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> our operation has become brittle and subject to massive failures under the slightest pressure I somehow notice a lot of this lately, in many different areas.

by smsm42 5y ago

> our operation has become brittle and subject to massive failures under the slightest pressure I somehow notice a lot of this lately, in many different areas. I wonder if there isn't a common cause behind those. Is it just covid or something bigger?

hawk_ 5y ago
this is the price we pay for rewarding "efficiencies" up and down the entire chain, leaving no slack whatsoever. with large companies or operations these efficiencies can be over really minor things as well because it means bonus for someone. the root cause of all of this is "short-termism". everyone is only worried about the next quarter, not the next 5 let alone 20-40 years.
- listenallyall 5y ago
  The US commercial air transport industry is an absolute marvel. Millions of people moved thousands of miles every single day, mostly at extremely affordable fares. And tons of cargo moved as well. All with an excellent safety record, especially in the past decade. If "the price we pay" is a day or two of one airline (not any of the others) grounding most of its fleet, most likely due to a controversial internal HR policy, it's an exceptionally low price.
  - TeMPOraL 5y ago
    You make it sound as if it was impossible to have such a marvelous industry without this deep degree of over-optimization. I disagree. The way I see it, with a bit more buffering here and there, it would be mostly the same - perhaps with less bullshit flights that could've been just as well taken by trains (which would be in a better condition, having more business flowing through them), and less middle-men everywhere sucking up the savings from all that optimization. This is the thing with markets: whatever optimization you make, you won't reap the fruits of it for long. Someone - either competitors or adjacent third parties - will show up to suck out your margin, leaving you mostly as you were, but locking that optimization in as a permanent fixture in the industry. This means that when companies over-optimize, shoot past the optimum "value to profits" ratio and aim for higher margins still, they make the industry permanently (well, until next collapse) worse for everyone.
  - Barrin92 5y ago
    >The US commercial air transport industry is an absolute marvel. Millions of people moved thousands of miles every single day, mostly at extremely affordable fares. And tons of cargo moved as well As opposed to...? tons of cargo and millions of people are being moved around everywhere, welcome to the modern world. The US commercial flight industry sucks in the grand scheme of things mostly due to a lack of competition. Flying in the US is expensive compared to Europe/Asia.
    - ghaff 5y ago
      I don't claim to know all the price/cost dynamics, but it's mostly the regional low-cost carriers (which people seem to generally hate except for their cheapness) that are cheap in Europe and Asia. Otherwise airfares are pretty similar to the US.
cehrlich 5y ago
Optimisation culture. Cut x cost by y%? Promotion! Everything collapses a few years later because there’s no buffers for anything? Who cares, those managers are already at their next job so it’s someone else’s fault!
- saurik 5y ago
  That's also "I want it cheap and I don't want to consider complexity" culture; if an airline were consistently more expensive but claimed "hey you know that once a decade issue that happened to Southwest last year? it will never happen to us", maybe some businesses with particularly critical flights would go for it, but not only would most people go for the cheaper flight given the option... I bet almost no one would be able to tell you what the benefit of the more expensive airline was as they probably just don't care enough to learn or research (which is different from then deciding the difference didn't matter).
doctorwho42 5y ago
It is large due to corporations taking on lean-business models from MBAs over the last decade+. When a business runs lean, it becomes more fragile to disruptions. Unfortunately due to our economic system, there is a semi-regular boon-bust cycle, so if it wasn't COVID, it would have been something else that kicks the stool out from under the legs of these corporations. In the past this wasn't as big as an issue because the risk was spread out amongst a multitude of small to medium size corporations. But again, over the last few decades corporations have become mega-conglomerates through buyouts and mergers/etc... Too big to fail. All the eggs in fewer baskets. Again, in an attempt to keep growing, because in our current economic system and the culture promoted in it (partially by MBA's) is the idea that if your company isn't growing it's dying. And even if it's growing, if it's not growing by a large enough amount it is failing... So you could have a 1,000 person corporations stabley making 100 million in revenue. Providing good benefits and salaries to all. But if its not growing, then it is viewed as failing ... It's truly an absurd mindset and culture.
- killerdhmo 5y ago
