All of this talk about supply chain issues are totally missing the point in my opinion. So many articles (and tweet chains I guess) have been written about supply chain issues, yet every one of them seems to ignore the elephant in the room which is demand for goods vs services. Over the course of the pandemic there was a staggering re-balancing of consumer spending [0] from services to goods, to which supply chains have not caught up.
If the spending doesn't re-balance again as restrictions are lifted this is not a temporary supply chain issue caused by just-in-time methodology, it's just the new normal.
The reason just-in-time is to blame, is that JIT assumes you have a reasonably stable flow (yes, I worked in manufacturing where we studied JIT a lot). Yes, it was a shift from services to goods that provided the current shock, but it was JIT that meant the system could not adapt to shocks. If you have no buffers (or very small ones), then you cannot quickly adapt.
If you put a vase on top of your car and drive away, it's irrelevant which bump in the road causes the vase to fall off; it was bound to fall off eventually. The global supply chain was optimized for efficiency, to the point of fragility, and whether it was a pandemic or a war or something else, a shock was coming eventually. With climate change, we can expect more frequent weather-induced changes in the future. A supply chain which cannot handle frequent, large changes is too fragile, and that's what's wrong with JIT.
I'm definitely outside my wheelhouse here, so maybe help me understand the current fixation on and criticism of JIT. Are you advocating for more buffers in supply chains generally? If the current scenario is one where goods purchases were simply deferred from early in the pandemic to later (with no real increase in total demand for goods) I can see that solving the issue to some extent.
But my point is that total demand for goods has actually increased and not by a little, by a lot. Buffers in the supply chain can't help with that, can they? An increase in total throughput is needed to solve that, and that's going to take a while. Is there something I'm missing here?
The problem is JIT is all about steady state operation, and hinders the ability to scale up.
If you have a substantial buffer, when demand picks up you notice that you are drawing from your buffer at an increased rate and you order things early so that you can scale with that increased demand. It's okay if your suppliers need some time to hire additional labor or buy a new machine, even at this increased rate of consumption you still have some time before your stocks run out. There is no need for you to pay your suppliers a premium to drop their existing orders from other customers to support your demand.
If you don't have that extra buffer, then when demand increases there is no avoiding shortages - not only do you need to scale up to increase production and meet this new demand, but now you also have an ever growing backlog of orders that you also need to fulfill. These companies scramble to rush in material and equipment asap, which drives up prices and drains the stocks of other companies, and pushes the problem further up the supply chain. Firms that aren't actually seeing an increase in demand nevertheless must buy more to guarantee their buffers will not run out, further increasing shortfalls in production. What could have been a localized hiccup cascades into a global economic problem.
However it's important to note that the pandemic was not simply a shifting in demand patterns. Early on production in many cases stopped or was extremely reduced as employees quarantined and businesses cancelled orders expecting various drops in consumer demand. Again here, JIT is a problem as it led firms to cancel orders much earlier than they should have, and it makes restarting lines much slower. For example auto makers cancelled their chip orders right away at the start of the pandemic expecting people to save money and not buy cars, but it turned out demand for cars increased, and a lack of chips grinds auto manufacturing to a halt. If the auto manufacturers had just accepted that their inventory of chips might sit on a shelf a little longer, the counter intuitive uptick in demand would have been a blessing instead of a curse.
Having inventory on the shelf during a crisis is a far greater risk to the survival of a company than failing to produce cars quickly enough after unexpected high demand. Cancelling chip orders was the safe play, not the risky one.
Having inventory on the shelf is only an issue if it cannot be sold, which would only be possible if car sales never resume, an incredibly improbable outcome to the crisis. Everyone knew people would be back to buying cars soon enough. On the other hand cancelling orders carries great risk as no one is going to wait around for you to get more stock, if you miss your opportunity to make a sale it's gone, hence the mad scramble by auto manufacturers to reverse course once it became clear they had miscalculated.
