White House Launches Task Force To Address Supply Chain Disruptions (nbcnews.com) 73
The White House announced this week that it will establish a task force to address supply chain challenges in key sectors where "a mismatch between supply and demand has been evident." From a report: The task force will focus on "homebuilding and construction, semiconductors, transportation, and agriculture and food" and will be led by the secretaries of commerce, agriculture and transportation, the White House said. As the U.S. has reopened its economy, changes in demand have caused the disruptions, the White House said.
"While these short-term supply chain disruptions are temporary, the president has directed his administration to closely monitor these developments and take actions to minimize the impacts on workers, consumers, and businesses in order to bolster a strong economic recovery," it said. The actions come as the White House released the findings of a 100-day review of critical U.S. supply chain issues in a 250-page report Tuesday. The report includes recommendations that the White House said "will not only strengthen the four prioritized supply chains, but will rebuild the U.S. industrial base and restart our innovation engine."
"While these short-term supply chain disruptions are temporary, the president has directed his administration to closely monitor these developments and take actions to minimize the impacts on workers, consumers, and businesses in order to bolster a strong economic recovery," it said. The actions come as the White House released the findings of a 100-day review of critical U.S. supply chain issues in a 250-page report Tuesday. The report includes recommendations that the White House said "will not only strengthen the four prioritized supply chains, but will rebuild the U.S. industrial base and restart our innovation engine."
Problems and Solutions (Score:2, Insightful)
Great! So, the White House is now creating a task force to solve the problems created by Biden's policies. Wouldn't it just be easier to just reverse the failed policies instead?
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And which policies would those be, exactly?
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Re:Appeasement of.. (Score:5, Insightful)
Aside from globalization, etc....one of the things we've been seeing is the extreme weakness in the current system of "just in time" paradigm in business we've been on for I guess a couple of decades or more.
We no longer have companies with warehouses, or shelves with stored inventory, everyone is timed to be manufactured, shipped and delivered "just in time" for the demand.
However, if even one cog breaks in the chain....things get tight, products disappear, and we have shortages.
Now..throw something that hits more than one cog like a pandemic and well, you can see what happens.
It was more profitable to do JIT....but, will we go fully back to it?
I mean, there really isn't jack shit the govt. (US) can do or mandate about that, unless the govt itself wants to build and stockpile certain items just in case....but what will it mean for how private businesses conduct themselves?
We'll of course, need to look seriously into how at least some important things are globalized, but even so, I wonder what the govt can tell a US private business what to do, eh?
Re:Appeasement of.. (Score:5, Insightful)
Just-in-time is like agile - it is not implemented correctly / appropriately in a large number of cases, usually in the typical American corporate plague of "this quarter" short-sightedness
Look at Toyota - they originated JIT, and yet are one of the few manufacturers not suffering from chip shortages. Why? Because to Toyota JIT does NOT mean zero inventory (sound familiar to agile espousing bozos?), it means having an APPROPRIATE amount of inventory
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JIT/Lean builds strong supply chains that are robust and flexible. Lean supply chains are BETTER in case of supply chain disruptions, not worse. One of Toyota's triumphs was when they could change dies in their factory in 1 minute, meaning they could go
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But what about a factory that makes just one thing...if its parts supply is hit, they are dead I the water without any backup parts inventory, right?
Or even for a factory that makes varied products, like say Ford....but all of those products depend on a common part, like a computer chip.
We've seen car manufacturers come to a halt or have to make vehicles without full capabilities due to chip shortages.
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Re:Appeasement of.. (Score:4, Insightful)
50 democrat senators will build roads and bridges? Or will they throw money ineffectively at the problem?
And honestly, which bridge are you referring to that allowed China to overtake us and once fixed will put us back in the lead?
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Biden's infrastructure bill is looking less and less likely to pass. That is a good thing for several reasons:
1. It is designed to be a stimulus to generate jobs. But as the economy has shifted out of lockdown, the problem is the exact opposite: Plenty of jobs, not enough workers.
2. For decades, people have been predicting that the "infrastructure deficit" would lead to disaster. Yet, decade after decade, civilization has failed to collapse.
3. We should fund infrastructure at the local level with local
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So, I think it would be hard to say the Dems in power now really have that powerful of a mandate from "the nation".
That being said, if they really DID care about things, rather than start off with every legislation package pie in the sky, full bore wishlist....they could start with some easy to pick fruits.
