6 ms·

No, no, no! Stockpiling is not a solution to a bottleneck! In the grand scheme of things, having a couple weeks of extra inventory on hand will not help you w

No, no, no! Stockpiling is not a solution to a bottleneck! In the grand scheme of things, having a couple weeks of extra inventory on hand will not help you weather a 100 year storm. But it will increase waste - inventory that you have to throw away when there are defects or when they become obsolete. Imagine trying to predict the run on lumber, and the solution was to have kept a bunch of lumber sitting in yards rotting waiting for the off-chance that there was a sudden unexpected demand. The proposal that we should have been shipping over more of everything, building giant strategic stockpiles across the country of everything, and then tossing out 10-15% of everything from storage loss is bonkers. Just In Time manufacturing reduces waste and improves quality across the board. And stockpiling only hides your bottlenecks!

modeless 5y ago
> In the grand scheme of things, having a couple weeks of extra inventory on hand will not help you weather a 100 year storm. That's not really what he's saying. It's not about a single company, it's about the whole economy. When every company is running JIT, a small temporary supply disruption anywhere can bubble and propagate through the whole chain, becoming a huge disaster. It's like a traffic jam; when a highway is running right at capacity it only takes one person hitting the brakes to turn the whole thing into a parking lot. Except it's worse than a linear highway because the economy has many backlinks where companies early in the chain rely on companies later in the chain, causing feedback loops. Whereas if there was slack in the system then the relatively small initial shock wouldn't propagate.
- legitster 5y ago
  Supply chain issues were sooo much worse before JIT. Imagine one person taps the brakes, but every car weighs 100 tons. When companies kept huge inventories, most of it was not useful to solve the supply chain issues that came up and often made it harder to respond to demand shocks.
  - notacoward 5y ago
    [citation needed]
blhack 5y ago
He's not suggesting stockpiling, he's suggested increasing the amount of RAM in the system (to us a computer analogy).
- chrisan 5y ago
  What exactly is the "RAM" if not inventory?
  - zen_of_prog 5y ago
    I think they do mean inventory, just not sitting around in a forgotten storage room. To try other computer analogies, it might be increasing the queue size or using a capacitor.
  - dkokelley 5y ago
    Production and logistics capacity. If you run a factory at 100% efficiency, anytime >100% throughput is necessary you get backlogged. If you have ~15% headroom as a GOAL, you can weather a shock without any downstream impact. In the case of the Port of LA shipping containers, optimizing lot storage so that you always have exactly enough space (100% efficiency) breaks down as soon as that space requirement jumps to 110%.
    - blitzar 5y ago
      > breaks down as soon as that space requirement jumps to 110%. It breaks down at 100.0001%. At 110% the butterflys wings are flapping and creating storms on the other side of the planet.
- reportingsjr 5y ago
  And a counterpoint to this, bufferbloat, which caused lots of unnecessary latency issues in networking for years.
Grakel 5y ago
Quite the opposite, the lumber industry has been selling greener and wetter wood year after year. If they would stockpile the quality would increase, and they could build a cushion to fluctuating demand.
- rsj_hn 5y ago
  I've noticed this with musical instruments, and it sucks. This has been a chronic problem with Gibson guitars, but also even small scale luthiers are being hurt. https://www.guitarworld.com/features/adam-jones-i-told-gibson-you-know-the-wood-was-different-back-then-and-they-went-were-going-to-match-it-the-guitar-is-heavy-man https://www.guitarworld.com/features/adam-jones-i-told-gibso...
- legitster 5y ago
  Haha! Point taken.
- reportingsjr 5y ago
  Do you have a source to back up either of these claims? 1. greener/wetter wood 2. quality increase from drier wood There are standards for the moisture content in dimensional lumber. It's unlikely lumber yards are going to be selling wood that's outside of the standard ranges. Additionally, some of the soft woods are a PITA to deal with if they get too dry, as they are more prone to cracking when driving fasteners without drilling holes. Much of the quality issues stem from having cut down most old growth forest and converting these past forests to farmland or suburban yards. The primary source for fir, spruce, and pine these days that are used for dimensional lumber come from managed farms. The trees are only grown as long as needed to harvest certain sizes of lumber. This leaves you with grain running in less than ideal directions and a lot of sapwood instead of heartwood. To be honest though, most dimensional lumber people complain about is fine for the sort of framing it's used for. It's a lot more efficient to use wood the way we currently do, rather than clear cutting our now very rare old growth forests and producing high quality, wasteful lumber. Increasing lumber stockpiles isn't going to solve any of these issues.
  - Grakel 5y ago
arendtio 5y ago
Even if you are right, what would be your solution? I mean, the problem is not that we lack transparency, but that we have run out of options to fight the bottlenecks. Having some stockpiles as buffers would be one options to fight the problem.
- urthor 5y ago
  Is there even a better solution than to let the current supply chain issues play out? The status quo with supply chains and manufacturing is there for a reason, silicon in particular reflects its boom bust cycle as well as the absurd costs of CapEx. I think people are reaching when they table the hypothesis that current supply chain issues are due to mistakes or mismanagement of some middle manager, in some corporation somewhere. Maybe, just maybe, the cost of having a bunch of spare infrastructure for a once in a lifetime rearrangement of the supply chain due to Covid isn't worthwhile?
  - arendtio 5y ago
    Sure, waiting is an option. But I wonder which other options are available in the long term. We talked about stockpiling. But how about rearranging the supply chains? Distribute the production of products? Shortening the supply chains? Estabilishing multiple cheap transport routes? etc.
- Gigachad 5y ago
  The solution is to wait. It's better to wait out very rare events than to waste constantly during normal periods. Very few people _need_ to have their new GPU or PS5 right now.
  - greedo 5y ago
    Waiting might be the best option, but inaction might also kill the patient. Think of it as a patient with arrhythmia. Sure the patient might simply have sinus tachycardia that goes away when the patient's fever dissipates. Or it might be ventricular fibrillation that can easily kill the patient.
  - 5y ago
bsder 5y ago
True, but what isn't on the table is producing locally even if it doesn't optimize to the penny instead of shipping crap halfway around the world to save half a cent. This has the advantage that you already have industries that have capacity that can scale up. You have people trained who can train others. You already have equipment and facilities to which you can add to to break a bottleneck. Basically, vertical integration at the country level. Of course, this is the CEO of a shipping startup so that solution isn't on his plate of possibilities.
efficax 5y ago
the wood in my house is over 100 years old and is still in good shape. Stored properly, wood lasts very long. but i get your overall point. A balance has to be struck between too much and too little inventory...
- m4rtink 5y ago
  You can see wooden constructions in european churches hundreds of years old & possibly even older in many temples and shrines in Japan.

