9 ms·

But we won't put those redundancies back in, at least not at scale, because the economic benefits of not having them for each individual economic actor means th

But we won't put those redundancies back in, at least not at scale, because the economic benefits of not having them for each individual economic actor means those who don't chase efficiency as ruthlessly as others will get eliminated. These redundancies somehow have to be mandated for everyone in a particular economic space so no one is disadvantaged for being robust against such supply line interruptions.

deleted 5y ago
[deleted]
mlac 5y ago
Any supplier who could actually sell right now would be able to take advantage of this market and build serious market share. So it’s a company with these reserves that will do well in a similar situation.
- est31 5y ago
  It might do well in these crises, but if it can't survive the times where everything works well, then it doesn't help.
  - mlac 5y ago
    That’s fair, but I think we will see a swing to vertically integrated supply chains to address some of this risk.
    - OneTimePetes 5y ago
      We already have, its just not visible. Those who had stockpiles of chips (Toyota, many other japanese companies affected by the 2011 tsunami) were able to supply and provide products, thus taking market share - or sell chips at a larger price as demand sored. This strategy of holding strategic reserves on premium goods already paid for itself. Similar to that, the scalpers - horders of rare/in demand products fullfill that job in capitalism - at the risk of sitting on a pile of lowprice good.
      - mlac 5y ago
        We are going to see a bullwhip effect [1], it's just where and when it happens. I heard two things this morning about more car shortages (due to chips), Manheim auto auction has had extremely low volume this year, cars going at auction for more than they sold at retail 3 years ago. Some of this I think is sticky (I don't see new car dealers lowering their prices or being willing to negotiate quickly), others though I think will have a drop as inventory picks up. Sell high buy low. I just don't know what to sell at the moment. [1] https://en.wikipedia.org/wiki/Bullwhip_effect https://en.wikipedia.org/wiki/Bullwhip_effect
  - tablespoon 5y ago
    >> Any supplier who could actually sell right now would be able to take advantage of this market and build serious market share. So it’s a company with these reserves that will do well in a similar situation. > It might do well in these crises, but if it can't survive the times where everything works well, then it doesn't help. See also: all the new US N95 respirator manufacturers that popped up during the pandemic. Now they're laying off most of their staff and most will likely go bankrupt, because their customers went back to buying cheaper Chinese masks as soon as they could.
- jtbayly 5y ago
  That’s only assuming they are allowed to raise prices without being sued for price gouging.
  - mlac 5y ago
    They don’t even need to raise prices necessarily to a gouging level - they can just sell product while others can’t. Build brand loyalty, take market share.
    - mrob 5y ago
      Just selling products while others can't isn't enough to pay for the cost of the inefficiency when there's no crisis.
- mrkstu 5y ago
  Hence Apple thriving, and likely continuing to take market share.
  - hiram112 5y ago
    I read a few articles in the past year, since supply issues first began showing up, praising both Apple and Toyota for being less reliant on supply chains out of their complete control. In the last week, I've read several more doomsday articles like this one warning us it's going to get worse before it gets better, and both Apple and Toyota have been mentioned as now having to delay releases or scale back sales targets.
zionic 5y ago
We could use a top-down weighting to modify the incentive topology such that local production of widgets is financially advantageous. We could call this system “tariffs”.
- elihu 5y ago
  A bit of a digression about tariffs: Something that doesn't make sense about political discussions around tariffs (at least in the U.S.) is that it seems like the overwhelming narrative is that "tariffs are bad for business, so we shouldn't have them if we can possibly avoid it". We don't talk that way about other taxes. If you said "we shouldn't have corporate income taxes because they're bad for business" the Republicans would mostly nod along, and the Democrats would say, "Wait, hold up there. Of course they're bad for business, but the point is to raise revenue to pay for other things. Governments need revenue from somewhere." But then when it comes to tariffs for some reason it's treated differently and Democrats are suddenly on board with lowering taxes, with the whole debate being in the context of whether protectionism versus free trade is better for local business (with both major parties mostly leaning towards free trade), and the aspect of revenue isn't even part of the discussion.
  - thaumasiotes 5y ago
    > If you said "we shouldn't have corporate income taxes because they're bad for business" the Republicans would mostly nod along, and the Democrats would say, "Wait, hold up there. Of course they're bad for business, but the point is to raise revenue to pay for other things. Governments need revenue from somewhere." Well, some Democrats would say that, but a lot of other Democrats would say something more like "Of course they're bad for business; that's the point! We hate business and we want to punish it for being business." Note also that we just had a Republican president who focused heavily on imposing tariffs where there were none before, and we now have a Democratic president who approves of those tariffs and wants to keep them in place. So the perspective that both parties are united in disapproval of tariffs would seem to be somewhat off.
    - jonp888 5y ago
FooHentai 5y ago
You can follow this pattern right down to the individual level, too. We train and work as deep specialists at the expense of general capabilities down to and including our ability to provide the basics of life without sourcing them from those same complex supply chains. The economic incentive for this is very strong, and the same weaknesses creep in the longer the situation continues. Not so clear how to foster redundancy coming back in at that level.

