6 ms·

Having gone through the painful exercise of building robots in the US, I appreciate the problem. Our end-end supply chain latency was 16 weeks, far too long to

by tlb 15y ago

Having gone through the painful exercise of building robots in the US, I appreciate the problem. Our end-end supply chain latency was 16 weeks, far too long to scale effectively to match demand. Many component changes we wanted to make would have created a 6-week delay, so we had to compromise. A place with a factory across the street that could make screws in 3 hours sounds like heaven.

e40 15y ago
But what is the cause and what is the effect? The supply chain latency in the US is so high because over the last 3-4 decades we've moved from a producer to a consumer. It's because we don't manufacture stuff anymore that this latency is an issue.
- bdunbar 15y ago
  It's because we don't manufacture stuff anymore that this latency is an issue. I love it when people say that. I love it because I work for a company that very much does still make stuff in the US. We just make more stuff, with fewer people. We also make stuff in Asia, EU, Mexico. It's hard to stereotype who makes what - but generally sites in NA make the complicated, expensive widgets, Asia make the high volume not-so complicated gear, EU is a mix.
  - ChuckMcM 15y ago
    Harder to find. Where is the alibaba.com of the US? Lets say I want to manufacture a device with a printed circuit board, a case, and some artwork. Where can I fill out a form and have it go to at least a dozen the US manufacturers and have them come back with bids? This is a huge gap that filling would reap both financial and political rewards.
    - showerst 15y ago
      You can't, because that work can't be done here economically, we've moved further up the value chain. On the flip side, let's say you want to manufacture a new custom processor for your ipad competitor, or turbine for your new 787 competitor. You won't get those things in China, at least not without significant involvement from US companies.
      - ChuckMcM 15y ago
        "You can't, because that work can't be done here economically, we've moved further up the value chain." Fundamentally I don't believe that. I could just be stupid. I see the automation that is possible in the US, the infrastructure, and you tell me that its not possible for someone to make a business out of assembling things? Sure its cheap to pull 10 dextrous laborers out of the Chinese working class and make an assembly work cell out of them, what prevents a technologically sophisticated engineer from doing the same with one robot workstation and some programming? I've had boards made and assembled in the US, that is pretty straight forward, getting a tool and die shop to make cases isn't that hard either. What I haven't seen is an infrastructure that ties together all of these small shops like the ones in China, Korea, and Malaysia do. Disruption is our middle name, why not disrupt the world of real goods? Here is my thesis, creating a 'small' factory in the US is hindered by the inability of that factory to find work to fill its capacity. That limits its ability to make a profit, so the bids are priced to make sense when the factory is running far below its ability to produce. That makes the costs of goods it produces 'expensive' relative to a factory which is running at or near its theoretical capacity. If we had a way of keeping those small factories pipelines of work 'full', they could charge less because they would be getting more work out of their sunk costs (equipment, facilities, power, etc). In terms of comparative advantage we gain, transportation and communication benefits to the local markets. So tell me why that isn't possible?
        showerst 15y ago
        It's not that it isn't possible, it's that given the resources we have, it isn't optimal. Your thesis is wrong not because it can't be done, but because the competitive gains (transportation, communication) don't outweigh the gains to doing much higher value-added tasks. (Not to speak of the potential costs in having to pay higher wages, deal with environmental concerns, etc, but i'll leave those out because they're political, not fundamental.) Let's say the US only has 10 engineers, but they're really really good. China has 50 engineers, but they're less good. (Good being a stupid shortcut to saying they have more domain expertise/resources, not Jingoism about the quality of Chinese engineers). Now the US engineers _could_ start a factory making iPods, and they'd be just as good as the Chinese, or just a little better and sell for around the same price, with a profit $X. It's relatively low startup cost, and has relatively low barriers to entry. Or, the US engineers could start a factory making specialized composite-material airframes for space ships, which the Chinese lack the ability to build at all (so far), with a profit of $50 * X. It's much higher startup cost, and has huge barriers to entry, so there won't be competition for years. The US engineers can build the wings, buy iPods from the Chinese engineers, and still pocket a huge difference! Meanwhile the Chinese engineers are thrilled to build ipods, because it's the first step in learning the skills to build Rockets. (Nonsense example, but you get the idea) This is basic comparative advantage with respect to a value-added chain. Your theory would override this IF we had unlimited engineers and a basically level playing field for production costs at the low end, but we don't for tons of reasons, mostly around regulation (which I'm not saying is a blanket bad thing). With only so much capital, why make iPods when you could be making satellites? Now of course this example is trivial for lots of reasons, but the general pattern has been playing out for 100 years. As nations gain expertise and working capital, they move up the value chain and outsource what they lack the resources or environment to build cheaply. Historically this gain in ability has been accompanied by an associated gain in wages/worker protections (for lots of complex reasons), which even further propels you a nation to move up the value chain, since you only want to build the most profitable possible things that you can.
    - 8bitliving 15y ago
      I think Ariba.com may be able to do what you described.
  - e40 15y ago