modeless 5y ago

> In the grand scheme of things, having a couple weeks of extra inventory on hand will not help you weather a 100 year storm. That's not really what he's saying. It's not about a single company, it's about the whole economy. When every company is running JIT, a small temporary supply disruption anywhere can bubble and propagate through the whole chain, becoming a huge disaster. It's like a traffic jam; when a highway is running right at capacity it only takes one person hitting the brakes to turn the whole thing into a parking lot. Except it's worse than a linear highway because the economy has many backlinks where companies early in the chain rely on companies later in the chain, causing feedback loops. Whereas if there was slack in the system then the relatively small initial shock wouldn't propagate.

legitster 5y ago
Supply chain issues were sooo much worse before JIT. Imagine one person taps the brakes, but every car weighs 100 tons. When companies kept huge inventories, most of it was not useful to solve the supply chain issues that came up and often made it harder to respond to demand shocks.
- notacoward 5y ago
  [citation needed]

blhack 5y ago

He's not suggesting stockpiling, he's suggested increasing the amount of RAM in the system (to us a computer analogy).

chrisan 5y ago
What exactly is the "RAM" if not inventory?
- zen_of_prog 5y ago
  I think they do mean inventory, just not sitting around in a forgotten storage room. To try other computer analogies, it might be increasing the queue size or using a capacitor.
- dkokelley 5y ago
  Production and logistics capacity. If you run a factory at 100% efficiency, anytime >100% throughput is necessary you get backlogged. If you have ~15% headroom as a GOAL, you can weather a shock without any downstream impact. In the case of the Port of LA shipping containers, optimizing lot storage so that you always have exactly enough space (100% efficiency) breaks down as soon as that space requirement jumps to 110%.
  - blitzar 5y ago
    > breaks down as soon as that space requirement jumps to 110%. It breaks down at 100.0001%. At 110% the butterflys wings are flapping and creating storms on the other side of the planet.
reportingsjr 5y ago
And a counterpoint to this, bufferbloat, which caused lots of unnecessary latency issues in networking for years.