'Everyone' did not people would be back to buying cars soon enough. Stock prices of car manufacturers lost 50% of their value. Factories were closed. They could have been closed for months or even years. That is a recipe for a liquidity crisis for a company, of which there is no coming back if you can not borrow money. Moreover, even if it was possible to produce cars, people were worried about a deep economic crisis caused by long lockdowns. Car sales are the first thing to go in such a crisis.
> But my point is that total demand for goods has actually increased and not by a little, by a lot. Buffers in the supply chain can't help with that, can they? An increase in total throughput is needed to solve that, and that's going to take a while. Is there something I'm missing here?
(You didn't ask me and I'm not an expert but) Not if you just use them as a pure buffer (and there's no re-re-adjustment before they're used up), no. But they'd give you some time to think 'Hm, stocks being depleted faster than usual, we need to reorder sooner, and more.'
I disagree deeply. If you have no buffers that means you can change what you produce without waste. JIT allows you to produce a customized car as it comes of the production line. it can adapt much more quickly then any system with a lot of stock.
The problem is not "the system reacts to quickly to our controls". It's "humanity when faced with uncertainty about the pandemic choose to optimize the controls over a to short time frame leading to regret". Economic ideologies also have impact on the choice of the time frame. Blaming that the system reacts to well to our controlls just because it reacting sluggisher might have had a trajectory under the same controls that would have caused less regret this time is my opinion very mistaken.
No I am not missing that I just think that JIT done right (no true scottsman) doesn't require stable flow. At best it needs predictable flows and in the current economic system where a lot of information is lost at the company border => the only way to ensure predictability in our current system is have steadyness if things pass company borders.
If we are making statements about how our economic system ought to be it we should consider either flexible pricing that actually reflects information at the company border (with all the Pareto front guarantees that can bring us) or cross company optimization of the economy (providing better guarantees).
JIT's epitome is vertical integration so i don't think so. JIT made this all much more resilient because everyone has smaller, lower orders allowing everyone to a greater percentage of the total stock. What happened was people got alittle nervous and jumped off the JIT band wagon and tried to ensure they had large inventories to weather the storm. The big guys with the biggest orders got what they wanted at the expense of us plebs.
JIT may have originated at Toyota, but Toyota's version of JIT is not what is nowadays commonly referred to as JIT. Toyota's production sytem is a lean manufacturing method where stages of production are rate matched (ie operation B is using parts at the same rate operation A is producing them), but there still are buffers of inventory between stages. The goal is to make the whole system communicate in such a way that when one part needs to change rate, everything else changes rate at the same time.
In conventional JIT, the goal is specifically to minimize inventory by minimizing the time between when something is produced and when it is consumed. This is good from an accounting perspective as money that would be tied up in inventory can be put to other uses such as investments. JIT is about eliminating the variability for which you would need buffers, really the opposite of what Toyota does.
Do you have any sources your can share or more info about this?
I Googled and the first result was "Under delta, supply chain strains, Toyota slashes production."[0] Many similar results[1][2][3].
Six months ago they were getting temporary reprieve because they monitored supply and snapped some up[4], but now, six months later, they seem to be having to slash production like everyone else.
Toyota historically has worried more about keeping a close relationship with their suppliers, which means keeping them afloat during hard times. American automakers historically are less interested in that. My understanding was that Toyota's cuts in orders for parts were less drastic than their competitors.
The same rebalancing happened in Europe, and Europe doesn't have close to the issues the US has regarding supply chain. Europe's major ports are automated and operate 24/7, port to hinterland relies much more on rail than trucking. Overall, the US supply chain was already very fragile and outdated.
Actually, I think barge transport is a much larger contributor than rail in the modal split of hinterland operations in Europe. Both Rotterdam and Antwerp have huge barge modal splits and large hinterland terminals, often trimodal.
And the US has pretty damn good freight rail. You just don't notice it because all those containers get transferred to trucks or unloaded at distributions facilities outside the beltways in which most of HN tends to live and does the last ~20-100mi on truck.