    So because you work for a company that makes stuff, my argument is invalid. You realize I wasn't saying we make nothing at all, right? It's that we are ever making less in the US and ever buying more made elsewhere.
    - michael_h 15y ago
      You may want to check your data sources or clarify if you mean 'manufacturing jobs' or 'manufactured goods'. One of those has decreased significantly, while the other has increased...a lot.
    - deleted 15y ago
      [deleted]
    - bdunbar 15y ago
      I took your words literally. Sorry about that. It's that we are ever making less in the US and ever buying more made elsewhere. iPods, sure. But if you're talking really expensive, high-quality, hard to make stuff ... it's likely made in the US. One just doesn't see it because the average guy sees a lot of cell phones, and iPods, but doesn't really notice manhole covers or iron-castings with millionth-of-an-inch tolerances.
- acslater00 15y ago
  That's a myth. The US has a huge and growing manufacturing base. We make airplane engines, medical devices, computer chips; all kinds of complex, high-tech manufacturing. We have the highest manufacturing productivity per worker in the world. What we don't make anymore are the kinds of products that require rote assembly tasks, like shoes and clothes and iPads. The upshot is that we have decreasing manufacturing employment even as the manufacturing sector grows rapidly. Would it surprise you to learn that US manufacturing output looks like this? http://research.stlouisfed.org/fred2/series/OUTMS http://research.stlouisfed.org/fred2/series/OUTMS
  - tlb 15y ago
    Everything you mention has long design cycle times. Airplane engines and medical devices need certification, which means you can't iterate fast anyway. Chips take 8+ weeks to iterate on the lithography. An efficient consumer electronics operation in China can iterate every day.
  - e40 15y ago
    You realize I didn't mean we manufacture nothing, but that we manufacture much, much less than we used to, right? If we can't agree that manufacturing started to move out of the US decades ago, was accelerated by NAFTA, and that we are a consumer of goods made elsewhere (more than others are a consumer of goods made here), then this conversation isn't going to go well.
    - Locke1689 15y ago
      You're right, it won't go well, because you don't seem to know what the facts are. Check the parents data. Not only do we manufacture things, we manufacture much, much more than we used to.
    - liber8 15y ago
      Not sure what metric you're using to claim that we manufacture "much, much less than we used to". US manufacturing output continues to hit all-time records. Measured in real dollars, output is ~40% higher than in 1990, and ~$220% higher than 1970. See http://unstats.un.org/unsd/snaama/dnllist.asp http://unstats.un.org/unsd/snaama/dnllist.asp for data.
- tlb 15y ago
  Both: it's a self-reinforcing downward spiral.
jonknee 15y ago
You were also operating at an entirely different scale than Apple. You'd have a hard time getting your end product to the US, while Apple simply buys up enough air freight from China to screw up everyone else's supply chain. Apple doesn't go to the factory next door and buy screws when it needs them, they need millions of screws to very specific specs and sign deals to have them made by different suppliers for years at a time. They'll go as far as financing the new factory that is required to fulfill their monster orders. The same rules just simply do not apply.
- tlb 15y ago
  For things like Retina LCDs they make strategic long-term arrangements. For screws and resistors &c, anyone can just buy them. Even Apple's demand for screws is not a significant fraction of China's output.
- excuse-me 15y ago
  One of the examples ( in the original article that this posts copies ) Apple changed the glass on the screen with 6weeks until launch. Corning had opened a factory nearby to make the glass and were able to change the screen shape quickly another nearby company was able to drop everything and make new gaskets. It takes 6weeks to ship product from Corning's US factory to China.
  - jonknee 15y ago
    > It takes 6weeks to ship product from Corning's US factory to China. And they could build a factory anywhere in the world. In the mean time, they can ship as fast as they need. Apple already ships from the factory nearly directly to customers in the US in a couple of days.
    - excuse-me 15y ago
      I suspect the margin on finished iPads supports airfreight. The margin on components doesn't
  - cubicle67 15y ago
ChuckMcM 15y ago
So I totally resonate with this, but I ask this question: "What would it take to create a factory that could make an arbitrary fastener in 3 hours?" There are things like having material stock, stamps, etc. But if you look at a screw factory one of the things that jumps out at me is that all the machinery is old old old. Which is to say, the typical fastener factory seems to have machines that were originally tooled up to make war material in the 40's and 50's. Today, I've sintered carbide cutters, lasers, and machine tools that can repeatedly cut to a tenth. So why can't I build a factory which uses programmable tooling (aka 'soft tooling') that can produce thousands of fasteners per minute? The process can be made parallel in a very straight forward way, more production stations. Not a YC startup, but how do we get investment in this kind of idea? Can we even? I love reading some of Elon's comments about how ossified the space manufacturing industry is, and how they created things in weeks that the 'experts' were saying would take months or even years to make. We've got Jeff Bezos pulling F-5 engines out of the Atlantic, can we get him to fund the most amazing fastening company ever? Such that any fastener in the catalog can be produced in quantities from 1000 to 1,000,000 with a process where manufacturing costs are fixed across the volume window? If not, why not?
- anandkulkarni 15y ago
  The acquisition cost of a soft tooler is presumably sizably higher than the cost of maintaining antiquated production equipment. It's likely that the per-item throughput cost of a programmable tooler is sizably higher than that for a single-function device. Before even asking about investment, you should check to see that the math actually makes it profitable to have a soft-configurable factory doing short-production runs. If you do, I think you'll find your answer about why this sort of thing doesn't exist yet (although it does, in China!)

