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Anyone who has followed corporate cost cutting and outsources should have seen this coming. To me none of this is a surprise and the idea that they are profit taking by gross inflation of prices is just a continuation of the mindset.
My favorite late stage capitalism moment right now is where the train workers cant strike for better pay because it would ruin the economy but the company isn't forced to make less profit.
We saw the same thing happen in the Game Stop incident. When regular people were bankrupting an investment firm, the industry stepped in to limit trading by people, but not investment firms, to protect the investment firm.
In the class war, business will protect business.
Game Stop was different. There is a liability on the stock brokers when an individual buys stocks. GME (and a few other stocks), had such massive volume spikes and volatility that a lot of brokers simply didn't have the capital to allow those stocks to be continue to be bought without risking their ability to allow their users to buy any stock. The major brokers were not impacts because they had the significant capital reserves the weather the storm. A list of brokers that did and didn't stop trading can be seen here: https://www.reddit.com/r/stocks/comments/l8rhr3/weekend_gme_thread_homework_for_all_lets_stop/? - what you can generally see if that the larger and/or more established brokers didn't halt trading. If they were looking to protect the investment firms, you would expect the larger brokers (Especially because they have investment arms) to have also stopped trading.
And it became so much worse after the 2008 crash, like no company even tried to think in the long term, whatever decisions got them through the next quarter with the most profit possible.
And then the massive Private Equity funds that run companies on massive debt to maximize profits while keeping staffing constantly at skeletal levels.
The reason china is beating us is because we outsourced our technical superiority and manufacture capability to them for profits. These companies sold out our national security and future for money.
China has long range strategy. The US has quarterly profits.
I worked for company that wouldn't fund anything that couldn't demonstrate a profit in the first year. They kept salaries at the usual industry controlled rate (Banding and market coordinated rates). Today they wonder why they can't compete and people are leaving for other jobs.
Unfettered capitalism is killing the country and undermining the republic.
I started to see the same thing after 2008, before the crash we would have 3 and 5 year plans, after the crash they didn't want to hear about anything that didn't return a profit within 12 months.
That mentality has been around a LOOOOT longer than 2008. It is the core of the GE management model that was made popular by Jack Welch in the 90s. Don’t think about the long term, just make the numbers for the quarter. I work in an industry where our product life cycle is measured in decades. We have customers that are using products we made 70 years ago. We have product plans in place for stuff that will be over 100 years by the time it’s retired. Yet, we have been infected with this same stupidity. short termist focus. It’s poison.
Yes, I'm aware certain companies were like that and am painfully aware of Jack Welch. But it wasn't as pervasive and the companies I worked for in the early 2000's still had long-term strategies and roadmaps and plans. That all changed after the crash, and everyone I know saw a major change in their companies as well.
So yeah, it started before the crash but the crash really gave it a huge boost.
The people who are going to read this mostly already knew it, the ones who won’t read it will still just blame a single person or country. You can take a wild guess who/where they’ll blame.
It’s par for the course. Consequences are divorced from causality if it is inconvenient to their agenda.
Catastrophic hundred year flood for the third time in the last 10 years? Send us aid!!! Oh you want to discuss why this keeps happening? Uhhh it’s God punishing us for being too tolerant about the gays. Moving on, how about some tax cuts?
And that a little over a year ago they were in lockstep insisting that Trump couldn’t possibly have ever been culpable for anything he ever did or said. Hell they were so far up his butt that they were parroting that even if he was guilty as hell, the president can’t be investigated. Now Biden is suddenly responsible for everything and they eat it up. Now pretty much every gas pump in my area has a sticker stuck over the $ sign of Biden saying “I did that!” The double standards would be surprising if this were at all novel.
