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What caused all the supply chain bottlenecks?

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Re: What caused all the supply chain bottlenecks?

#671

Post by evandijk70 »

jjk166 wrote: post #652
cbdumas wrote: post #646

Earlier quoted context omitted.

I'm definitely outside my wheelhouse here, so maybe help me understand the current fixation on and criticism of JIT. Are you advocating for more buffers in supply chains generally? If the current scenario is one where goods purchases were simply deferred from early in the pandemic to later (with no real increase in total demand for goods) I can see that solving the issue to some extent. But my point is that total dem…

The problem is JIT is all about steady state operation, and hinders the ability to scale up. If you have a substantial buffer, when demand picks up you notice that you are drawing from your buffer at an increased rate and you order things early so that you can scale with that increased demand. It's okay if your suppliers need some time to hire additional labor or buy a new machine, even at this increased rate of cons…

Having inventory on the shelf during a crisis is a far greater risk to the survival of a company than failing to produce cars quickly enough after unexpected high demand. Cancelling chip orders was the safe play, not the risky one.

Re: What caused all the supply chain bottlenecks?

#672

Post by superice »

Kye wrote: post #632
throwaway0a5e wrote: post #579

Earlier quoted context omitted.

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.

That’s lovely. But it’s not going to be the 400 TEU that Rhine barges do.

Trains in Europe are about 90 TEU, with them being capped by terminal handling capacity and legal maximums. Rail length at terminals in LA seem to be similar to Rotterdam and Antwerp: 600-900m. Let’s assume US freight trains can double their capacity by double stacking their trains. 180 TEU per train is still well under an average barge size.

I couldn’t find modal split numbers for LA, but I’m willing to bet their trucking share is above the ~55% Rotterdam achieves (some 10-15% is rail, remaining share is inland barges)

Trains are ofcourse still way more efficient than trucks.

Re: What caused all the supply chain bottlenecks?

#673

Post by nuerow »

vietthan wrote: post #629
nuerow wrote: post #621

Earlier quoted context omitted.

> All businesses now complain about employee loyalty, but have we earned it? I'd say that business schools have been for the past few decades teaching that management has to be outright militantly hostile towards any employee, going through great lengths to work them to death and drop them at the drop of a hat. Thus, these people have been leading by example on how everything and everyone is replaceable, even creatin…

it's weird but the military got it. Soldiers fight for their brothers or ideology, not for the brass.

> it's weird but the military got it.

Not really. The US military is renowned for providing soldiers with a social security safety net that's unthinkable for the US's general population, encompassing healthcare, higher education and even social services.

Re: What caused all the supply chain bottlenecks?

#674

Post by rossdavidh »

eitland wrote: post #649
deelowe wrote: post #635

Earlier quoted context omitted.

Yep. The push for zero inventory, just in time, outsourced manufacturing created a traffic jam when there was no buffer to absorb the shock.

It might be worth nothing that Toyota - from where the JIT idea came - hasn't been as much affected by it as many others.

Toyota historically has worried more about keeping a close relationship with their suppliers, which means keeping them afloat during hard times. American automakers historically are less interested in that. My understanding was that Toyota's cuts in orders for parts were less drastic than their competitors.

Re: What caused all the supply chain bottlenecks?

#675

Post by Kye »

superice wrote: post #672
Kye wrote: post #632

Earlier quoted context omitted.

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.

That’s lovely. But it’s not going to be the 400 TEU that Rhine barges do. Trains in Europe are about 90 TEU, with them being capped by terminal handling capacity and legal maximums. Rail length at terminals in LA seem to be similar to Rotterdam and Antwerp: 600-900m. Let’s assume US freight trains can double their capacity by double stacking their trains. 180 TEU per train is still well under an average barge size. I…

That's a different level of the discussion tree. I was talking about rail appreciation in reply to someone talking about rail appreciation. HN's structure lets people talk about different aspects of the same main topic. It's neat.

Re: What caused all the supply chain bottlenecks?

#676

Post by jjk166 »

evandijk70 wrote: post #671
jjk166 wrote: post #652

Earlier quoted context omitted.

The problem is JIT is all about steady state operation, and hinders the ability to scale up. If you have a substantial buffer, when demand picks up you notice that you are drawing from your buffer at an increased rate and you order things early so that you can scale with that increased demand. It's okay if your suppliers need some time to hire additional labor or buy a new machine, even at this increased rate of cons…

Having inventory on the shelf during a crisis is a far greater risk to the survival of a company than failing to produce cars quickly enough after unexpected high demand. Cancelling chip orders was the safe play, not the risky one.

Having inventory on the shelf is only an issue if it cannot be sold, which would only be possible if car sales never resume, an incredibly improbable outcome to the crisis. Everyone knew people would be back to buying cars soon enough. On the other hand cancelling orders carries great risk as no one is going to wait around for you to get more stock, if you miss your opportunity to make a sale it's gone, hence the mad scramble by auto manufacturers to reverse course once it became clear they had miscalculated.

Re: What caused all the supply chain bottlenecks?

#677

Post by freemint »

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,…

I disagree deeply. If you have no buffers that means you can change what you produce without waste. JIT allows you to produce a customized car as it comes of the production line. it can adapt much more quickly then any system with a lot of stock.

The problem is not "the system reacts to quickly to our controls". It's "humanity when faced with uncertainty about the pandemic choose to optimize the controls over a to short time frame leading to regret". Economic ideologies also have impact on the choice of the time frame. Blaming that the system reacts to well to our controlls just because it reacting sluggisher might have had a trajectory under the same controls that would have caused less regret this time is my opinion very mistaken.

Re: What caused all the supply chain bottlenecks?

#678

Post by darawk »

pnutjam wrote: post #607
darawk wrote: post #333

Earlier quoted context omitted.

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.

Yes, but your property tax rate is a much lower recurring rate than the capital gains tax rate. In fact, a tax like that on unrealized gains would probably be a much better way to structure things. You pay 1% a year on unrealized gains until they are realized, at which point you can deduct what you've already paid. I guess this would be annoying to calculate, though.

Re: What caused all the supply chain bottlenecks?

#679

Post by kergonath »

jjk166 wrote: post #657
kergonath wrote: post #561

Earlier quoted context omitted.

> 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.

The short time horizons for governments is due to election cycles. Projects that win votes in the next election are prioritized over things that will benefit future administrations. This often leads to wildly inefficient uses of resources, such as projects being regularly cancelled and restarted, and ignorance of maintenance costs. Running the government "like a business" is meaningless rhetoric and no one can agree…

Sure, because bloat becomes revenue when it goes from government-run to a company.

Re: What caused all the supply chain bottlenecks?

#680

Post by bwilli123 »

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.

https://medium.com/@ryan79z28/im-a-twenty-year-truck-driver-...
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