51–60 of 322 posts
So that means we have to start looking at local resiliency and what that means instead; arguably this is where parts of the environmental movement are way ahead, such as the "transition towns" movement. And anti-consumerism in general: there's no supply chain for something you don't buy.
Earlier quoted context omitted.
Obviously. It needs to be enshrined in law. Stress tests, like for banks. It would also be more efficient / profitable for banks to keep lower capital reserves... Edit: alternatively, countries could be much more trigger-happy when it comes to banning flights from potentially infected areas where some kind of virus starts - basically a lot of false alarms. Companies would simply have to adapt.
Another possibility: don't do any industrial bailouts and let high-risk investors take their medicine. Next time, risky businesses will find it more expensive to get capital, as investors realize some things they weren't thinking about before.
Counterpoint: YKK (look at your zipper) relies on absolutely no one else for its supply chain [0]. This could easily be seen as a waste by those who would say YKK should just source its metal from the foundry down the street. It's easy to do a quick thought experiment in your head to think about how feasible it might be for every company to vertically integrate the way YKK has. On the other hand, YKK can't get jerked…
Never heard of them. Their company setup is pretty impressive. However to say 'relies on absolutely no one else for its supply chain' is an extreme exaggeration and frankly impossible. They don't make the computers, fiber optics, switches, exchanges, or software that their web site requires to run. They don't own the fleet of trucks, boats, and planes required to get their product to their customers - or their raw ma…
Because they don't need to. The quality of their network setup has no, utterly no, relationship to the quality of the final product - the machines and materials however do have such a relationship and therefore it's done in-house.
Additionally this vertical integration removes the incentive for a supplier to cut corners somewhere for more profit - which is something that Tesla and SpaceX also have discovered and apply it wherever they can.
I feel like the problem is less that supply chains are globalized, and more that they aren't redundant. By that I mean, there's too much reliance on China as the primary producer/exporter for countless industries and products. Having just one nation account for such a large share of manufacturing introduces single points of failure. It would be wise to have multiple sources for any given good, especially if it's esse…
Exactly! I have always thought it was insane from a national security perspective to allow functionally all of key manufacturing capabilities (e.g., microprocessors) to go offshore. Nevermind the risks of inserted backdoors, etc, just the external sources of failure rapidly become too great. Yes, this would require subsidies & regulations, and be on a quarter-to-quarter and in most fiscal years "inefficient" use of c…
I am not sure, a completely dependent world may make us safer as wars will very hard to execute.
The problem is that almost no one buys products based on the stability of the supply chain, so irresponsibly-global supply chains will beat out responsibly-global ones on price. The problem is our tools to addressing this are either (a) some sort of tariff arrangement, which will almost certainly be political footballs far more than they will address any real problem, or (b) some regulatory/compliance arrangement, wh…
> The problem is that almost no one buys products based on the stability of the supply chain, so irresponsibly-global supply chains will beat out responsibly-global ones on price. We should qualify the term "irresponsible" here: 1) If we somehow avoid events like covid19 for an entire decade (for example), in retrospect the self-imposed inefficiencies could be called "irresponsible". I think the real issue is that th…
This is true of financial companies too. For example, banks that are run to survive rare events like global pandemic or world war cannot compete with banks that ignore the possibility of such events during normal times.
The obvious question is, should societies impose limits on competition to ensure there is always a minimum baseline level of redundancy in the economy, and if so, what kinds of limits? I don't know of any obviously good answers to this question.
[a] See, for example, https://news.ycombinator.com/item?id=22628239 and https://news.ycombinator.com/item?id=22628157
Earlier quoted context omitted.
The problem is how long it takes for that to occur. If the bankruptcies occur immediately, then people learn. If the bankruptcies occur 30 years down the line when a rare event occurs, then the high-risk investors are the only ones left in the market.
If investors can comprehend the 30-year T-bill, then they can price in a bankruptcy expected 30 years in the future. If we can sit here and figure out on our own that a business that will fold if its revenue decreases by 10% for longer than a month is not worth as much as its P/E ratio would naively suggest, then surely other people can figure it out too.
People already invest on much shorter timelines than 30 years.
The problem is that almost no one buys products based on the stability of the supply chain, so irresponsibly-global supply chains will beat out responsibly-global ones on price. The problem is our tools to addressing this are either (a) some sort of tariff arrangement, which will almost certainly be political footballs far more than they will address any real problem, or (b) some regulatory/compliance arrangement, wh…
Hm, what about some kind of "chaos monkey" where a random number generator decides which countries will be embargoed and for how long? (Half-joking.)
Robotic or biological?
Perhaps COVID-19 is a chaos-monkey?
Earlier quoted context omitted.
> It seems to me like the problem is just that supply chains aren’t legible. There are a number of efforts to make supply chains in all sorts of sectors more transparent using blockchain-like protocols. So this will hopefully improve in the future.
Over a decade ago, the supply chain hype was RFID chips. Now, more htan ten years laer, they are not used besides your occasional pallet tracking. or for hteft preventin at shops. And RFID would just have replaced bar codes, so no process changes necessary for a first implementation. Blockchain is a different beast. And most companies wouldn't like the full transparency that comes with it. Decentralized ledgers would…
There would have been changes necessary. RFID chips fall as electronics under RoHS and probably regional/national recycling regulation which means that their introduction into products would cause an enormous overhead. Additionally chips cost at least 10ct each in bulk which means for a lot of 1m units you would lose at least 100k $ in profit (or offer the product for more money, which is ... difficult to do when dealing e.g. with Walmart).
The only way RFID could have taken off would have been if governments mandated their usage.