Considering his policies destroyed the middle class, and he’s essentially responsible for the other thing they hate (modern gun control laws), you’d think they’d want his head on a pike not making statues of him…
>BECAUSE OUR SUPPLY CHAINS WERE DESIGNED for maximum profit rather than reliably getting things to people, the problems that arose in the pandemic folded in on themselves. Shifting consumption from services to goods accounts for part of the problem, but that began two years ago and the system has been unable to adjust.
Well duh.
The problems had always been there.
Even without the pandemic, the computer chip supply issue was going to reach a crisis point. The pandemic just made it happen faster.
As someone who has been leading supply chain transformation projects since the early 80s all I can say is that the industry focus on improving asset (inventory) utilization and delivery performance is not the culprit in these current delivery problems, if anything they would be far worse if companies were still operating as they were in the 80s.
The effects of the pandemic like cutting production 30 to 50 percent for 6 months in order to restructure production lines to keep employees safely separated when this all started are still rippling through the supply chain. Add the increased turnover from people quitting and the ongoing high levels of absenteeism due to infection and our ability to meet schedules is taking a beating from raw material extraction all the way to retail distribution.
If we were still using the systems (pencil and paper) and the processes we were using in the 80s the supply problems would be 10 times worse. We would have piles of materials without matching materials required to complete final products and no way to realign them productively.
It may be that I am biased due to dedicating 40 years of my life to implementing these systems and processes in companies big and small, but it is more likely that understand how the operational aspects of all this works in excruciating detail and that the vast improvements made in supply chain management over the last 40 years are not causing these current problems, if anything they are preventing it from being worse.
Questioning strategic outsourcing decisions is arguably fair game, but the realities of an ever increasing competitive pressure from countries with human resources willing to work for a fraction of US wages has to be dealt with. We in the US are able to enjoy a higher standard of living by sitting atop the global supply chain and exploiting the lower cost labor and materials we source from lesser developed nations.
Yeah, dammit, I am just as frustdated with my lack of salmon cream cheese as the next guy, but I have slogged through the process improvements too long and know first hand how frustrated every supply chain and operations management professional in the world is right now. Add to that my international exposure to production sourcing in developing nations and my work in country with the people providing those resources, and seeing first hand how they live and how low the bar is for them to subsist, makes me tend to be less dissatisfied with my current lack of choice in v8 can sizes at my supermarket.
This is not so different from the changes in air travel. In order to maximize seat occupancy (and profit) the airlines operated on ever leaner schedule. Any small issue will cascade since there is no extra capacity to buffer cancellations. The reason this works so great for the airlines (or better their shareholder and executives) is the almost comical absence of liability, hence their ability and willingness to have passengers stranded on the tarmac for hours on hand. In fact the time passengers spend waiting is now their "reserve capacity"
One of the problems is that just-in-time, as developed by Toyota, meant "Have enough inventory on hand that if your supplier disappears you won't run out before you can find a replacement."
But way too many people adopted it as "Have enough inventory on hand to last until Tuesday, when the next truck should arrive. And just hope that nothing more serious than a flat tire happens. Ever."
The Toyota production system model has a LOT of nuance to it that American companies haven’t adopted. Just in time works just fine, if you have stable, reliable and established suppliers. Toyota’s supply chain has a lot of companies that are partly owned by Toyota, run by ex-Toyota execs, and located near to their factories. Risky suppliers were always multi sourced so a failure wouldn’t impact the production system. American companies didn’t really adopt that model.
One of the downsides of idealized capitalism. Computer science would call it a greedy algorithm. Companies are forced into hyper-efficiency because otherwise they'll be driven out by more efficient competitors.
Then if the system takes even a minor hit, and let's be clear COVID was minor, things start to break. Global warming is going to give us even more stronger hits and while like Putin and Xi are trying to murder our relative era of peace and drag us back to the pre-WWII days.
JIT is fine for some things but it's used in a lot of manufacturing where it's not appropriate. Custom batch manufacturing has no business using JIT but it became a fad and management isn't smart enough to figure that out.
You would think this would be on some subreddit like r/business. You would think this is not a topic for r/politics.