Let's start with infrastructure.
Pretty muc
Re:Appeasement of.. (Score:4, Interesting)
It's only Sinema and Manchin who are obstructing. Mostly Manchin. And democrats have the no margin in the Senate.
Funny how Manchin offered a compromise to McConnel, and McConnel turned it down. Sorry, yeah, most of the country blames the obstructionist Republicans, whose only strategy is to hurt America so people will dislike Biden. That's shitty. It's been their only play since Obama.
Seriously, what have Republicans done to help the country? Be specific. Cite legislation they passed.
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How? What exactly has Biden done to "appease" the Chinese government?
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You mean how the previous 4 years, of trade tariffs and other nationalistic and isolation policy, put America's Economic infrastructure running on thin margins, in term of supply chain. So when the economy recovered from the previous recession there isn't a good trading relations with other countries and previous long term trading partners who had been cut off, now have to go back to step on in trade negotiation.
The only thing that Biden did to cause the supply chain was able to help America get vaccinated
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You're blaming just-in-time production on Donald Trump? TDS is a heck of a drug.
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Shut up troll. Businesses have been offshoring stuff as fast as they possibly could and relying on "just in time" ever since Ross Perot's "Giant Sucking Sound". NOBODY MADE THEM do that. Once again, Big Daddy government has to step in and deal with the mess the "self regulating" Market created because the Market was oh-so-efficient.
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Comment removed (Score:5, Interesting)
Re:Risk management and just in time (Score:4, Insightful)
Well, unless you advocate for doing away with that little thing our entire system of government was founded upon, the US Constitution...there's really no way for your Step #1 to even be implemented.
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Eminent domain and civil forfeiture say hi.
More misery than God (Score:1)
Here's what we need to do in order to stop this:
1) Immediately nationalize all production that is related to the basic necessities of life: food, fuel, water, utilities, Internet, housing.
Because the 58 million dead from communism in the soviet union, the 73 million dead from communism in China, 3 million in North Korea, plus the stunning failures of Cambodia, Vietnam, Afghanistan, and Cuba are not conclusive enough.
It really hasn't been tried, people. Let's do it again, this time for sure!
Communism is the most murderous political regime ever, and has caused more misery on the planet than God, dwarfing the holocaust by almost 2 orders of magnitude. We don't allow people to advocate for the h
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Please go read Gulag Archipelago, you are asking for things you don't have the slightest idea about. Marxism has already been tried, we don't need to try it again. Although you would probably fare well in a neo-marxist revolution, the first thing they do is get rid of educated people.
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So who will bring the money to the party? For critical industries the government does things like pay farmers to grow crops that are wasted or given away, maintain a strategic oil reserve, and restrict trade to protect domestic production.
So now we decide that computation is also a critical industry and should likewise be regulated and subsidized. It raises so many issues. How well it is
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A primary reason for just-in-time everything was a tax code change to tax inventory.
So a business can keep inventory - which already has capital and storage costs - pay taxes on it and raise prices to match, or - what actually happened - just say 'fuck it' and work to eliminate all inventory. Hence a fragile economy easily upset by inconsistent supply which creates shockwaves and positive feedback loops.
Returning to taxing only profit wouldn't solve this overnight, but it's a necessary precondition.
One wou
Re:Risk management and just in time (Score:5, Insightful)
In a nutshell, COVID-19 caused the supply chain problems, but not always in the obvious and direct way. One of the ways the video goes into is that people stuck at home during lockdowns responded by buying a shit-ton of stuff, and since stuff mostly comes from China that's created huge backlogs at West Coast ports.
The thing is, the pandemic was a black swan event -- something that you need to weigh in your plans, but not something which you'd probably let drive your planning. To be able to take something like this in stride, *somebody* has to eat the cost of acquiring resources that stand idle most of the time. We can increase port sizes or number of ports, but we almost are *never* going to need that capacity. Manufacturers and distributors can increase inventory sizes, but that ties up capital on stuff that sits on the shelf costing money rather than making money. They could develop alternative suppliers who deliver goods through a different channel, but that will cost them money during the normal times. The reason they use East Asian suppliers is that those suppliers are *cheaper*.
