What caused all the supply chain bottlenecks? • Hacker News Board

Re: What caused all the supply chain bottlenecks?

#261

Post by dragonwriter » Thu, Oct 28, 2021, 9:31 PM UTC

gruez wrote: post #249

TAForObvReasons wrote: post #233

Earlier quoted context omitted.

There are genuine "disruptive innovations" that are not rent seeking, but by and large that is not what we've seen. Picking on Amazon for a moment, their original "innovation" was a sales and use tax dodge: based in Washington, they were able to sell books to California without having to charge the relevant sales tax upfront. That margin gave huge room to provide free shipping and other customer conveniences. Technic…

>Picking on Amazon for a moment, their original "innovation" was a sales and use tax dodge: based in Washington, they were able to sell books to California without having to charge the relevant sales tax upfront. That margin gave huge room to provide free shipping and other customer conveniences. Sales tax in california was 7.25%. While not having to charge tax was a competitive advantage, I'm skeptical that was the…

> Finally, the exemption isn't limited to e-commerce sites.

It isn't really an exemption, anyway, it is a limitation under then-existing federal law on the power of states to impose taxes.

> According to wikipedia, it includes "companies doing mail order, online shopping, and home shopping by phone".

That's misleading.

What it actually applied to, at the time, was companies without physical presence in the state into which the sale was being made. So companies that exclusively did those things would be covered (except in the State they operated from, but they could operate in a no sales tax state), but companies that did them alongside physical operations would not, and before the web, those other models alone had so much less access to customers that the sales tax hack wasn't worthwhile.

> Why did amazon dominate while sears languished?

Because while Sears also had mail order business, it was a ubiquitous brick-and-mortar retailer, and thus was paying sales tax on its mail order sales, because they had retail everywhere.

Re: What caused all the supply chain bottlenecks?

#262

Post by xyzzyz » Thu, Oct 28, 2021, 9:31 PM UTC

lupire wrote: post #230

xyzzyz wrote: post #198

Earlier quoted context omitted.

> Yep, the capital owning class just doesn't care if their businesses go into shock because they already have their cash in hand. Billionaires have relatively very little cash in hand. Their billions typically are in form of business equity, and so they very much care of the businesses go into shock.

Billionaires have massive personal loans (compared to human needs, not compatrd do their owned equity) collateralized by their business equity.

Yes, they are “massive” by normal people’s standard, but they are usually minuscule relative to their equity holdings.

Re: What caused all the supply chain bottlenecks?

#263

Post by nickff » Thu, Oct 28, 2021, 9:32 PM UTC

quartesixte wrote: post #163

philwelch wrote: post #125

Earlier quoted context omitted.

I’m not sure this is the case. The problem is that RoE is a metric that can be gamed for short term gains while incurring long term risks. This is more likely to be an issue with short term career-oriented leadership. Founders are more likely to have a concern for the long-term success of the business. Simply put, founders are not the people sacrificing their own companies’ long term success in exchange for enhancing…

Toyota has over the years adjusted how their JIT operates, and are now known to stockpile certain critical parts. This is pure speculation, but I also wonder if Japan’s geography + slightly more diverse economic landscape (lots of small businesses that do nothing but make components) help make their JIT more resilient to shocks. With Osaka, Tokyo, and Nagoya all within an area less than the length of California, it’s…

Toyota became significantly less JIT after the 2011 earthquake and tsunami, which severely disrupted their supply chain. That said, JIT involves many useful lessons for organizations with higher inventory levels as well.

Re: What caused all the supply chain bottlenecks?

#264

Post by urthor » Thu, Oct 28, 2021, 9:32 PM UTC

arendtio wrote: post #210

legitster wrote: post #158

No, no, no! Stockpiling is not a solution to a bottleneck! In the grand scheme of things, having a couple weeks of extra inventory on hand will not help you weather a 100 year storm. But it will increase waste - inventory that you have to throw away when there are defects or when they become obsolete. Imagine trying to predict the run on lumber, and the solution was to have kept a bunch of lumber sitting in yards rot…

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.

Is there even a better solution than to let the current supply chain issues play out?

The status quo with supply chains and manufacturing is there for a reason, silicon in particular reflects its boom bust cycle as well as the absurd costs of CapEx.

I think people are reaching when they table the hypothesis that current supply chain issues are due to mistakes or mismanagement of some middle manager, in some corporation somewhere.

Maybe, just maybe, the cost of having a bunch of spare infrastructure for a once in a lifetime rearrangement of the supply chain due to Covid isn't worthwhile?

Re: What caused all the supply chain bottlenecks?