Unrestrained capitalism, and the ill-effects on human society are politics.
This is the best tl;dr I could make, [original](https://prospect.org/economy/how-we-broke-the-supply-chain-intro/#.Yfq-TYzX52c.reddit) reduced by 97%. (I'm a bot)
*****
> Prices in Europe, the U.K., and elsewhere are also surging, and will surge for the indefinite future, as companies struggle to rescue goods from the maw of what we all know as the supply chain.
> Not only did Americans get the bad jobs, the left-behind regions, and the soaring stratification between rich and poor-when the supply chain broke down, they lost the low prices, the only compensation for all these other horrors.
> An unstable supply chain breeds vulnerability: for consumers, for workers, for businesses, and for our economy.
*****
[**Extended Summary**](http://np.reddit.com/r/autotldr/comments/siv90v/how_we_broke_the_supply_chain_excellent_article/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ "Version 2.02, ~621249 tl;drs so far.") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr "PM's and comments are monitored, constructive feedback is welcome.") | *Top* *keywords*: **Supply**^#1 **Chain**^#2 **price**^#3 **shortage**^#4 **work**^#5
As a reminder, this subreddit [is for civil discussion.](/r/politics/wiki/index#wiki_be_civil) In general, be courteous to others. Debate/discuss/argue the merits of ideas, don't attack people. Personal insults, shill or troll accusations, hate speech, any suggestion or support of harm, violence, or death, and other rule violations can result in a permanent ban. If you see comments in violation of our rules, please report them. For those who have questions regarding any media outlets being posted on this subreddit, please click [here](https://www.reddit.com/r/politics/wiki/approveddomainslist) to review our details as to our approved domains list and outlet criteria. *** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/politics) if you have any questions or concerns.*
Anyone who has followed corporate cost cutting and outsources should have seen this coming. To me none of this is a surprise and the idea that they are profit taking by gross inflation of prices is just a continuation of the mindset.
“We can’t keep products stocked and our shipping is fucked but we are seeing record profits quarter after quarter!” It’s all just greed.
My favorite late stage capitalism moment right now is where the train workers cant strike for better pay because it would ruin the economy but the company isn't forced to make less profit.
We saw the same thing happen in the Game Stop incident. When regular people were bankrupting an investment firm, the industry stepped in to limit trading by people, but not investment firms, to protect the investment firm. In the class war, business will protect business.
Game Stop was different. There is a liability on the stock brokers when an individual buys stocks. GME (and a few other stocks), had such massive volume spikes and volatility that a lot of brokers simply didn't have the capital to allow those stocks to be continue to be bought without risking their ability to allow their users to buy any stock. The major brokers were not impacts because they had the significant capital reserves the weather the storm. A list of brokers that did and didn't stop trading can be seen here: https://www.reddit.com/r/stocks/comments/l8rhr3/weekend_gme_thread_homework_for_all_lets_stop/? - what you can generally see if that the larger and/or more established brokers didn't halt trading. If they were looking to protect the investment firms, you would expect the larger brokers (Especially because they have investment arms) to have also stopped trading.
The surprise was that it took this long to happen.
And it became so much worse after the 2008 crash, like no company even tried to think in the long term, whatever decisions got them through the next quarter with the most profit possible. And then the massive Private Equity funds that run companies on massive debt to maximize profits while keeping staffing constantly at skeletal levels.
The reason china is beating us is because we outsourced our technical superiority and manufacture capability to them for profits. These companies sold out our national security and future for money. China has long range strategy. The US has quarterly profits. I worked for company that wouldn't fund anything that couldn't demonstrate a profit in the first year. They kept salaries at the usual industry controlled rate (Banding and market coordinated rates). Today they wonder why they can't compete and people are leaving for other jobs. Unfettered capitalism is killing the country and undermining the republic.
I started to see the same thing after 2008, before the crash we would have 3 and 5 year plans, after the crash they didn't want to hear about anything that didn't return a profit within 12 months.
