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> what's the impact? Not this much surely. Yes, this much. I saw someone explain this well enough on reddit, but I can't find a link so I'll try and paraphras

by noodle 5y ago

> what's the impact? Not this much surely. Yes, this much. I saw someone explain this well enough on reddit, but I can't find a link so I'll try and paraphrase it. Let's say you're a lumbermill and you run at 100 boards a day in normal times, with enough capacity to do 110 boards a day if you stretch. COVID shut you down for 3 months. You now have a 9000 board deficit from your normal production, with people lined up to buy the boards before you've produced them. Once you get started again, you crank up capacity to 110/day - it takes you 900 days - almost 2.5 years - to recover that original shutdown deficit, without accounting for any of the increased demand for your product. This is roughly what other industries are experiencing. "Why don't you just make a new factory to increase your production?" well, it would take a long time to do that, would take a lot of capital, the shortages impact you too, and there's no guarantee that once COVID passes, demand won't go back down to 100 boards/day leaving you with a huge unnecessary capacity. A simple example, of course, but this kind of thing is happening in some form or another in most industries, and will just take some time to work itself out.

vineyardmike 5y ago
Great example! Easy to understand, and clearly away from any "conspiratorial" answer. Just to tack onto it... > Once you get started again, you crank up capacity to 110/day - it takes you 900 days - almost 2.5 years - to recover that original shutdown deficit, without accounting for any of the increased demand for your product. This is best-case scenario. Likely is that a few % of your workforce will have been out sick with covid (or even passed away), and a few % of your workforce may have quit to care for family, or quit for better pay elsewhere, etc. So your "work extra hard to hit 110/day" is more likely "work extra hard to stay at 100% or even 90%". Especially limiting if you need to buy parts for your output that may be delayed due to others who are behind.
- noodle 5y ago
  For sure - my example is just a very basic one to show how easily most industries can slide into a hole that takes time to dig out of even under good conditions. The reality is even more complex.

by noodle 5y ago

vineyardmike 5y ago

Great example! Easy to understand, and clearly away from any "conspiratorial" answer. Just to tack onto it... > Once you get started again, you crank up capacity to 110/day - it takes you 900 days - almost 2.5 years - to recover that original shutdown deficit, without accounting for any of the increased demand for your product. This is best-case scenario. Likely is that a few % of your workforce will have been out sick with covid (or even passed away), and a few % of your workforce may have quit to care for family, or quit for better pay elsewhere, etc. So your "work extra hard to hit 110/day" is more likely "work extra hard to stay at 100% or even 90%". Especially limiting if you need to buy parts for your output that may be delayed due to others who are behind.

noodle 5y ago
For sure - my example is just a very basic one to show how easily most industries can slide into a hole that takes time to dig out of even under good conditions. The reality is even more complex.