by tlb 15y ago

e40 15y ago

But what is the cause and what is the effect? The supply chain latency in the US is so high because over the last 3-4 decades we've moved from a producer to a consumer. It's because we don't manufacture stuff anymore that this latency is an issue.

bdunbar 15y ago
It's because we don't manufacture stuff anymore that this latency is an issue. I love it when people say that. I love it because I work for a company that very much does still make stuff in the US. We just make more stuff, with fewer people. We also make stuff in Asia, EU, Mexico. It's hard to stereotype who makes what - but generally sites in NA make the complicated, expensive widgets, Asia make the high volume not-so complicated gear, EU is a mix.
- ChuckMcM 15y ago
  Harder to find. Where is the alibaba.com of the US? Lets say I want to manufacture a device with a printed circuit board, a case, and some artwork. Where can I fill out a form and have it go to at least a dozen the US manufacturers and have them come back with bids? This is a huge gap that filling would reap both financial and political rewards.
  - showerst 15y ago
    You can't, because that work can't be done here economically, we've moved further up the value chain. On the flip side, let's say you want to manufacture a new custom processor for your ipad competitor, or turbine for your new 787 competitor. You won't get those things in China, at least not without significant involvement from US companies.
    - ChuckMcM 15y ago
      "You can't, because that work can't be done here economically, we've moved further up the value chain." Fundamentally I don't believe that. I could just be stupid. I see the automation that is possible in the US, the infrastructure, and you tell me that its not possible for someone to make a business out of assembling things? Sure its cheap to pull 10 dextrous laborers out of the Chinese working class and make an assembly work cell out of them, what prevents a technologically sophisticated engineer from doing the same with one robot workstation and some programming? I've had boards made and assembled in the US, that is pretty straight forward, getting a tool and die shop to make cases isn't that hard either. What I haven't seen is an infrastructure that ties together all of these small shops like the ones in China, Korea, and Malaysia do. Disruption is our middle name, why not disrupt the world of real goods? Here is my thesis, creating a 'small' factory in the US is hindered by the inability of that factory to find work to fill its capacity. That limits its ability to make a profit, so the bids are priced to make sense when the factory is running far below its ability to produce. That makes the costs of goods it produces 'expensive' relative to a factory which is running at or near its theoretical capacity. If we had a way of keeping those small factories pipelines of work 'full', they could charge less because they would be getting more work out of their sunk costs (equipment, facilities, power, etc). In terms of comparative advantage we gain, transportation and communication benefits to the local markets. So tell me why that isn't possible?
      - showerst 15y ago
        It's not that it isn't possible, it's that given the resources we have, it isn't optimal. Your thesis is wrong not because it can't be done, but because the competitive gains (transportation, communication) don't outweigh the gains to doing much higher value-added tasks. (Not to speak of the potential costs in having to pay higher wages, deal with environmental concerns, etc, but i'll leave those out because they're political, not fundamental.) Let's say the US only has 10 engineers, but they're really really good. China has 50 engineers, but they're less good. (Good being a stupid shortcut to saying they have more domain expertise/resources, not Jingoism about the quality of Chinese engineers). Now the US engineers _could_ start a factory making iPods, and they'd be just as good as the Chinese, or just a little better and sell for around the same price, with a profit $X. It's relatively low startup cost, and has relatively low barriers to entry. Or, the US engineers could start a factory making specialized composite-material airframes for space ships, which the Chinese lack the ability to build at all (so far), with a profit of $50 * X. It's much higher startup cost, and has huge barriers to entry, so there won't be competition for years. The US engineers can build the wings, buy iPods from the Chinese engineers, and still pocket a huge difference! Meanwhile the Chinese engineers are thrilled to build ipods, because it's the first step in learning the skills to build Rockets. (Nonsense example, but you get the idea) This is basic comparative advantage with respect to a value-added chain. Your theory would override this IF we had unlimited engineers and a basically level playing field for production costs at the low end, but we don't for tons of reasons, mostly around regulation (which I'm not saying is a blanket bad thing). With only so much capital, why make iPods when you could be making satellites? Now of course this example is trivial for lots of reasons, but the general pattern has been playing out for 100 years. As nations gain expertise and working capital, they move up the value chain and outsource what they lack the resources or environment to build cheaply. Historically this gain in ability has been accompanied by an associated gain in wages/worker protections (for lots of complex reasons), which even further propels you a nation to move up the value chain, since you only want to build the most profitable possible things that you can.
  - 8bitliving 15y ago
    I think Ariba.com may be able to do what you described.
- e40 15y ago
  So because you work for a company that makes stuff, my argument is invalid. You realize I wasn't saying we make nothing at all, right? It's that we are ever making less in the US and ever buying more made elsewhere.
  - michael_h 15y ago
    You may want to check your data sources or clarify if you mean 'manufacturing jobs' or 'manufactured goods'. One of those has decreased significantly, while the other has increased...a lot.
  - deleted 15y ago
    [deleted]
  - bdunbar 15y ago
    I took your words literally. Sorry about that. It's that we are ever making less in the US and ever buying more made elsewhere. iPods, sure. But if you're talking really expensive, high-quality, hard to make stuff ... it's likely made in the US. One just doesn't see it because the average guy sees a lot of cell phones, and iPods, but doesn't really notice manhole covers or iron-castings with millionth-of-an-inch tolerances.
acslater00 15y ago
That's a myth. The US has a huge and growing manufacturing base. We make airplane engines, medical devices, computer chips; all kinds of complex, high-tech manufacturing. We have the highest manufacturing productivity per worker in the world. What we don't make anymore are the kinds of products that require rote assembly tasks, like shoes and clothes and iPads. The upshot is that we have decreasing manufacturing employment even as the manufacturing sector grows rapidly. Would it surprise you to learn that US manufacturing output looks like this? http://research.stlouisfed.org/fred2/series/OUTMS http://research.stlouisfed.org/fred2/series/OUTMS
- tlb 15y ago
  Everything you mention has long design cycle times. Airplane engines and medical devices need certification, which means you can't iterate fast anyway. Chips take 8+ weeks to iterate on the lithography. An efficient consumer electronics operation in China can iterate every day.
- e40 15y ago
  You realize I didn't mean we manufacture nothing, but that we manufacture much, much less than we used to, right? If we can't agree that manufacturing started to move out of the US decades ago, was accelerated by NAFTA, and that we are a consumer of goods made elsewhere (more than others are a consumer of goods made here), then this conversation isn't going to go well.
  - Locke1689 15y ago
    You're right, it won't go well, because you don't seem to know what the facts are. Check the parents data. Not only do we manufacture things, we manufacture much, much more than we used to.
  - liber8 15y ago
    Not sure what metric you're using to claim that we manufacture "much, much less than we used to". US manufacturing output continues to hit all-time records. Measured in real dollars, output is ~40% higher than in 1990, and ~$220% higher than 1970. See http://unstats.un.org/unsd/snaama/dnllist.asp http://unstats.un.org/unsd/snaama/dnllist.asp for data.
tlb 15y ago
Both: it's a self-reinforcing downward spiral.