  Your hate of MBAs is unfounded and unproven. Their COO has worked there since 1993, and doesn’t have an MBA: https://www.swamedia.com/pages/michael-van-de-ven https://www.swamedia.com/pages/michael-van-de-ven
  - andreskytt 5y ago
    MBA here. Does not sound like hate but statement of fact. In my experience the US MBA and general management management teaching is very dollar-based in stark contrast to, say European management education. This will lead to extreme efficiencies and the M&A boom of the past few decades is probably linked to it as well. And it does not have to be the CEO: most practical daily decisions cutting all buffers for maximum efficiency are made by mid to upper management.
  - valray 5y ago
    Your statement shows lack of understanding of how the modern corporation works. The COO may have been there 30 years, and may lack an MBA, but increasingly it is this type of CxO that has been reyling upon MBAs and other consultants (operations research) to restructure the organization into an optimized-but-fragile state. It is the rare old-hand that can standup to younguns talking tech and math, subjects he does not feel comfortable with.
kortilla 5y ago
This is only “a failure” if the loss from this is worse than all of the money they have saved over the years by running so lean. This type of event is the obvious possible downside that is well known when you structure a company this way. It’s not that events like this aren’t expected, it’s that prepping for them costs more than the loss from not being able to absorb them.
- dgb23 5y ago
  I‘m sure you‘re just describing what is, but... The human element doesn’t matter at all? Their workers are fed up. This tunnel visioning on financial metrics is so superficial and narrow that it makes me angry. A company is a community of interacting, real people, not a video game.
  - WalterBright 5y ago
    Going out of business doesn't help the workers, either.
    - dgb23 5y ago
      My point is: "If you only look at financial statements, you lose the big picture" and not "don't look at financial statements".
  - supertrope 5y ago
    Southwest is one of the better carriers in terms of customer satisfaction and not racing to the lowest fare.
- craftinator 5y ago
  > This is only “a failure” if the loss from this is worse than all of the money they have saved over the years by running so lean. Don't forget all of the future losses by losing the trust of both the customers and the employees. > it’s that prepping for them costs more than the loss from not being able to absorb them This assumes that they can absorb these losses.
bobthepanda 5y ago
Southwest is literally the poster child of low cost carriers. They started the whole business model, which consists of a few things: * they operate literally one type of aircraft, and therefore only have to train their crew once, keep the specific set of parts, etc. * they optimize the hell out of making sure their planes are in use carrying paying passengers for the maximum amount of time * they fly a vast network of point to point using secondary airports, as opposed to coordinating at massive hubs These are all things that would make recovering from a massive widespread disruption very hard, and Southwest has been doing it better and longer than anybody else.
- smsm42 5y ago
  How operating one type of plane makes recovering from disruption harder? I'd expect it to make it easier - you can replace any crew with any other crew, and any plane with any other plane. Same with secondary airports - I am not sure how it makes recovery harder. Distributed systems are usually more robust against disruption that centralized ones - if you can't fly in an out of the hub, then all your flights in that hub's vicinity are grounded, but if you just lost one secondary airport, there might be another close by. So I'm not sure I am convinced those particular qualities are detrimental to robustness, at least without a convincing argument.
  - bobthepanda 5y ago
    well, as an example, when the 737MAX was grounded, many airlines had already started taking delivery of them and were operating them. Southwest was the largest recipient at that time. Southwest had plenty of older 737s as well, but the new MAX planes both fly farther and have more seats, so while the grounding was in effect Southwest was essentially paying to keep the things on the ground while scrambling to reconfigure their flight network, and it affected them the most.
    - hef19898 5y ago
      Single AC fleets mean an airline has somewhat of a single point of failure. If the issue at hand is caused by that point of failure, sure recovery will be harder. In most other cases it makes it actually easier, at least on paper. No need to get crews to certain planes, just a crew to a plane, as every crew is certified on any plane.
TrispusAttucks 5y ago
The global economy is just one enormous JIT system now. Great for efficiency not so good for stability.
cronix 5y ago
