Posted on 12/19/2021 4:45:03 PM PST by RomanSoldier19
What’s at the root of the supply chain breakdown? That’s a critical question but the answer is almost irrelevant. The supply chain is a complex dynamic system of immense scale. It is of a complexity comparable to the climate as a system.
This means that exact cause and effect cannot be computed because the processing power needed exceeds the combined processing power of every computer in the world.
Most people have some notion of how supply chains work, but few understand how extensive, complex and vulnerable they are. If you go to the store to buy a loaf of bread, you know that the bread did not mystically appear on the shelf.
It was delivered by a local bakery, put on the shelf by a clerk, you carried it home and served it with dinner. That’s a succinct description of a supply chain – from baker to store to home.
Yet that description barely scratches the surface. What about the truck driver who delivered the bread from the bakery to the store? Where did the bakery get the flour, yeast and water needed to make the bread? What about the ovens used to bake the bread? When the bread was baked, it was put in clear or paper wrappers of some sort. Where did those come from?
Even that expanded description of a supply chain is just getting started in terms of a complete chain. The flour used for baking came from wheat. That wheat was grown on a farm and harvested with heavy equipment. The farmer hires labor, uses water and fertilizer and sends his wheat out for processing and packaging before it gets to the bakery.
(Excerpt) Read more at dailyreckoning.com ...
I sure don’t pretend to understand it even at a macro-macro level, but from a common sense standpoint there’s something that just doesn’t make sense to me:
Starting from the assumption that we’re a capitalist economy and that every company wants to thrive - sell products and make a profit doing so - why is EVERY industry seemingly so screwed up? Yes the pandemic shutdowns were highly disruptive, but that started in Q2 2020 and here we are in Q4 2021 with massive problems. Hasn’t everyone had time to get settled and back to work? I’ll use semiconductors as an example because the natural flowtime for a wafer run is measured in weeks, which should mean there was a time when chips weren’t available but then companies caught back up. Except they haven’t and leadtimes are longer now than a year ago. I just can’t understand why, no matter how long the pipe is, after you shut the water off for a while but then turn it on again, water’s got to come out the end!
If you saw this show you already know how complicated our civilization is. More importantly just how damn difficult it will be to restart if it ever collapses.
Connections.
https://www.imdb.com/title/tt0078588/
This problem really predates Biden. COVID and the idiotic government responses to it made an existing problem much worse.
Not enough government-approved trucks to haul the goods through California?
I have seen claims that in addition to CA laws that reduced the number of trucks hauling from CA ports, shippers started refusing to load containers on the return trip (so they did not need to wait for them to be unloaded in china). This then jammed the ports as they literally had nowhere to put the containers that come off of the ships. I also suspect that their inventory management system broke down.
I’ve sent this essay to many people the past few months.
Stupid people and democrats think that the economy can be controlled.
The complexities shown in the production of a simple pencil shows what a lie that is.
One small part breaks down, you don’t make a pencil.
This is what I fear.
You don’t have to understand or control the entire economy. And I’m not advocating controlling the entire economy.
Supply shortages can be easily traced and the root cause determined. It’s not that hard.
You can address things like California’s new regulations on the trucking industry that have impacted the supply of trucks servicing the ports. You can issue temporary waivers, Relax the deadlines, subsidize the upgrades, whatever. But it can be addressed. In this case you’re getting out of the free market’s way, not controlling it.
Likewise, over reliance on foreign countries can be addressed by restoring the import tariffs. Again you don’t have to control the free market. But tariffs are a lever, that our founding father’s understood, that can protect and build American industries. Again, not controlling every or any decision of the free market. But setting the ground rules of the marketplace to avoid overreliance on foreign countries.
The supply chain is a complex dynamic system of immense scale. It is of a complexity comparable to the climate as a system.
This means that exact cause and effect cannot be computed because the processing power needed exceeds the combined processing power of every computer in the world.
Sooooo, that kind of tells me all I need to know about
the validity of “climate change”,!!!
why is EVERY industry seemingly so screwed up?
the surprising thing is that it works at all.
“why is EVERY industry seemingly so screwed up?”
Because it’s all interconnected in ways that can’t be calculated. Go upthread and watch the video of Friedman I posted.
L
I watched every episode of that. PBS wouldn’t show it these days.
