[kublikhan]

I was just watching a video discussing all of the shortages going on now. The video argues COVID was just the straw that broke the camel's back. The real problem was the Just In Time(JIT) model manufacturers use. Or rather, their flawed implementations of it. Toyota was actually the company that created this model. It worked so well, everyone copied it. But they copied it badly. Or as the video puts it: Companies have “created a system that’s less effective and less resilient but can impress shareholders through short-term savings. How Toyota has effectively implemented this system fills books but many are just reading the covers.”

To give one example: one of the central tenets of JIT manufacturing is the elimination of excess inventory. Toyota went with the thinking that at some point a supply disruption will happen. It is inevitable. The trick is to keep enough inventory on hand that you can get through the supply disruption. But some supplies take longer to get after a disruption. Toyota found this out the hard way after the 2011 earthquake. Getting resin for all of their plastic door panels was resourced very quickly after the disruption. Their computer chip suppliers, not so much. So Toyota decided to increase inventory of computer chips so when the next supply disruption of computer chips hits they would be ready. They made a number of other changes to their JIT model as well to add more resiliency. So when the current global chip shortage hit, Toyota was ready, others were not.

It's not all bad news though. The other automakers are now going through the same learning experience Toyota went through in 2011 and are making changes: increasing inventory, reshoring/nearshoring, working more closely with their suppliers, etc.

Anyway, here's the video if you want to watch it:
Why There are Now So Many Shortages (It's Not COVID)

This article has some interesting thoughts on the topic as well.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('kublikhan', 'I') was just watching a video discussing all of the shortages going on now. The video argues COVID was just the straw that broke the camel's back. The real problem was the Just In Time(JIT) model manufacturers use. Or rather, their flawed implementations of it. Toyota was actually the company that created this model. It worked so well, everyone copied it. But they copied it badly. Or as the video puts it: Companies have “created a system that’s less effective and less resilient but can impress shareholders through short-term savings. How Toyota has effectively implemented this system fills books but many are just reading the covers.”

[Newfie]

Just in Case supply lines.

https://gcaptain.com/maersk-encourages- ... ain-model/

I bought distribution center REITS last year.

Outcast, you ask “do we learn?”. From what I can tell and from my readings, NO. Humans are not programmed to accurately evaluate longer term threats. We are good at short term threats, a few days at most.

The book that addresses this head on, and discusses how to overcome it, is “Thinking Fast and Slow.”

[Pops]

I think of JIT just as I do people who bring home dinner each night in a bag and have nothing in the cupboard but half a box of stale Sugar Pops. It works fine as long as everything else works fine. The problems come when there is a problem because there is no slack. Rather than the critical path jumping from one item/task to another, everything becomes critical.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('Pops', 'I') think of JIT just as I do people who bring home dinner each night in a bag and have nothing in the cupboard but half a box of stale Sugar Pops. It works fine as long as everything else works fine. The problems come when there is a problem because there is no slack. Rather than the critical path jumping from one item/task to another, everything becomes critical.

[Newfie]

Your left/right alignment is similar to mine.

I get a lot of shit from liberal friends for my immigration ideas, but ai see it as a common sense reaction to long term (planning) problems. What do we do with all the cheap immigrant labor when AI eliminates their jobs? Just an example.

[evilgenius]

This seems related to the story of the recent pipeline ransomware attack. That had people lined up for fuel. Because everyone decided to fill their tanks at once, there were shortages. The gas station system isn't designed, in any place, for people from all of the surrounding houses to all come at once and fill up their tanks. The bottlenecks came in unexpected places, sort of. There aren't enough tanker delivery drivers, for instance.

Supply and demand eventually takes care of all of these types of things. What I worry about is whether the resolution comes about in an inhumane manner. You can just as easily have a more limited operation that uses heavy equipment, because of the investment of capital, and only employs a few men vs. an open pit and thousands of men carrying burlap sacks on their backs up rickety wooden ladders.