deleted 5y ago

[deleted]

mlac 5y ago

Any supplier who could actually sell right now would be able to take advantage of this market and build serious market share. So it’s a company with these reserves that will do well in a similar situation.

est31 5y ago
It might do well in these crises, but if it can't survive the times where everything works well, then it doesn't help.
- mlac 5y ago
  That’s fair, but I think we will see a swing to vertically integrated supply chains to address some of this risk.
  - OneTimePetes 5y ago
    We already have, its just not visible. Those who had stockpiles of chips (Toyota, many other japanese companies affected by the 2011 tsunami) were able to supply and provide products, thus taking market share - or sell chips at a larger price as demand sored. This strategy of holding strategic reserves on premium goods already paid for itself. Similar to that, the scalpers - horders of rare/in demand products fullfill that job in capitalism - at the risk of sitting on a pile of lowprice good.
    - mlac 5y ago
      We are going to see a bullwhip effect [1], it's just where and when it happens. I heard two things this morning about more car shortages (due to chips), Manheim auto auction has had extremely low volume this year, cars going at auction for more than they sold at retail 3 years ago. Some of this I think is sticky (I don't see new car dealers lowering their prices or being willing to negotiate quickly), others though I think will have a drop as inventory picks up. Sell high buy low. I just don't know what to sell at the moment. [1] https://en.wikipedia.org/wiki/Bullwhip_effect https://en.wikipedia.org/wiki/Bullwhip_effect
- tablespoon 5y ago
  >> Any supplier who could actually sell right now would be able to take advantage of this market and build serious market share. So it’s a company with these reserves that will do well in a similar situation. > It might do well in these crises, but if it can't survive the times where everything works well, then it doesn't help. See also: all the new US N95 respirator manufacturers that popped up during the pandemic. Now they're laying off most of their staff and most will likely go bankrupt, because their customers went back to buying cheaper Chinese masks as soon as they could.
jtbayly 5y ago
That’s only assuming they are allowed to raise prices without being sued for price gouging.
- mlac 5y ago
  They don’t even need to raise prices necessarily to a gouging level - they can just sell product while others can’t. Build brand loyalty, take market share.
  - mrob 5y ago
    Just selling products while others can't isn't enough to pay for the cost of the inefficiency when there's no crisis.
mrkstu 5y ago
Hence Apple thriving, and likely continuing to take market share.
- hiram112 5y ago
  I read a few articles in the past year, since supply issues first began showing up, praising both Apple and Toyota for being less reliant on supply chains out of their complete control. In the last week, I've read several more doomsday articles like this one warning us it's going to get worse before it gets better, and both Apple and Toyota have been mentioned as now having to delay releases or scale back sales targets.

zionic 5y ago

We could use a top-down weighting to modify the incentive topology such that local production of widgets is financially advantageous. We could call this system “tariffs”.

elihu 5y ago
A bit of a digression about tariffs: Something that doesn't make sense about political discussions around tariffs (at least in the U.S.) is that it seems like the overwhelming narrative is that "tariffs are bad for business, so we shouldn't have them if we can possibly avoid it". We don't talk that way about other taxes. If you said "we shouldn't have corporate income taxes because they're bad for business" the Republicans would mostly nod along, and the Democrats would say, "Wait, hold up there. Of course they're bad for business, but the point is to raise revenue to pay for other things. Governments need revenue from somewhere." But then when it comes to tariffs for some reason it's treated differently and Democrats are suddenly on board with lowering taxes, with the whole debate being in the context of whether protectionism versus free trade is better for local business (with both major parties mostly leaning towards free trade), and the aspect of revenue isn't even part of the discussion.
- thaumasiotes 5y ago
  > If you said "we shouldn't have corporate income taxes because they're bad for business" the Republicans would mostly nod along, and the Democrats would say, "Wait, hold up there. Of course they're bad for business, but the point is to raise revenue to pay for other things. Governments need revenue from somewhere." Well, some Democrats would say that, but a lot of other Democrats would say something more like "Of course they're bad for business; that's the point! We hate business and we want to punish it for being business." Note also that we just had a Republican president who focused heavily on imposing tariffs where there were none before, and we now have a Democratic president who approves of those tariffs and wants to keep them in place. So the perspective that both parties are united in disapproval of tariffs would seem to be somewhat off.
  - jonp888 5y ago

FooHentai 5y ago

You can follow this pattern right down to the individual level, too. We train and work as deep specialists at the expense of general capabilities down to and including our ability to provide the basics of life without sourcing them from those same complex supply chains. The economic incentive for this is very strong, and the same weaknesses creep in the longer the situation continues. Not so clear how to foster redundancy coming back in at that level.