According to this substack[1], it was a pilot walkout/"sickout" due to vaccine mandates. It's actually happening in more companies/industries than widely reported. I imagine it's also picked up steam since last weeks revelation from leaked internal Pfizer emails[2] that they used cells from aborted fetuses while testing the RDNA vaccine (testing - it's not in the vaccine), but have publicly stated otherwise. It was also pretty clear that they did not want the public to know from the text. And a lot of "religious exemptions" are being turned down. This would be a bit like taking a staunch vegan and forcing them to eat something (via threatening career) that was tested on animals while they said otherwise. > The pilot emailed following the first Southwest post today (and provided his SWA ID to prove his identity). He asked that I paraphrase the email. > Essentially, the union cannot organize or even acknowledge the sickout, because doing so would make it an illegal job action. Years ago, Southwest and its pilots had a rough negotiation, and the union would not even let the pilots internally discuss the possibility of working-to-rule (which would have slowed Southwest to a crawl). > But at the moment the pilots don’t even have to talk to each other about what they’re doing. The anger internally - not just among pilots but other Southwest workers - is enormous. The tough prior negotiations notwithstanding, Southwest has a history of decent labor relations, and workers believe the company should stand up for them against the mandate. Telling pilots in particular to comply or face termination has backfired. [1] https://alexberenson.substack.com/p/urgent-a-southwest-airlines-pilot/comments https://alexberenson.substack.com/p/urgent-a-southwest-airli... [2] https://www.youtube.com/watch?v=FUXGB5FzhPc https://www.youtube.com/watch?v=FUXGB5FzhPc
- native_samples 5y ago
  It's telling that this is downvoted, even though it presents actual evidence from an actual SWA employee vs the random speculation found elsewhere in the thread. The cause isn't leanness or MBAs, its pilots protesting against vaccine mandates, by the testimony of an actual pilot who works there.
  - bserge 5y ago
    [flagged]
  - 5y ago
londons_explore 5y ago
The root cause is because "anti price gouging" laws are being enforced. Previously, if there was a shortage of say plane brake discs, the wholesaler would jack the price up 10x for the last 3 sets. That would lead to one of the 4 customers who wanted to buy them to say "nah, it's too expensive, we don't need it that badly". The person who wouldn't get a set was probably the guy restocking the spare parts shelf, while the people who really really needed those parts right now so a plane can takeoff got them. In todays world, it's illegal to jack the price, one customer buys all the cheap stock (one to use, 2 as spares cos they heard about a shortage), and now 2 planes can't take off. The same happens for thousands of other products all across the world. The end result is the people who really need goods can't get them, while others sit on piles of stock 'lucky we bought some just before they ran out!'. Endgame: The economy grinds to a halt over tiny shortages everywhere. The proper solution is to allow and encourage price gouging again, and have a PR campaign to explain to the public how changing this law really is in their interests, even if it appears on the surface that paying $100 for a flashlight in an emergency can't be good for anyone.
- deleted 5y ago
  [deleted]
- brandmeyer 5y ago
  Careful: you're letting ideology get in the way of the facts. Price gouging laws are exclusively a local and state matter, and only apply at the retail level. Although there have been proposals for price-gouging laws at the federal level, none have been enacted. State laws don't generally apply to B2B interactions.
  - londons_explore 5y ago
    I'm not sure it matters... Any goods wholesaler I know of goes straight from "in stock, the price is X" to "out of stock, even if you offer a million $ you can't have any". Nobody auto-increases prices as stock runs low. Perhaps it isn't illegal to do so, but nobody does it, probably because businesses believe it's illegal to do so.
new_guy 5y ago
> Is it just covid or something bigger? Vaccine mandates. All the staff have walked off the job rather than be jabbed.
mschuster91 5y ago
Over the last decades, capitalism was not regulated very much and, as a result, companies cut costs - and one of the easiest ways to do so is to cut resiliency measures like having a standby plane and crew at every major airport to cover for delays, technical problems or staff calling in sick. Nowadays, no one runs with any sort of buffer if that isn't explicitly demanded by government or other regulations... and when the shit hits the proverbial fan, it hits hard as a result.
Xelbair 5y ago
if you remove all checks and balances, all forms of redundancy and run the system at 99% capacity.. even a simple unforeseen event can disrupt everything and grind it to halt. Just imagine that most businesses are equivalent to running your whole stack on a single, self hosted at home, RPI. Including the git repository, and no backups.
dqpb 5y ago
Think about how difficult systems engineering is. Then realize that everything is systems engineering. But, very few people making decisions are systems engineers. Ad-hoc heuristic decision making + political in-fighting can get you off the ground, but it can't keep you reliably airborne.