This is a close financial analogue of the recent Texas blackouts. The Texas system does a pretty good job of keeping electricity cheap and available most of the time, in part at the cost of electricity occasionally being very expensive and widely unavailable. What we're looking at either way is businesses optimizing the common case. Both the Texas generators and car rental companies who slimmed down their fleets engaged in what, over the long term, is effective profit-maximizing behavior. The problem is that strategy creates problems for others dependent upon their services.
Task Forces (Score:2)
You'd think we have enough ineffectual task forces already. Nope. He's just getting started, folks.
What sort of actions can one anticipate him taking? Stockpiling lumber? Stockpiling semiconductors? Paying farmers even more to hold crops and acreage in reserve?
These are market issues, not political ones. Better to let the market figure it out than to have politicians making matters worse at the expense of taxpayers.
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The market is unwilling to fix the problem. Profits go up during shortages, and no Harvard MBA since the great Lean takeover of the 1990s will ever sign off on capital spend, so here we are.
Apple, Intel, and TI are all drowning in cash. Apple is sitting on almost a TRILLION dollars in CASH, and could build 5 fabs tomorrow if it wanted, but no, the taxpayer has to pay for it because modern corporate culture will not spend money on capital - period.
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These are market issues, not political ones.
I mean have you ever lived in the US? I'm not saying you're wrong, but I am saying is that gasoline could go up two cents tomorrow and people will blame politics somehow. I get it, but you also have to look at it from their end too. It's a damned if you do and damned if you don't kind of deal.
Better to let the market figure it out than to have politicians making matters worse at the expense of taxpayers.
Well I will say, the market is horrible at figuring shit out. Mostly because the principal actors in the market are the consumers and they're crazy as shit fucks, I should know, I'm one of those insane folks. The
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Even then it wouldn't work, because of time lags, and perverse incentives like "golden parachutes".
The process "sort of" works when families own the companies. Especially when there's a strong "family feeling". But it doesn't work when the managers are "short term committed". And that's true of every single publicly traded corporation.
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The Market isn't going to fix the shit that it caused.
Out of time inventory. (Score:2)
We have been running our businesses too thin lately (the past 3 decades or so). So much focus on cutting costs, and less focus on attracting customers.
One of businesses major Costs is Inventory Costs. Having hundreds of thousands of square feet of real-estate just so you can keep material sitting there for weeks or months, having to buy a lot of product upfront as well if there is a change you have to find a way to get rid of the excess, and it is much worse if the inventory has a shelf life.
Inventory is e
Help us? Please don't. (Score:1)
Reagan understood this: "The nine most terrifying words in the English language are, 'I'm from the government, and I'm here to help.'"
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The private sector is fucking up so now government has to step in. This is a global problem as I can’t buy connectors from the Swiss company Lemo without massive lead times.
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The solution is simple... (Score:2)
What about ammunition? (Score:2)
I can't find ammo in stock anywhere. I'm really glad they're going to look into that.
Oh, wait..
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Check with the families of the DC Q Raiders, they may have spares while their perps are in the pokie.
Market Panic (Score:3)
Elon Musk has likened the supply chain shortages to the earlier toilet paper shortage; Corporate buyers purchase far more than necessary for immediate production because there is a shortage and there is a shortage because corporate buyers are purchasing far more than they need for immediate production. That is exactly what happened with toilet paper, there was no increase in use if toilet paper nor decrease in production because of coronavirus. Retail toilet paper shortages were driven purely by consumer panic.
Consumer electronics purchases, particularly computers and especially gpu cards after the cryptocurrency price surge, have increased. Presumably, Musk's point is that not all, but only supply chain shortages in excess of those driven by increases in consumer buying result from the toilet-paper effect.
Musk also remarked that near-term shortages of raw materials are particularly severe, but that seems like a problem specific to the electric car business. Tesla wants to to ramp battery production very fast and resulting increases in use of nickel and lithium will be a large fraction of current production.
Re: Market Panic (Score:2)
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Your toilet paper shortage is a shit example. The Covid19 bug causes the shits, which causes people to use more paper.
But at the time of the shortage, hardly anyone had covid yet. [worldometers.info]
The cause is obvious (Score:2)
It's about time (Score:3)
I cal this 20 years ago where I work for a bank.!
The server was part in Africa and part in East European country, the software was created by a canadian company in India!
Then, 5 years after I'm gone, the bank was hacked on their servers somewhere, all users data was stolen and they didn't know why, Yeah Right
If they was kepping their shit together and control every flow of their data, that wont be this shit.
