full of sky scrapers of shipping containers as no capacity is available to haul away the empties and there's no destination for them
Re: What caused all the supply chain bottlenecks?
#637Earlier 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.
That sounds nice. By contrast, the US makes moving goods between two US ports illegal. Okay, it doesn't technically do that, the Jones Act just requires you to use a US-owned US-built US-crewed US-operated ship. These ships, in general, don't exist . Oh, sure, there are a few that go back and forth to Puerto Rico, and there are a few wastewater ships running up and down the East River in New York, but no one would dr…
>Fish shipped from Alaska are unloaded on the east coast in Canada, where they put on trucks, and the trucks are put on a carrier train which makes a round trip back and forth for the length of the cargo terminal to qualify as being "shipped by Canadian rail" for US legal purposes, and then the trucks drive into the US with the fish. A related law afflicts cruise ships, which always stop somewhere in Canada, Alaska, or the Caribbean, on their way between US ports.
Can you find a citation for this, I would love to add the example to an upcoming book.
Re: What caused all the supply chain bottlenecks?
#638Earlier quoted context omitted.
> you don't want to find out that you're out of stone when your bots stop autoreplacing your walls and the biters flood in But stone is used in more than just walls. You also use stone to make concrete. So what do you buffer? Do you buffer stone? Cause buffering stone didn't actually solve anything (your "stone reserves" are the mine itself. If you really wanted to see "how good" your reserves are, you check how many…
This type of buffering actually leads to the sort of supply chain bottlenecks we are experiencing. If the demand for stone suddenly rises to a point where much more walls and concrete is demanded, you get a massive delay in the production line because the stone needs to get mined and transported and crushed and transported &c before it even reaches the wall factory. It's not entirely dissimilar to the chip shortage w…
> If the demand for stone suddenly rises to a point where much more walls and concrete is demanded, you get a massive delay in the production line because the stone needs to get mined and transported and crushed and transported &c before it even reaches the wall factory.
That doesn't take long. And you'd have enough walls as a finished product to wait out that small delay. (A tiny percent of what you'd have if you tried to buffer the full supply.)
> It's not entirely dissimilar to the chip shortage we are seeing. Our processes require a long lead time, which depends on accurate forecasting to work well.
The thing making the chip shortages so bad and hard to catch up is that we don't have enough manufacturing capacity. For both chips and the supplies they need. Buffers would not help much, because all the spare capacity we had wouldn't have filled them very far, and then they would have quickly drained back to leave us exactly where we are.
If you want to handle longer term disruptions then you need to have more factories, not more warehouses.
Re: What caused all the supply chain bottlenecks?
#639How 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…
I went for a flu vaccine at CVS this week and the person giving it to me explained the process would be a bit different because they were using much larger needles than usual. I asked why and they said it was due to supply chain issues. While it effectively didn’t change much for me, it also was easy to see that with a bit more pressure, some pretty critical supplies could simply not be available in sufficient quantities.
Re: What caused all the supply chain bottlenecks?
#640Earlier quoted context omitted.
That sounds nice. By contrast, the US makes moving goods between two US ports illegal. Okay, it doesn't technically do that, the Jones Act just requires you to use a US-owned US-built US-crewed US-operated ship. These ships, in general, don't exist . Oh, sure, there are a few that go back and forth to Puerto Rico, and there are a few wastewater ships running up and down the East River in New York, but no one would dr…
>Fish shipped from Alaska are unloaded on the east coast in Canada, where they put on trucks, and the trucks are put on a carrier train which makes a round trip back and forth for the length of the cargo terminal to qualify as being "shipped by Canadian rail" for US legal purposes, and then the trucks drive into the US with the fish. A related law afflicts cruise ships, which always stop somewhere in Canada, Alaska,…
Wikipedia covers the railway:
https://en.wikipedia.org/wiki/Bayside_Canadian_Railway
You can also follow a recent mini-saga in The Wall Street Journal:
- "Mr. Biden’s Fish Story", Sept. 9, 2021
- "How 26 Million Pounds of American Fish Got Stuck in Canada", Sept. 16, 2021
- "A Victory Over the Jones Act", Oct. 11, 2021
You can also read about it from the people who want to hold these fish shipments hostage to their vessels: https://www.americanmaritimepartnership.com/articles/alaskan...
You can also read about Filet-o-Fish switching from Alaskan to Russian fish (and obviously NOT to American vessels) as a consequence of this saga: https://www.maritime-executive.com/article/cbp-bayside-canad...