by smsm42 5y ago

hawk_ 5y ago

this is the price we pay for rewarding "efficiencies" up and down the entire chain, leaving no slack whatsoever. with large companies or operations these efficiencies can be over really minor things as well because it means bonus for someone. the root cause of all of this is "short-termism". everyone is only worried about the next quarter, not the next 5 let alone 20-40 years.

listenallyall 5y ago
The US commercial air transport industry is an absolute marvel. Millions of people moved thousands of miles every single day, mostly at extremely affordable fares. And tons of cargo moved as well. All with an excellent safety record, especially in the past decade. If "the price we pay" is a day or two of one airline (not any of the others) grounding most of its fleet, most likely due to a controversial internal HR policy, it's an exceptionally low price.
- TeMPOraL 5y ago
  You make it sound as if it was impossible to have such a marvelous industry without this deep degree of over-optimization. I disagree. The way I see it, with a bit more buffering here and there, it would be mostly the same - perhaps with less bullshit flights that could've been just as well taken by trains (which would be in a better condition, having more business flowing through them), and less middle-men everywhere sucking up the savings from all that optimization. This is the thing with markets: whatever optimization you make, you won't reap the fruits of it for long. Someone - either competitors or adjacent third parties - will show up to suck out your margin, leaving you mostly as you were, but locking that optimization in as a permanent fixture in the industry. This means that when companies over-optimize, shoot past the optimum "value to profits" ratio and aim for higher margins still, they make the industry permanently (well, until next collapse) worse for everyone.
- Barrin92 5y ago
  >The US commercial air transport industry is an absolute marvel. Millions of people moved thousands of miles every single day, mostly at extremely affordable fares. And tons of cargo moved as well As opposed to...? tons of cargo and millions of people are being moved around everywhere, welcome to the modern world. The US commercial flight industry sucks in the grand scheme of things mostly due to a lack of competition. Flying in the US is expensive compared to Europe/Asia.
  - ghaff 5y ago
    I don't claim to know all the price/cost dynamics, but it's mostly the regional low-cost carriers (which people seem to generally hate except for their cheapness) that are cheap in Europe and Asia. Otherwise airfares are pretty similar to the US.

cehrlich 5y ago

Optimisation culture. Cut x cost by y%? Promotion! Everything collapses a few years later because there’s no buffers for anything? Who cares, those managers are already at their next job so it’s someone else’s fault!

saurik 5y ago
That's also "I want it cheap and I don't want to consider complexity" culture; if an airline were consistently more expensive but claimed "hey you know that once a decade issue that happened to Southwest last year? it will never happen to us", maybe some businesses with particularly critical flights would go for it, but not only would most people go for the cheaper flight given the option... I bet almost no one would be able to tell you what the benefit of the more expensive airline was as they probably just don't care enough to learn or research (which is different from then deciding the difference didn't matter).

doctorwho42 5y ago

It is large due to corporations taking on lean-business models from MBAs over the last decade+. When a business runs lean, it becomes more fragile to disruptions. Unfortunately due to our economic system, there is a semi-regular boon-bust cycle, so if it wasn't COVID, it would have been something else that kicks the stool out from under the legs of these corporations. In the past this wasn't as big as an issue because the risk was spread out amongst a multitude of small to medium size corporations. But again, over the last few decades corporations have become mega-conglomerates through buyouts and mergers/etc... Too big to fail. All the eggs in fewer baskets. Again, in an attempt to keep growing, because in our current economic system and the culture promoted in it (partially by MBA's) is the idea that if your company isn't growing it's dying. And even if it's growing, if it's not growing by a large enough amount it is failing... So you could have a 1,000 person corporations stabley making 100 million in revenue. Providing good benefits and salaries to all. But if its not growing, then it is viewed as failing ... It's truly an absurd mindset and culture.