jonknee 15y ago

You were also operating at an entirely different scale than Apple. You'd have a hard time getting your end product to the US, while Apple simply buys up enough air freight from China to screw up everyone else's supply chain. Apple doesn't go to the factory next door and buy screws when it needs them, they need millions of screws to very specific specs and sign deals to have them made by different suppliers for years at a time. They'll go as far as financing the new factory that is required to fulfill their monster orders. The same rules just simply do not apply.

tlb 15y ago
For things like Retina LCDs they make strategic long-term arrangements. For screws and resistors &c, anyone can just buy them. Even Apple's demand for screws is not a significant fraction of China's output.
excuse-me 15y ago
One of the examples ( in the original article that this posts copies ) Apple changed the glass on the screen with 6weeks until launch. Corning had opened a factory nearby to make the glass and were able to change the screen shape quickly another nearby company was able to drop everything and make new gaskets. It takes 6weeks to ship product from Corning's US factory to China.
- jonknee 15y ago
  > It takes 6weeks to ship product from Corning's US factory to China. And they could build a factory anywhere in the world. In the mean time, they can ship as fast as they need. Apple already ships from the factory nearly directly to customers in the US in a couple of days.
  - excuse-me 15y ago
    I suspect the margin on finished iPads supports airfreight. The margin on components doesn't
- cubicle67 15y ago

ChuckMcM 15y ago

So I totally resonate with this, but I ask this question: "What would it take to create a factory that could make an arbitrary fastener in 3 hours?" There are things like having material stock, stamps, etc. But if you look at a screw factory one of the things that jumps out at me is that all the machinery is old old old. Which is to say, the typical fastener factory seems to have machines that were originally tooled up to make war material in the 40's and 50's. Today, I've sintered carbide cutters, lasers, and machine tools that can repeatedly cut to a tenth. So why can't I build a factory which uses programmable tooling (aka 'soft tooling') that can produce thousands of fasteners per minute? The process can be made parallel in a very straight forward way, more production stations. Not a YC startup, but how do we get investment in this kind of idea? Can we even? I love reading some of Elon's comments about how ossified the space manufacturing industry is, and how they created things in weeks that the 'experts' were saying would take months or even years to make. We've got Jeff Bezos pulling F-5 engines out of the Atlantic, can we get him to fund the most amazing fastening company ever? Such that any fastener in the catalog can be produced in quantities from 1000 to 1,000,000 with a process where manufacturing costs are fixed across the volume window? If not, why not?

anandkulkarni 15y ago
The acquisition cost of a soft tooler is presumably sizably higher than the cost of maintaining antiquated production equipment. It's likely that the per-item throughput cost of a programmable tooler is sizably higher than that for a single-function device. Before even asking about investment, you should check to see that the math actually makes it profitable to have a soft-configurable factory doing short-production runs. If you do, I think you'll find your answer about why this sort of thing doesn't exist yet (although it does, in China!)