#265

Post by JoshCole » Thu, Oct 28, 2021, 9:32 PM UTC

evilotto wrote: post #33

He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…

I think a lot of people just read emotional language and turn off their minds. So let's expand out what you said to make it a bit easier for others to reason about what you said.

We're talking about founder owned companies owned by billionaires. So let's use an example of one: SpaceX. You're maligning "disruptive innovation" so let's expand out your claim with the specific example: an order of magnitude reduction in the cost of space flight and the introduction of competition in rural internet service.

So you're saying enabling access to other planets and the moon while providing people in isolated areas with internet service is an example of squeezing out profits and you're saying that you think it is rent seeking. Rent seeking is defined as an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity. Typically, it revolves around government-funded social services and social service programs. We already had programs to access space. They were an order of magnitude more expensive. We already had programs to provide internet. They didn't serve well the subset of people that are in remote areas. So in both cases it just isn't the case that the company is doing rent seeking.

In other words, you are completely wrong when we use a specific example.

This applies to more specific examples. Lets use the specific example of Flexport. It is owned by a founder and you're replying to things posted by them so it's even less of a reach than before.

They are introducing computers to an industry that has competitors from the 1400s era. These competitors sometimes have legacy processes built on physical paper and for some of them excel is an example of the use of cutting edge technology. You're saying that doing better than that for people using modern technology is an example of rent seeking.

Re: What caused all the supply chain bottlenecks?

#266

Post by Barrin92 » Thu, Oct 28, 2021, 9:33 PM UTC

It's true but just looking at supply chains or 'the economy' misses that this isn't just how we do business, our entire culture runs on fumes.

People during the pandemic didn't just learn that their toilet paper is delivered just on time, people learned that's how their friends and family are organized. The amount of people who were basically alone during the last two years with no actual communal support if there even is still such a thing as a community at all was staggering.

The founder of flexport thinking that giving founders more control isn't exactly surprising but misses the point that the problem he's talking about has already infiltrated just about everything.

Re: What caused all the supply chain bottlenecks?

#267

Post by chrisan » Thu, Oct 28, 2021, 9:34 PM UTC

blhack wrote: post #181

legitster wrote: post #158

No, no, no! Stockpiling is not a solution to a bottleneck! In the grand scheme of things, having a couple weeks of extra inventory on hand will not help you weather a 100 year storm. But it will increase waste - inventory that you have to throw away when there are defects or when they become obsolete. Imagine trying to predict the run on lumber, and the solution was to have kept a bunch of lumber sitting in yards rot…

He's not suggesting stockpiling, he's suggested increasing the amount of RAM in the system (to us a computer analogy).

What exactly is the "RAM" if not inventory?

Re: What caused all the supply chain bottlenecks?

#268

Post by Agathos » Thu, Oct 28, 2021, 9:34 PM UTC

evilotto wrote: post #33

He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…

The billionaires' tax he mentioned is dead anyway, so that part of the discussion is moot. It was floated a couple of days ago as a possible addition to the reconciliation bill, but it's not in the framework announced this morning.

Re: What caused all the supply chain bottlenecks?

#269

Post by darawk » Thu, Oct 28, 2021, 9:35 PM UTC

revolvingocelot wrote: post #255

gruez wrote: post #205

Earlier quoted context omitted.

>Yep, the capital owning class just doesn't care if their businesses go into shock because they already have their cash in hand. You do realize when we talk about jeff bezos being a billionaire, it doesn't mean he has his billions in gold/cash in a vault somewhere? The overwhelming majority of his wealth is tied in various financial assets (eg. equities) that certainly do get affected when "businesses go into shock".…

>it's still in his best interest to ensure that the economy doesn't crash Technically, yeah! Functionally, though, if the Even Greater Depression arrived tomorrow? He'd still be the richest man alive, and probably even more powerful than he already is right now thanks to how Amazon and AWS would get to take over more failing social institutions. Sure, a falling tide lowers all boats, but Bezos will still comfortably…

None of this is the point, though. The point is that Amazon wouldn't have achieved what it has if Bezos was forced to slowly divest control of his company over the last two decades.

Bezos does not have his cash in hand, for the most part. To the extent that he does have cash in hand, he has already paid taxes on that cash. To the extent that he has not paid taxes on his wealth, he is fully incentivized by the share price of AMZN.

Re: What caused all the supply chain bottlenecks?

#270

Post by lvl100 » Thu, Oct 28, 2021, 9:35 PM UTC

Current supply chain model is largely based on the likes of Walmart. They are also the company that pushed to manufacture goods in China. Walmart destroyed the rust belt. Walmart destroyed small businesses across the country.

Walmart is the reason why US middle class got screwed. Walmart is the reason why we saw unabated rise in China. Walmart is boomer legacy.