They certainly save millions by outsourcing, but lost billion !
Outsourcing is bad !
The alternative is anti-hoarding and rationing (Score:2)
Forbid imports/sales of hoarded materials at multiples of the pre-shortage prices, then after all the hoarders give up trying to take massive profit and just sell, ration until backlog is removed.
I don't trust government to do that effectively though, so just let the chips fall where they may.
How about throwing a CEO in jail? (Score:3)
The decision makers at Solarwinds, Equifax and OPM should have been jailed. Do this a few times and security will improve, quickly.
Missed it in 1. (Score:5, Interesting)
"While these short-term supply chain disruptions are temporary"
Really? This statement ALONE would suggest that they haven't the faintest idea of the scope of the issue, to say nothing of a fucking clue of what's needed to solve it.
I've been in supply chain and international logistics since 1990.
IIRC 2015 capacities were surplus and ocean carriers were slitting each others' wrists for cargo. You could book a 40' from HK to Santos for $100. Yes, the document services cost more than the o/f.
More typically, a container from China to the US west coast is $1200-$1500.
Right now, forwarders are AUCTIONING available ship spaces and it's not uncommon to see desperate shippers paying $10k+ for that same 1x40.
A/F from EU to US is historically about $1.25/lb. Today it's easily $3/lb - I've seen it spike over $6-$7 on occasion.
Normally booking a container in Europe you can get an empty 3-4 days ahead of loading. Now it's 6+ WEEKS to get an empty that may not even show up.
We have seen port dwell times for inbound containers in LA/LGB (a particularly bad example, as they are around half of US imports) go from a normal 2-3 days to 6+ WEEKS. This is often at the tail end of an import where the Asian shipper has fought for 4+ weeks just to get the empty to load, and then watched it get pushed from sailing to sailing before it actually departs, turning a normal 3 weeks shipment to 15 weeks from booking to delivery.
And THAT means that you need 5 TIMES the number of containers and ships to sustain the tempo...which nobody has nor can quickly invest in at $100 mill per ship.
Most lately, drayage (container-hauling) drivers are starting to quit their jobs to go work for the more lucrative trucking industry (which itself has been a basket-case disaster since October, but they've been having driver shortages since 2009).
Journal of Commerce LAST WEEK published an article expressing that not only is there apparently no "light at the end of the tunnel" on the current circumstances, but many indicators are that it's going to get WORSE.
Nah man, this is globally, catastrophically bad. Like...years sorting this out. People outside this industry could never comprehend how much of a razors-edge this whole juggling act required and now the balls are all falling to the floor.
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Supplyageddon?
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It's almost like the PHBs with MBAs might have been wrong in outsourcing all their manufacturing to Asia in pursuit of 0.1% unit-cost savings?
Logistics are a system like any other. The more finely tuned (evolved) they are for a specific environment, they will outcompete any other less-well-tuned example in that environment.
If you have a very stable, safe environment, it makes sense to evolve specifically to those conditions - you will outcompete everyone.
But when (inevitably) the environment starts to chan
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And THAT means that you need 5 TIMES the number of containers and ships to sustain the tempo...which nobody has nor can quickly invest in at $100 mill per ship.
And even if they could they wouldn't. Because after the glut is worked through there'd be so much overcapacity, they'd all be back to slitting each others wrists even worse than before.
"I'm from the government, and... (Score:3)
...I'm here to help." The nine most terrifying words that you can hear.
The government is mostly an expert at screwing markets up. Just as an example: housing, and the current lumber shortage (prices have nearly tripled!). Presently, the US is importing huge amounts of lumber from Europe. To make up for the shortage, Europe is importing wood from Canada. Of course, this makes no sense at all, but it is happening because the US government decided to "help" the lumber industry, by imposing tariffs on Canadian lumber. Oh, and the US is about to help some more, by doubling those tariffs. [constructconnect.com]
It'll be great, when this new task force starts helping even more :-P
It's about time (Score:2)
they found out the cause of all this chaos, because if they trace the source of the supply disruption problems, it all started when they ordered the 3rd stimulus (for the record I think the first one was fine, second one excessive and the 3rd one downright unnecessary) . Now we have so much dang money around all people can do is spend it, driving up demand and prices.
So, Republicans then? (Score:2)
Study it (Score:2)
Ah yes, we shall study it. We will assign the same people who caused the problem to study it. Yeah, that's the ticket.