killerdhmo 5y ago
Your hate of MBAs is unfounded and unproven. Their COO has worked there since 1993, and doesn’t have an MBA: https://www.swamedia.com/pages/michael-van-de-ven https://www.swamedia.com/pages/michael-van-de-ven
- andreskytt 5y ago
  MBA here. Does not sound like hate but statement of fact. In my experience the US MBA and general management management teaching is very dollar-based in stark contrast to, say European management education. This will lead to extreme efficiencies and the M&A boom of the past few decades is probably linked to it as well. And it does not have to be the CEO: most practical daily decisions cutting all buffers for maximum efficiency are made by mid to upper management.
- valray 5y ago
  Your statement shows lack of understanding of how the modern corporation works. The COO may have been there 30 years, and may lack an MBA, but increasingly it is this type of CxO that has been reyling upon MBAs and other consultants (operations research) to restructure the organization into an optimized-but-fragile state. It is the rare old-hand that can standup to younguns talking tech and math, subjects he does not feel comfortable with.

kortilla 5y ago

This is only “a failure” if the loss from this is worse than all of the money they have saved over the years by running so lean. This type of event is the obvious possible downside that is well known when you structure a company this way. It’s not that events like this aren’t expected, it’s that prepping for them costs more than the loss from not being able to absorb them.

dgb23 5y ago
I‘m sure you‘re just describing what is, but... The human element doesn’t matter at all? Their workers are fed up. This tunnel visioning on financial metrics is so superficial and narrow that it makes me angry. A company is a community of interacting, real people, not a video game.
- WalterBright 5y ago
  Going out of business doesn't help the workers, either.
  - dgb23 5y ago
    My point is: "If you only look at financial statements, you lose the big picture" and not "don't look at financial statements".
- supertrope 5y ago
  Southwest is one of the better carriers in terms of customer satisfaction and not racing to the lowest fare.
craftinator 5y ago
> This is only “a failure” if the loss from this is worse than all of the money they have saved over the years by running so lean. Don't forget all of the future losses by losing the trust of both the customers and the employees. > it’s that prepping for them costs more than the loss from not being able to absorb them This assumes that they can absorb these losses.

bobthepanda 5y ago

Southwest is literally the poster child of low cost carriers. They started the whole business model, which consists of a few things: * they operate literally one type of aircraft, and therefore only have to train their crew once, keep the specific set of parts, etc. * they optimize the hell out of making sure their planes are in use carrying paying passengers for the maximum amount of time * they fly a vast network of point to point using secondary airports, as opposed to coordinating at massive hubs These are all things that would make recovering from a massive widespread disruption very hard, and Southwest has been doing it better and longer than anybody else.

smsm42 5y ago
How operating one type of plane makes recovering from disruption harder? I'd expect it to make it easier - you can replace any crew with any other crew, and any plane with any other plane. Same with secondary airports - I am not sure how it makes recovery harder. Distributed systems are usually more robust against disruption that centralized ones - if you can't fly in an out of the hub, then all your flights in that hub's vicinity are grounded, but if you just lost one secondary airport, there might be another close by. So I'm not sure I am convinced those particular qualities are detrimental to robustness, at least without a convincing argument.
- bobthepanda 5y ago
  well, as an example, when the 737MAX was grounded, many airlines had already started taking delivery of them and were operating them. Southwest was the largest recipient at that time. Southwest had plenty of older 737s as well, but the new MAX planes both fly farther and have more seats, so while the grounding was in effect Southwest was essentially paying to keep the things on the ground while scrambling to reconfigure their flight network, and it affected them the most.
  - hef19898 5y ago
    Single AC fleets mean an airline has somewhat of a single point of failure. If the issue at hand is caused by that point of failure, sure recovery will be harder. In most other cases it makes it actually easier, at least on paper. No need to get crews to certain planes, just a crew to a plane, as every crew is certified on any plane.