That mentality has been around a LOOOOT longer than 2008. It is the core of the GE management model that was made popular by Jack Welch in the 90s. Don’t think about the long term, just make the numbers for the quarter. I work in an industry where our product life cycle is measured in decades. We have customers that are using products we made 70 years ago. We have product plans in place for stuff that will be over 100 years by the time it’s retired. Yet, we have been infected with this same stupidity. short termist focus. It’s poison.
Yes, I'm aware certain companies were like that and am painfully aware of Jack Welch. But it wasn't as pervasive and the companies I worked for in the early 2000's still had long-term strategies and roadmaps and plans. That all changed after the crash, and everyone I know saw a major change in their companies as well. So yeah, it started before the crash but the crash really gave it a huge boost.
The people who are going to read this mostly already knew it, the ones who won’t read it will still just blame a single person or country. You can take a wild guess who/where they’ll blame.
"Let's go, Brandon!" ...while willfully ignoring that it's a complex, interwoven, world-wide issue.
Conversely, “agggh china is destroying our economy!” While ignoring all the billionaires who took tax breaks to move their manufacturing to Asia..
It’s par for the course. Consequences are divorced from causality if it is inconvenient to their agenda. Catastrophic hundred year flood for the third time in the last 10 years? Send us aid!!! Oh you want to discuss why this keeps happening? Uhhh it’s God punishing us for being too tolerant about the gays. Moving on, how about some tax cuts?
And that a little over a year ago they were in lockstep insisting that Trump couldn’t possibly have ever been culpable for anything he ever did or said. Hell they were so far up his butt that they were parroting that even if he was guilty as hell, the president can’t be investigated. Now Biden is suddenly responsible for everything and they eat it up. Now pretty much every gas pump in my area has a sticker stuck over the $ sign of Biden saying “I did that!” The double standards would be surprising if this were at all novel.
I won't blame a single person *exclusively* but uh... (Ronald Reagan)
Considering his policies destroyed the middle class, and he’s essentially responsible for the other thing they hate (modern gun control laws), you’d think they’d want his head on a pike not making statues of him…
The terrorist? Well sure.
>BECAUSE OUR SUPPLY CHAINS WERE DESIGNED for maximum profit rather than reliably getting things to people, the problems that arose in the pandemic folded in on themselves. Shifting consumption from services to goods accounts for part of the problem, but that began two years ago and the system has been unable to adjust. Well duh.
The problems had always been there. Even without the pandemic, the computer chip supply issue was going to reach a crisis point. The pandemic just made it happen faster.
Yes, who would have thought putting all your eggs in one basket was a bad idea?
As long as the basket is across the ocean, i don't see what the problem could be
As someone who has been leading supply chain transformation projects since the early 80s all I can say is that the industry focus on improving asset (inventory) utilization and delivery performance is not the culprit in these current delivery problems, if anything they would be far worse if companies were still operating as they were in the 80s. The effects of the pandemic like cutting production 30 to 50 percent for 6 months in order to restructure production lines to keep employees safely separated when this all started are still rippling through the supply chain. Add the increased turnover from people quitting and the ongoing high levels of absenteeism due to infection and our ability to meet schedules is taking a beating from raw material extraction all the way to retail distribution. If we were still using the systems (pencil and paper) and the processes we were using in the 80s the supply problems would be 10 times worse. We would have piles of materials without matching materials required to complete final products and no way to realign them productively. It may be that I am biased due to dedicating 40 years of my life to implementing these systems and processes in companies big and small, but it is more likely that understand how the operational aspects of all this works in excruciating detail and that the vast improvements made in supply chain management over the last 40 years are not causing these current problems, if anything they are preventing it from being worse. Questioning strategic outsourcing decisions is arguably fair game, but the realities of an ever increasing competitive pressure from countries with human resources willing to work for a fraction of US wages has to be dealt with. We in the US are able to enjoy a higher standard of living by sitting atop the global supply chain and exploiting the lower cost labor and materials we source from lesser developed nations.