L
I saw a cheery local newscast that said despite inflation and the “supply chain crisis,” spending on Christmas shopping was at record levels.
You don’t have to understand or control the entire economy. And I’m not advocating controlling the entire economy.
Supply shortages can be easily traced and the root cause determined. It’s not that hard.
Anytime you change a system there are lots of unintended consequences from the easy fix.
That is why our founding Fathers designed an inefficient govt. They didn’t want people with fast fixes (its not that hard) The market place (Invisible Hand or God if you prefer) will work. It is teaching us a lesson now.
I can remember when it was important to have a 3 year grain reserve. I can remember touring John Deere and they had just shut down their multimillion warehouse because they were moving to just in time manufacturing.
Our current system has no buffering capacity. It works until it doesn’t. We all saw it coming, didn’t you?
THE AMAZING THING IS NOT THAT IT IS SO SCREWED UP, THE AMAZING THING IS THAT IT WORKS AT ALL.
Doesn’t really care about anything, never accepts responsibility. but he was sold to the public on his “empathy.”
“This problem really predates Biden. COVID and the idiotic government responses to it made an existing problem much worse.”
It really does. There are many factors and variable to the supply chain problem.
The one that sticks out to me, is a lack of a sustainable labor supply, not just in the US but globally.
The age of populations around the globe isn’t get talked about enough.
Over the next 2 decades, we’re going to find out if the current wealth, maintenance, and growth of civilization will continue as we’ve come to expect.
“I have my doubts.”
Even a limited list of the different players involved in this supply chain would include at least a dozen different entities -- producers of the raw materials that make up the components of the product, the manufacturers of those components, the final manufacturer, the retailer who sells it, the port terminal operator, and the freight transportation companies (trucking firms, railroads, ocean shipping lines, etc.) that move things in various stages of this process. This supply chain is subject to breakdowns when even small problems occur because none of the various players are coordinated by a single entity with the ability to oversee the whole process.
Unless Amazon or Walmart gets into the business of owning port terminals, railroads, ocean carriers, and manufacturing, this is always going to be a very complex -- and "brittle" -- process.
“This supply chain is subject to breakdowns when even small problems occur because none of the various players are coordinated by a single entity with the ability to oversee the whole process.
Unless Amazon or Walmart gets into the business of owning port terminals, railroads, ocean carriers, and manufacturing, this is always going to be a very complex — and “brittle” — process.”
It’ll have to be an operation with a lot of capital (like Amazon or Walmart) and great organizational skills. It would be a huge endeavor, a game changer, if done correctly.
On a personal note, about supply chains, I’m currently working in the manufacturing sector. We just placed an order for flat bar brass, 2 weeks ago. It’ll be here in March, which is the longest the company has ever waited for material deliveries.
I’m sure businesses, voters, and politicians haven’t helped the foundry capacity of the US, with their unrealistic environmental policies. “It is what it is.”
2022 is going to be a very interesting year and I’ll be studying the trends.
Once upon a time there was a stupid man who decided to rain money on workers in the U.S. and he continued to rain money on those people. Those people decided to quit their jobs and sit on their arse at home with their computers. The stupid man continued to rain money on these people and they started ordering things they had always wanted, eventually putting huge stress on mfrs., then huge stress on shippers, then huge stress on ports and customs. Eventually different links overheated and broke and had to be fixed.
Many of the manufacturing plants downsized with several years required to get them up and operating so that eventually the whole mess wasn’t resolved until the stupid man had gone away and stopped raining money on people. Trucks broke down and needed to be replaced but trucks weren’t being produced because of the lack of spare parts; this also took several years to get fixed.
Ships needed to be dry-docked for periodic maintenance but because of demand they weren’t and eventually some had to go out of service, further stressing the system.
Workers who weren’t enjoying the rainfall of money had worked for long periods with no time off; they too began to quit or go on strike for higher wages/time off.
All in all, the stupid man declared everything a wonderful event for the country and the world and nodded off for his mid-morning nap, the one before his late morning nap which came before his noon nap and so on and so on.
If you go to the store to buy a loaf of bread, you know that the bread did not mystically appear on the shelf.
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Right! It means the workers in the rear of the grocery store are hard at work making, caning, processing, and butchering all those foods emerging from their magical food machines ; shortages just mean the workers are lazy or have been bribed by Brandon not to work.
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