More of HN needs the experience of waiting for a freight train to finish crossing the road. Count containers with a stopwatch and you can get an idea of how many trucks worth of containers a freight train can move vs the adjacent highway. It's still much more time and fuel efficient even slowed down for the crossing.
That’s lovely. But it’s not going to be the 400 TEU that Rhine barges do.
Trains in Europe are about 90 TEU, with them being capped by terminal handling capacity and legal maximums. Rail length at terminals in LA seem to be similar to Rotterdam and Antwerp: 600-900m. Let’s assume US freight trains can double their capacity by double stacking their trains. 180 TEU per train is still well under an average barge size.
I couldn’t find modal split numbers for LA, but I’m willing to bet their trucking share is above the ~55% Rotterdam achieves (some 10-15% is rail, remaining share is inland barges)
Trains are ofcourse still way more efficient than trucks.
That's a different level of the discussion tree. I was talking about rail appreciation in reply to someone talking about rail appreciation. HN's structure lets people talk about different aspects of the same main topic. It's neat.
Hmm, I thought US rail freight system is massive, excellent and envied by the whole world. When in the US, I saw these double decker container trains with the bogies at the ends (so the lower container could be below the axle).
That sounds nice. By contrast, the US makes moving goods between two US ports illegal.
Okay, it doesn't technically do that, the Jones Act just requires you to use a US-owned US-built US-crewed US-operated ship. These ships, in general, don't exist. Oh, sure, there are a few that go back and forth to Puerto Rico, and there are a few wastewater ships running up and down the East River in New York, but no one would dream of using ships like these for general cargo. They are not up to modern container-shipping standards. Puerto Rico pays a premium for a few of these freighters and tankers but generally does more to import goods from the Caribbean and Central America than from the US; when there are hurricanes, the President has to issue a waiver so they can move disaster recovery supplies in from the mainland.
Fish shipped from Alaska are unloaded on the east coast in Canada, where they put on trucks, and the trucks are put on a carrier train which makes a round trip back and forth for the length of the cargo terminal to qualify as being "shipped by Canadian rail" for US legal purposes, and then the trucks drive into the US with the fish. A related law afflicts cruise ships, which always stop somewhere in Canada, Alaska, or the Caribbean, on their way between US ports.
One of the premises of the Jones Act was that it will preserve American shipbuilding for national security™ purposes. This has more or less utterly failed. However, Joe Biden's campaign promises specfically called out fortifying the Jones Act so that it would be even stronger, so, don't hold your breath on change.
>Fish shipped from Alaska are unloaded on the east coast in Canada, where they put on trucks, and the trucks are put on a carrier train which makes a round trip back and forth for the length of the cargo terminal to qualify as being "shipped by Canadian rail" for US legal purposes, and then the trucks drive into the US with the fish. A related law afflicts cruise ships, which always stop somewhere in Canada, Alaska, or the Caribbean, on their way between US ports.
Can you find a citation for this, I would love to add the example to an upcoming book.
Did it? And doesn't it? How can you tell? Both Europe and the US are large and complicated.
Last I heard Europe was in the middle of an energy crisis which could easily turn out to be linked to supply chain disruptions. It has been long enough for the slow-rolling-wave nature of economic disasters to start surfacing, but it is too early to raise a head up and talk about cause and effect without some citations.
> If the spending doesn't re-balance again as restrictions are lifted this is not a temporary supply chain issue caused by just-in-time methodology, it's just the new normal.
Even if spending stays shifted supply will be able to catch up eventually. Once people believe there's a predictable level of demand they will be able to plan output for it - or else someone else will capture that new market share.
It has nothing to do with spending. This whole problem stems from shutting countries down. Now it's all stacked up ready to go back into the economy, but we can't move fast enough. In time it will iron itself out, but high oil prices don't help, empty shipping containers stacked up don't help, the ports only working 8 hours don't help. It's a bunch of little stuff that added up to make a major problem.
