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How we broke the supply chain

prospect.org

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Re: How we broke the supply chain

#61

Post by maroonblazer »

Retric wrote: post #35
asf9b8hqw4n wrote: post #25

I appreciate most of the arguments here, but take strong exception to the validity of blaming "just-in-time logistics". Consider grocery store A that uses Just-in-Time and grocery store B that does not: Grocery store A (with JIT) has much less inventory, which has a variety of benefits. It needs fewer square feet, which reduces rent/heating/lighting/cleaning costs and therefore reduces prices; this also means more re…

JIT doesn’t really apply to grocery stores as food rots, it’s a very different supply chain vs microwaves. JIT only saves meaningful amounts of money when you had significant amounts of inventory sitting around. The difference between 2 days and 3 days of parts at a factory simply doesn’t matter. The difference between 3 days and 3 months worth of parts is a big deal. That said, the entire reason companies used to ha…

What percentage of a grocery store's inventory is perishable? There's plenty that has a pretty long shelf life. E.g. canned goods, paper towels, bathroom tissue, bottled goods, vacuum-sealed items, etc.

Re: How we broke the supply chain

#62

Post by twofornone »

pessimizer wrote: post #39
lmm wrote: post #34

Earlier quoted context omitted.

One could argue that if we actually committed to market fundamentalism it would work, but price-gouging laws prevent the market from addressing this kind of risk.

Raising the prices of what has been stocked won't feed any more people, it'll just guarantee that the wealthiest won't go without. If you're talking about raising demand in order to raise supply, that implies that the virus will react to that and retreat accordingly. Or that regulations will be relaxed. Or that people will be paid enough to show up to work sick.

It would probably deter hoarding though. Much harder to justify buying up all the toilet paper when its 3x the usual price.

Re: How we broke the supply chain

#63

Post by thephyber »

lmm wrote: post #58
thephyber wrote: post #57

Earlier quoted context omitted.

> But making it profitable to be the one with stock on hand in an emergency would encourage holding bigger buffers during the good times. This isn’t always true. It is only the case if the long term incentives outweigh the short term incentives. If the good has a long shelf life and it is a good use of the retailer’s capital, sure. Those are not certain conditions. Also, goods can go obsolete. Would it have been a go…

> If the good has a long shelf life and it is a good use of the retailer’s capital, sure. Those are not certain conditions. Also, goods can go obsolete. Would it have been a good investment for CircuitCity to keep an extra 1000 units of Microsoft Zune in stock in case there was a pandemic? Those are the kind of questions that markets are great at figuring out, if it wasn't illegal to sell at an actual market-clearing…

Citation needed.

When the price of wood and paint went through the roof in summer 2020, there were no prosecutions for price gouging.

But consumers did change behavior to delay their purchases until prices were more reasonable. Price elasticity is not a linear function.

Re: How we broke the supply chain

#64

Post by tedunangst »

maroonblazer wrote: post #61
Retric wrote: post #35

Earlier quoted context omitted.

JIT doesn’t really apply to grocery stores as food rots, it’s a very different supply chain vs microwaves. JIT only saves meaningful amounts of money when you had significant amounts of inventory sitting around. The difference between 2 days and 3 days of parts at a factory simply doesn’t matter. The difference between 3 days and 3 months worth of parts is a big deal. That said, the entire reason companies used to ha…

What percentage of a grocery store's inventory is perishable? There's plenty that has a pretty long shelf life. E.g. canned goods, paper towels, bathroom tissue, bottled goods, vacuum-sealed items, etc.

Probably a lot as a percentage of sales. The fresh section of my grocery store might be 20% of space, but there's usually two restockers working compared to one elsewhere in the store.

Re: How we broke the supply chain

#65

Post by arrosenberg »

nine_k wrote: post #29
skybrian wrote: post #17

A little bit of central planning can go a long way. Nobody was in charge of figuring out how to gracefully shed load at capacity, so when demand went up by 20%, the system overloaded and latency went through the roof. Market fundamentalism (we don't need to plan, the market will do it) obviously screwed up here, but it doesn't follow that everything that the American Prospect hates is actually bad.

The problem with central planning is that the incentives of the planners are skewed by their position. They are not the ones whose business would be affected by the plans they make, or by failure of these plans. Look at the history of the Soviet Union which pioneered the practice; eventually they developed very intricate workarounds. Look at China with its empty cities built through central planning. Look at the effi…

The Soviet Union and China aren't "a little bit of central planning" though. They're entirely centrally planned, with little to no market influence.

Having the markets captured by private actors winds up badly too - that's why "a little bit of a central planning" goes a long way - it can take the rough edges off of Capitalism and structure markets to result in fair, distributed outcomes.

Re: How we broke the supply chain

#67

Post by glkjlkjerh »

pessimizer wrote: post #38
asf9b8hqw4n wrote: post #25

I appreciate most of the arguments here, but take strong exception to the validity of blaming "just-in-time logistics". Consider grocery store A that uses Just-in-Time and grocery store B that does not: Grocery store A (with JIT) has much less inventory, which has a variety of benefits. It needs fewer square feet, which reduces rent/heating/lighting/cleaning costs and therefore reduces prices; this also means more re…

> to weather a shortage like recent COVID shortages It's been 2 years.

No post body was provided.

Re: How we broke the supply chain

#68

Post by glkjlkjerh »

pessimizer wrote: post #41
metacritic12 wrote: post #8

When I first opened the site, I wondered if it was a more technical/wonkish dive, or whether it was a political take. Looking at the root site prospect.org made it clear it's the latter. Don't get me wrong, their thesis can still be right and their fact presented are still valuable, but this is like reading about "is free trade good" in the Economist. I would take away the facts, not the conclusion.

So just pure ad hominem? No reference to the article, just the url?

[flagged]

Re: How we broke the supply chain

#70

Post by closeparen »

What’s the moral framework here? Globalization, financialization, and deregulation got you all this good cheap stuff to buy in the first place.

If you’re a de—growth proponent it should never have been available. The supply chain crisis is one of the best things that’s ever happened.

But if you think it’s actually bad, what’s the argument here? It would be better to have always lived as if in the jaws of a disaster, to avoid the hedonic adjustment when one actually strikes?

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