I like capitalism, but it isn't the sole component in the success or failure of a nation. There are other things that bear upon that, like the legal environment toward property rights. If you discover something as a citizen of one of those countries that don't have very well developed ideas about such things, whose property is the discovery? Do you get told to take your crust and walk away? Does the "collective" come in and introduce you to what it means to be told, 'no?' Or, do you get the opportunity to make something of your discovery? How much financing is available to artisanal operators of any kind of business? What are the barriers to entry for the average entrepreneur in that society? Is money available to women?

A lot of the problems that are associated with the type of conservative thought that many of these other countries possess can be solved by introducing not only more liberal, but more pertinent financing. If a woman can buy a goat that can make her money because of a loan she got, then maybe she won't have two and half more children? World population matters, as does the quality of life of those living in that population. A rightly targeted scheme, that appealed to people both large and small where they needed it, might do a better job at raising all boats. The thing is, that can't come at the expense of running the most efficient type of operation. And the last thing you want to do is pit, figurative pun intended, one of those against hundreds of men in a pit. The efficient operation is usually so much more efficient that there really is no comparison.

Amazingly, human beings deal with these dichotomies every day. It's getting worse in the developed world. It's already that bad in the developing world. People need to at least be able to count on a consistent approach, so that they can plan. The level of corruption doesn't help.

[mustang19]

All these catastrophes are because the land is full. The plagues, the warehouse shortage and quantum effects complicating 7nm production is because all the trends have played out and there's nowhere else to go.

[Newfie]

Mustang,

I think there is some roomn for growth before the absolute peak. That is not a good thing.

OTOH it strikes me that the worldwide reaction to Covid indicates that folks worldwide are deeply concerned about our species health and stability. I suspect there is a nearly global gnawing feeling of imminent collapse.

Not positive, but strikes me as making sense.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('mustang19', 'A')ll these catastrophes are because the land is full. The plagues, the warehouse shortage and quantum effects complicating 7nm production is because all the trends have played out and there's nowhere else to go.

[mustang19]

$this->bbcode_second_pass_quote('Outcast_Searcher', '')$this->bbcode_second_pass_quote('mustang19', 'A')ll these catastrophes are because the land is full. The plagues, the warehouse shortage and quantum effects complicating 7nm production is because all the trends have played out and there's nowhere else to go.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('mustang19', '')$this->bbcode_second_pass_quote('Outcast_Searcher', '')$this->bbcode_second_pass_quote('mustang19', 'A')ll these catastrophes are because the land is full. The plagues, the warehouse shortage and quantum effects complicating 7nm production is because all the trends have played out and there's nowhere else to go.

[evilgenius]

When did waxing poetic become anti-science or anti-truth? It is possible to extend the need for precision too far. Not everything, especially those things deliberately appealing to our emotions which we full well know are doing so, needs to pass the highest test. Not that it isn't good ground to stake out. Only that the best guard dogs don't bark at just anything. If there really is a truly credible threat they treat it differently than some teenager who threw his frisbee over the wall, you hope.

[Newfie]

An interesting article that touches on many topics we discuss here from shipping to infrastructure spending to Covid to the Paris Accord.

It also dovetails into what the heck is going on in China. Elsewhere I posted that they are shutting a major port because of a single positive Covid test.

Just prior to Covid China suddenly refused acceptance of 3 ships loaded with it on or (IIRC). They had order it and were committed to take it but refused. Then Covid hit the news and China proclaimed Force Majur, re: Covid.

I sometimes get the sense Chin is having some internal problems they don’t want to see discussed, and they are using Covid to hide these problems. Either that or there is something truly frightening about Covid (some really nasty variant?) that scares China.

I just don’t know, but I find their behavior curious.

$this->bbcode_second_pass_quote('', '
')
Companies like Zulu are focused on the biggest, wealthiest, and most congested ports like New York and Long Beach but the problem is truly global in nature. Turloch Mooney, associate director of maritime and trade at IHS Markit, told FT that many poorer ports are “sub-par” and failed to adapt to the new, larger ships, particularly in emerging markets such as Bangladesh and the Philippines, where there was chronic congestion even prior to the pandemic.

[JuanP]

$this->bbcode_second_pass_quote('Newfie', '.').. Elsewhere I posted that they are shutting a major port because of a single positive Covid test.