Grakel 5y ago

Quite the opposite, the lumber industry has been selling greener and wetter wood year after year. If they would stockpile the quality would increase, and they could build a cushion to fluctuating demand.

rsj_hn 5y ago
I've noticed this with musical instruments, and it sucks. This has been a chronic problem with Gibson guitars, but also even small scale luthiers are being hurt. https://www.guitarworld.com/features/adam-jones-i-told-gibson-you-know-the-wood-was-different-back-then-and-they-went-were-going-to-match-it-the-guitar-is-heavy-man https://www.guitarworld.com/features/adam-jones-i-told-gibso...
legitster 5y ago
Haha! Point taken.
reportingsjr 5y ago
Do you have a source to back up either of these claims? 1. greener/wetter wood 2. quality increase from drier wood There are standards for the moisture content in dimensional lumber. It's unlikely lumber yards are going to be selling wood that's outside of the standard ranges. Additionally, some of the soft woods are a PITA to deal with if they get too dry, as they are more prone to cracking when driving fasteners without drilling holes. Much of the quality issues stem from having cut down most old growth forest and converting these past forests to farmland or suburban yards. The primary source for fir, spruce, and pine these days that are used for dimensional lumber come from managed farms. The trees are only grown as long as needed to harvest certain sizes of lumber. This leaves you with grain running in less than ideal directions and a lot of sapwood instead of heartwood. To be honest though, most dimensional lumber people complain about is fine for the sort of framing it's used for. It's a lot more efficient to use wood the way we currently do, rather than clear cutting our now very rare old growth forests and producing high quality, wasteful lumber. Increasing lumber stockpiles isn't going to solve any of these issues.
- Grakel 5y ago

arendtio 5y ago

Even if you are right, what would be your solution? I mean, the problem is not that we lack transparency, but that we have run out of options to fight the bottlenecks. Having some stockpiles as buffers would be one options to fight the problem.

urthor 5y ago
Is there even a better solution than to let the current supply chain issues play out? The status quo with supply chains and manufacturing is there for a reason, silicon in particular reflects its boom bust cycle as well as the absurd costs of CapEx. I think people are reaching when they table the hypothesis that current supply chain issues are due to mistakes or mismanagement of some middle manager, in some corporation somewhere. Maybe, just maybe, the cost of having a bunch of spare infrastructure for a once in a lifetime rearrangement of the supply chain due to Covid isn't worthwhile?
- arendtio 5y ago
  Sure, waiting is an option. But I wonder which other options are available in the long term. We talked about stockpiling. But how about rearranging the supply chains? Distribute the production of products? Shortening the supply chains? Estabilishing multiple cheap transport routes? etc.
Gigachad 5y ago
The solution is to wait. It's better to wait out very rare events than to waste constantly during normal periods. Very few people _need_ to have their new GPU or PS5 right now.
- greedo 5y ago
  Waiting might be the best option, but inaction might also kill the patient. Think of it as a patient with arrhythmia. Sure the patient might simply have sinus tachycardia that goes away when the patient's fever dissipates. Or it might be ventricular fibrillation that can easily kill the patient.
- 5y ago

bsder 5y ago

True, but what isn't on the table is producing locally even if it doesn't optimize to the penny instead of shipping crap halfway around the world to save half a cent. This has the advantage that you already have industries that have capacity that can scale up. You have people trained who can train others. You already have equipment and facilities to which you can add to to break a bottleneck. Basically, vertical integration at the country level. Of course, this is the CEO of a shipping startup so that solution isn't on his plate of possibilities.

efficax 5y ago

the wood in my house is over 100 years old and is still in good shape. Stored properly, wood lasts very long. but i get your overall point. A balance has to be struck between too much and too little inventory...

m4rtink 5y ago
You can see wooden constructions in european churches hundreds of years old & possibly even older in many temples and shrines in Japan.