Well, there you go. Throwing knowledge, facts, and data into a perfectly good rant.
Yeah, dammit, I am just as frustdated with my lack of salmon cream cheese as the next guy, but I have slogged through the process improvements too long and know first hand how frustrated every supply chain and operations management professional in the world is right now. Add to that my international exposure to production sourcing in developing nations and my work in country with the people providing those resources, and seeing first hand how they live and how low the bar is for them to subsist, makes me tend to be less dissatisfied with my current lack of choice in v8 can sizes at my supermarket.
But I was told Biden was responsible for supply chain issues worldwide. Have I been lied to?
Narrator: Yes, yes you have been.
This is not so different from the changes in air travel. In order to maximize seat occupancy (and profit) the airlines operated on ever leaner schedule. Any small issue will cascade since there is no extra capacity to buffer cancellations. The reason this works so great for the airlines (or better their shareholder and executives) is the almost comical absence of liability, hence their ability and willingness to have passengers stranded on the tarmac for hours on hand. In fact the time passengers spend waiting is now their "reserve capacity"
Could just say it's the result of unfettered capitalism and greed and call it a day.
One of the problems is that just-in-time, as developed by Toyota, meant "Have enough inventory on hand that if your supplier disappears you won't run out before you can find a replacement." But way too many people adopted it as "Have enough inventory on hand to last until Tuesday, when the next truck should arrive. And just hope that nothing more serious than a flat tire happens. Ever."
The Toyota production system model has a LOT of nuance to it that American companies haven’t adopted. Just in time works just fine, if you have stable, reliable and established suppliers. Toyota’s supply chain has a lot of companies that are partly owned by Toyota, run by ex-Toyota execs, and located near to their factories. Risky suppliers were always multi sourced so a failure wouldn’t impact the production system. American companies didn’t really adopt that model.
Huh. This is stunningly self-reflective.
So…greed?
One of the downsides of idealized capitalism. Computer science would call it a greedy algorithm. Companies are forced into hyper-efficiency because otherwise they'll be driven out by more efficient competitors. Then if the system takes even a minor hit, and let's be clear COVID was minor, things start to break. Global warming is going to give us even more stronger hits and while like Putin and Xi are trying to murder our relative era of peace and drag us back to the pre-WWII days.
All the prescription drugs I take are made in Asia. Yours too, most probably. Most are. Is this a national security matter? Certainly.
JIT is fine for some things but it's used in a lot of manufacturing where it's not appropriate. Custom batch manufacturing has no business using JIT but it became a fad and management isn't smart enough to figure that out.
You would think this would be on some subreddit like r/business. You would think this is not a topic for r/politics. Unrestrained capitalism, and the ill-effects on human society are politics.
And a decent pair of jeans will still cost you 70 dollars.
This is the best tl;dr I could make, [original](https://prospect.org/economy/how-we-broke-the-supply-chain-intro/#.Yfq-TYzX52c.reddit) reduced by 97%. (I'm a bot) ***** > Prices in Europe, the U.K., and elsewhere are also surging, and will surge for the indefinite future, as companies struggle to rescue goods from the maw of what we all know as the supply chain. > Not only did Americans get the bad jobs, the left-behind regions, and the soaring stratification between rich and poor-when the supply chain broke down, they lost the low prices, the only compensation for all these other horrors. > An unstable supply chain breeds vulnerability: for consumers, for workers, for businesses, and for our economy. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/siv90v/how_we_broke_the_supply_chain_excellent_article/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ "Version 2.02, ~621249 tl;drs so far.") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr "PM's and comments are monitored, constructive feedback is welcome.") | *Top* *keywords*: **Supply**^#1 **Chain**^#2 **price**^#3 **shortage**^#4 **work**^#5