The Supply-Chain Mystery

https://www.newyorker.com/magazine/2021/10/04/the-supply-chain-mystery

by fortran77 • 5 years ago

20 18 5 years ago

ggm3• 5 years ago

I don't think there's enough in this about a two-part story: just-in-time hollowed out "resilience" to supply chain shock. So, the 'spare capacity' in the system was low, because people had pruned back excess stock holdings on the evidence that JIT was working for decades.

Then, a significant disruption to normal intermodal container flow emerged. This immediately became a compounding problem because its actually pretty chaotic: The containers themselves form a 'just-in-time' supply flow, to meet market EXPECTATIONS of need for the various flows of real supply chain goods and material inputs: When this shock hit, the system stopped having surplus container capactity to move things, which meant it was blocked in "deadlock" around moving things, which made the supply chain fragility problem emerge.

The absolute number of containers hasn't dropped: they're in the wrong places and nobody is willing to fund a one-way zero-profit ship to fix that.

Really, I think the missing word here is "externality" -If the value of an empty container and ship was re-struck in this situation, or some adverse-possession/force-majure was undertaken, the container problem would heal: As it stands, its left to market forces and with nobody willing to carry the costs, nobody is moving to fix things. After all, the evidence is (evidence? Rumour!) there's a market shock coming: who wants to be left with surplus goods, and nobody buying anything?

Its cute to blame this on evergreen and the suez, but its way beyond that. Chinese ports shut down. There's a backlog. African ports clogged up. Moving masks and PPE around disrupted normal flows. Bodies on desks changed.

Shipping runs on paperwork, regulated arbitrage, and a huge amount of personal communications and trust. (as I understand it) much of this evaporated in the crisis.

I think that airline reboot with goods, not people might be part of the answer: absorb the surplus cost, but get things moving again by putting boxes on aircraft for things normally sent in containers on ships. Won't work for coal and iron ore, will work for the plastic bags you need, to start shipping the goods which you've made, which are held up waiting for plastic shipping bags.

Global post is still broken. Before this time, I had basically never lost a letter or parcel in the post. Now, I've lost one, and know of at least one other, and had a delivery from the US take 4-5x as long as normal. I have no idea how christmas is going to work.

john_yaya• 5 years ago

I have no idea how christmas is going to work.

As a cultural Christian, I’d love to see Christmas work as a holiday where people spend time with their families and contemplate the gift of everlasting life. And, also, eat simply and not buy anything.

GravitasFailure• 5 years ago

Missing out on yet another novelty trinket to be forgotten and thrown away seems rather pleasant, really.

ianhawes• 5 years ago

While I wholeheartedly agree with you and desire the same thing, I believe just about the entire retail sector depends on Christmas spending to stay afloat.

JoeAltmaier2• 5 years ago

My sister's chocolate shop, its Easter. Took the hit in April - had hundreds of pounds of unwanted chocolate. Had to eat it (not literally).

ggm3• 5 years ago

As a cultural athiest, I will only be affected by food shortages. But, for many people, Christmas is peak sale time and so the economic consequence of an un-deliberate stall on christmas selling is huge.

For the religous, sure, its only got upsides. Maybe longterm it's only upsides. Right now, its an economic shock we might not want.

tcmb• 5 years ago

When there is a demand for empty containers, and people who have them, why isn't it profitable to ship them somewhere? When shipping costs are rising overall, it should be worth it to pay for a delivery of empty containers, rather than continue paying the higher prices.

I have no idea how christmas is going to work.

Maybe shipping things is not the important part of christmas. SCNR.

ggm3• 5 years ago

Yes, I too thought the problem would solve itself. It looks like the third party ownership in containers (they're a bizarre market in themselves) maybe broke things. As did port congestion. Low staffing because Covid compounds all problems. Maybe this is the trigger for more inter-modal automation at the ports?

As an atheist ecksmass is purely about food and friendship. As an industry "how it works" is goods get shipped. As a Christian religious ceremony it should be untouched or, as you and others say even enhanced.

haspoken• 5 years ago

https://archive.is/GbbRi

titzer• 5 years ago

A White House briefing posted the same day said that the dearth of chips was “dragging down the US economy,” and cited an estimate that it may lop a percentage point off G.D.P. growth.

Man, I can't shake the feeling that we collectively are mega stupid for making everything dependent on computer chips. Does a toothbrush need a microprocessor? Yes, apparently. I remember a discussion a while back where apparently pregnancy tests that are based on a chemical reaction literally have a microprocessor in them that uses a photovoltaic sensor to detect whether there are two lines, and if so, print out a word. Yeah, that's right. A pregnancy test[1] that you urinate on, and then throw away!

[1] https://www.theverge.com/tldr/2020/9/4/21422628/digital-preg...

A society so wasteful deserves a few supply shocks to wake it up, IMHO.

snypher• 5 years ago

"improve the clarity of a test by displaying “pregnant” or “not pregnant” on the display instead of the usual lines that can be difficult to read."

I generally agree with your point, but there is an accessibility use case for this test. If you are able to, you should choose the less wasteful option.

weikju2• 5 years ago

If you can make specific lines appear as a result of a chemical reaction… can’t you make a line or dot appear next to printed “pregnant” “not pregnant” words instead? No microchip required..

Disclosure; I know nothing about this.

cratermoon• 5 years ago

Elsewhere on HN someone suggested in a comment that we could replace the standard paper and pen lab notebook with something digital. Yeah, there's definitely a subset of people who think computer everything is better. https://news.ycombinator.com/item?id=28676325

JoeAltmaier2• 5 years ago

My nephew was busy 18 months ago, shutting down oil refineries. This is a long process (weeks) fraught with risky pressure, temperature and capacity issues - mustn't stop flow here until pressure is reduced there!

Then recently, he's back at work starting them up again.

It occurs to me that the global supply chain has more stages, controls, capacity issues and 'temperature' measures than an oil refinery. And how do we start it up again? Why, everybody twiddles the knobs they can reach randomly.

Perhaps its time for some organizing process control in this world-affecting industry.

htrp• 5 years ago

This is clearly a case of emergent systems optimizing for efficiency versus resiliency. There are numerous hidden dependencies that prevent any one entity from having a clear understanding or a view of the system.

The Supply-Chain Mystery

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