Frankly, people buy a lot of stuff they don't need. But I wonder how the dependence on disposable items plays in. I could never understand stressing one bit about the most disposable items like paper towels. Completely non-essential items.
re. paper towels: strictly non-essential items, yes, but it takes some lifestyle reconfiguration to make the alternatives work. My household is (I speculate asymptotically) approaching zero paper towel use, but we have ready access to laundry, the capital and bandwidth to have built up a comfortable supply of rags and towels, and our only occasionally messy coinhabitant is the cat (and you can bet that if he vomits, I'm using a paper towel to clean it up).
We can make the conscious choice to reduce our dependence on disposable products, but at some point (for everyone, for every "easy" solution x) it's not worth reducing any more.
The whole point of paper towels, or disposable nappies, is removing the labour cost of cleaning them.
My ex-wife was a stay at home Mom for her religious reasons, and was determined to be the "best" Mom, only healthy food, no TV or devices, cloth nappies etc.
Once we hit kid #3, the time needed to launder cloth nappies wasn't viable with two other kids on the go. I encouraged her to give disposables a go, and she was hooked, but very guilty about it.
But yeah, disposables saved us (well mainly her) many hours of scraping shit, stirring a giant bucket of nappies with Napisan, washing them, hanging them out in the sun to let the UV sort the stains etc.
So while paper towels are technically non-essential, I'm reminded of the old sarcastic comment that "Linux is free, if your time has no value".
Seems to me like people just aren't sharing the wisdom enough about how to do these things both responsibly and efficiently.
We used just use cloth diapers, put them in a diaper-only load in our washing machine, dry them in the dryer, and it worked fine.
Scraping? We just used a sprayer attached to the toilet, held in a little clip thing that keeps the spray contained. Stuff went in the toilet, mostly-clean diaper goes in the pail.
We also did "elmination communication" part-time. Just literally set the kid over the potty around the right amount of time after eating, and each time we take diaper off, and if it looks like they're about to go. It wasn't lots of extra work, and around 6-months, we had maybe half the times just going in the potty without needing to deal with a dirty diaper at all.
The entire problem is that our society is set up for the disposable approach and you rarely even know anyone in person who can guide you through managing it better, so we all figure it out for ourselves using the internet. But like, the one other family we told about what we were doing it just followed our lead and had total success too. And kids end up fully potty trained before 2yo.
It takes more than just good intentions, it takes sharing the wisdom more. Companies that profit off of a disposable economy work to get attention instead of the better wisdom we could be sharing with one another.
Super off-topic but national differences in washing lines vs dryer use are fascinating. In an early attempt to replicate the Japanese line-drying time forecast[0], I looked around for English-language articles about clothes drying, and the predominant advice was to always use a clothes dryer, because line-drying takes too long, encourages mould and mould is deadly and to be feared. Which seemed weird as I’d never owned a dryer.
Props on sticking to your guns for so long with cloth nappies, I know some couples who couldn’t make it work and felt they’d let themselves down.
Thanks for sharing your perspective. I could have better emphasized though that I know there would have been no way for us to have managed as well as we did without having learned some wisdom that came from other people.
Yes, circumstances vary. But I stick to my basic point that wisdom is not shared anywhere near enough, and a lot of the blame for that goes on the businesses who profit from people remaining unwise. This factor is at the heart of a huge portion of the world's problems.
Yea, I found this odd that kids in US used diapers well above 2 years. I found a lot of kids potty trained in India around one. My kid's day care prohibited diapers for kids above 18 months!
If you just get a bum shower as used in many East-Asian countries, you can get away with very little paper towel use and don’t have to clean towels as well.
And these bum showers can be bought on Amazon quite cheaply and shouldn’t be too difficult to install on any toilet.
But then we're back to people needing to purchase new items to accommodate sudden changes in lifestyle where it just didn't make any sense since the last major advance in technology / the last pandemic. Sure, we know we need to avoid disposable items right now, but as disposable items go paper products are pretty dang recyclable or compostable. Whereas at other times and places conserving water is far more critical.