TrispusAttucks 5y ago

The global economy is just one enormous JIT system now. Great for efficiency not so good for stability.

cronix 5y ago

According to this substack[1], it was a pilot walkout/"sickout" due to vaccine mandates. It's actually happening in more companies/industries than widely reported. I imagine it's also picked up steam since last weeks revelation from leaked internal Pfizer emails[2] that they used cells from aborted fetuses while testing the RDNA vaccine (testing - it's not in the vaccine), but have publicly stated otherwise. It was also pretty clear that they did not want the public to know from the text. And a lot of "religious exemptions" are being turned down. This would be a bit like taking a staunch vegan and forcing them to eat something (via threatening career) that was tested on animals while they said otherwise. > The pilot emailed following the first Southwest post today (and provided his SWA ID to prove his identity). He asked that I paraphrase the email. > Essentially, the union cannot organize or even acknowledge the sickout, because doing so would make it an illegal job action. Years ago, Southwest and its pilots had a rough negotiation, and the union would not even let the pilots internally discuss the possibility of working-to-rule (which would have slowed Southwest to a crawl). > But at the moment the pilots don’t even have to talk to each other about what they’re doing. The anger internally - not just among pilots but other Southwest workers - is enormous. The tough prior negotiations notwithstanding, Southwest has a history of decent labor relations, and workers believe the company should stand up for them against the mandate. Telling pilots in particular to comply or face termination has backfired. [1] https://alexberenson.substack.com/p/urgent-a-southwest-airlines-pilot/comments https://alexberenson.substack.com/p/urgent-a-southwest-airli... [2] https://www.youtube.com/watch?v=FUXGB5FzhPc https://www.youtube.com/watch?v=FUXGB5FzhPc

native_samples 5y ago
It's telling that this is downvoted, even though it presents actual evidence from an actual SWA employee vs the random speculation found elsewhere in the thread. The cause isn't leanness or MBAs, its pilots protesting against vaccine mandates, by the testimony of an actual pilot who works there.
- bserge 5y ago
  [flagged]
- 5y ago

londons_explore 5y ago

The root cause is because "anti price gouging" laws are being enforced. Previously, if there was a shortage of say plane brake discs, the wholesaler would jack the price up 10x for the last 3 sets. That would lead to one of the 4 customers who wanted to buy them to say "nah, it's too expensive, we don't need it that badly". The person who wouldn't get a set was probably the guy restocking the spare parts shelf, while the people who really really needed those parts right now so a plane can takeoff got them. In todays world, it's illegal to jack the price, one customer buys all the cheap stock (one to use, 2 as spares cos they heard about a shortage), and now 2 planes can't take off. The same happens for thousands of other products all across the world. The end result is the people who really need goods can't get them, while others sit on piles of stock 'lucky we bought some just before they ran out!'. Endgame: The economy grinds to a halt over tiny shortages everywhere. The proper solution is to allow and encourage price gouging again, and have a PR campaign to explain to the public how changing this law really is in their interests, even if it appears on the surface that paying $100 for a flashlight in an emergency can't be good for anyone.

deleted 5y ago
[deleted]
brandmeyer 5y ago
Careful: you're letting ideology get in the way of the facts. Price gouging laws are exclusively a local and state matter, and only apply at the retail level. Although there have been proposals for price-gouging laws at the federal level, none have been enacted. State laws don't generally apply to B2B interactions.
- londons_explore 5y ago
  I'm not sure it matters... Any goods wholesaler I know of goes straight from "in stock, the price is X" to "out of stock, even if you offer a million $ you can't have any". Nobody auto-increases prices as stock runs low. Perhaps it isn't illegal to do so, but nobody does it, probably because businesses believe it's illegal to do so.

new_guy 5y ago

> Is it just covid or something bigger? Vaccine mandates. All the staff have walked off the job rather than be jabbed.

mschuster91 5y ago

Over the last decades, capitalism was not regulated very much and, as a result, companies cut costs - and one of the easiest ways to do so is to cut resiliency measures like having a standby plane and crew at every major airport to cover for delays, technical problems or staff calling in sick. Nowadays, no one runs with any sort of buffer if that isn't explicitly demanded by government or other regulations... and when the shit hits the proverbial fan, it hits hard as a result.

Xelbair 5y ago

if you remove all checks and balances, all forms of redundancy and run the system at 99% capacity.. even a simple unforeseen event can disrupt everything and grind it to halt. Just imagine that most businesses are equivalent to running your whole stack on a single, self hosted at home, RPI. Including the git repository, and no backups.

dqpb 5y ago

Think about how difficult systems engineering is. Then realize that everything is systems engineering. But, very few people making decisions are systems engineers. Ad-hoc heuristic decision making + political in-fighting can get you off the ground, but it can't keep you reliably airborne.