I’ve got japanese one and drying function just doesn’t cut it. In the end i use more toilet paper but experience is better. Could use cloth ones but toddler would destroy those.
> I’ve got japanese one and drying function just doesn’t cut it. In the end i use more toilet paper but experience is better. Could use cloth ones but toddler would destroy those.
Might depend how dry you want your bottom to be. I live in Thailand, so we got bum guns everywhere of similar style as the linked Amazon product (no drying function). I usually just use 2-4 sheets to "dry" my behind. If it's still a little bit wet, I don't mind, as my behind will get dry after a few minutes with pants on anyways (perhaps because I live in a hot country). At least I am 100% sure my behind is clean.
After talking extensively about the benefits of bum guns with my friends when we were in Asia, the hot vs cold country is a big differentiator. We loved them when we were out there, feels so much cleaner. Its also quite refreshing.
Back in the UK though you during the winter the water will be extremely cold and you really don't want to be damp down there.
The one I have I run a hot and cold line into it for warm water; then I just sit for a minute or two to air dry. I don't live in a particularly hot or dry region, either.
I wonder if you could get one with warm water. And why not use a towel to dry off afterwards? Many people keep one in the bathroom for showering anyway.
The problem is mainly with 99% of towels being ultra symmetric (up/down, left/right, front/reverse). When your towel is asymmetric, you can split it into zones for various things :)
I have owned both the cheap cold water amazon ones and TOTOs. Highly recommend either. If you don’t mind cold water the cheap amazon ones work really well.
Oh, for sure (that was what I was angling at with my comment about roommates). I suspect we would absolutely rebalance our strategy if faced with that sort of circumvention of our ... er... usual waste disposal mechanisms.
On the other hand, I've known grown, solo adults who went through a few full rolls of luxe-brand paper towels a week (who needs a plate when you can stack 10 sheets of paper towels?).
> But yeah, disposables saved us (well mainly her) many hours of scraping shit, stirring a giant bucket of nappies with Napisan, washing them, hanging them out in the sun to let the UV sort the stains etc.
We are using (modern) cloth nappies (after having used disposables early on). Our washing machine handles it all with standard detergent. No stirring or Napisan necessary. The drying via hanging up is exactly the same as for any other laundry.
I do see your general point, of course. We mostly went with the cloth nappies in the first place, because of fitting issues.
> I'm reminded of the old sarcastic comment that "Linux is free, if your time has no value".
Wow, a thread about supply chains and you manage to take a cheap jab at Linux. In response, try running Windows on a computer you only use once a month. You can watch it update every time instead of getting work done. Linux you can update while working.
Those old sarcastic comments remind me of Cygnus Solution's more up-beat slogan (they ported and supported free software like GCC, and were bought by RedHat):
"We Make Free Software Affordable"
Instead of just whining about cheap shots, Cygnus Solutions deftly channeled the doubts and problems raised by the first two slogans (which they didn't originate, but were going around at the time), into a successful service under the last slogan (which they did originate, in response).
To be fair any newish computer OS is going to act the same way in that condition, linux included. I know if I put any of my linux computers in that mode of use they would. My PS4 I use maybe every 2-3 months. Large update every time usually on the order of an hour to do so. I am pretty sure I have not 'paid' for a copy of any OS in 15 years (and that was because I built a computer). Yet I spend a good amount of time 'fixing' things. I pay in spades in time, no matter what little amount I may have forked out when I bought the computer.
Once a month? No. I hardly even reboot my Windows machine once a month...
Only the major releases of Windows 10 need a stop the world reboot. Those happen once every six months. And it's usually only a few minutes.
That's for a home machine. I've seen some enterprise machines take forever. I have no idea how they managed to fuck that up, but it's on the IT organisation of those enterprises, not on Windows.
I said once a month, because if you use your computer once a month there is no point having it powered on 24/7, not economical. What happens is you power it on when you need to use it, Windows starts downloading updates in the background, the next time you power on, installation starts on boot.
Those updates don't get installed at boot time. Modern Windows installs most updates in the background. The only ones that require a reboot are the big ones, every 6 months.
You lost me there. Which version of Windows will install the monthly cumulative update without a reboot?
Server 2016 (and older versions of W10) are horrendous for updates. You can have servers stuck on "configuring updates" during shutdown or startup for over 30 mins. Server 2019 is much better though.
Thank you for recognizing this point. It costs me $6 to do a (small) load of laundry at my complex and the time cost of going to a laundromat makes it economically unviable.
I've really cut down on paper towel usage and I used to use a lot due to having several small animals who are entirely too prone to accidents. I found it best to keep a box of a few dozen small cloths that I got as a bundle, and a small hamper nearby that I throw the dirty ones into, which also happens to be near the washing machine.
I end up doing quite a lot of washing of said rags, but it's far more economical than the paper towels ever were and quite a bit more convenient in general to boot.
I think my family’s spending since the pandemic actually geared more towards stuff we use a lot.
Perhaps the original comment is right about purchases moving from services to goods. We ended up buying things we may have otherwise used through services. A paddle board we’d otherwise rent, roof top tent (otherwise used to pay for camp sites that were closed during the pandemic), cooking equipment to satisfy cravings for food from restaurants that were closed or shut down, etc.
There is also a phenomenon similar to (inverse) traffic jams where a bottleneck wanders up the supply chain. Just in time delivery has some disadvantages and we basically use the road (or rail, sea) as warehouse nowadays. But ships, trains and trucks might not get filled when production halted because of lacking parts. Still the trucks and ships are bound to their current job and are sitting empty somewhere. It will slowly entangle as transport priority gets reordered.
I think the difficulty in making that case is that expenditures are in $ not functional units. So what you may be seeing is more higher prices (a symptom of supply chain breakdown) not more purchases, while services largely stayed similar in price and similar in volume (to slightly down due to extra money spent on pricy goods).
Seems like the answer to all of these problems is that everything changed. Nothing in particular can be blamed for the fact that virtually everyone changed most of their behaviors significantly and for an extended time.
I listened to a podcast recently that spoke specifically about how the container unloading is a major issue. Certain areas have zoning restrictions about stacking empty zoning containers only 2 high (Santa Monica??). So the container hauling trailers have largely got stuck holding empties so they can't clear the docks which means we aren't clearing the ports quick enough. I know there have been recent strides to to bypass some of these rules but it is like a slinky and will take a while to catch up. My guess is that "normal" is still 9 months away.
The other big factor in this speaks to your point. We are importing far more than exporting. Containers have gone up 10x in price over the last year and we need to get all these empties back to Asia, etc.
That or Santa Monica (?) Will become full of sky scrapers of shipping containers as no capacity is available to haul away the empties and there's no destination for them
The main take-way is, the design of the system is not fluid enough to scale up or down based on the demand. Rather, it has too many bottlenecks for it to choke and eventually die.
> yet every one of them seems to ignore the elephant in the room which is demand for goods vs services
Considering almost every article I read about the causes cites the shift from services to goods (to the point of feeling like it's filler at this point), I wonder how we are reading such different sources. I'm thinking about sources like the NYT.
Another missing piece is that COVID is still thriving in a lot of places, and typically in the places that are the "supply" in supply chain.
So while the demand is waking up there are still a lot of places with large numbers of people sick and/or dying because they don't have wealthy governments who can afford mass vaccination.
If the spending doesn't re-balance again as restrictions are lifted this is not a temporary supply chain issue caused by just-in-time methodology, it's just the new normal.
[0] https://apps.bea.gov/iTable/iTable.cfm?ReqID=19&step=2#reqid...
EDIT: That link is broken, should have been this https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=3&isuri...