OT: Supply Chain
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Globalism is on full display. The amount of medical supplies and computer chips made in China is going to cost us big big time. A close friend of mine who is in the financial sector of Chrysler told me last week that his phone isn’t ringing much....not good folks. Garments made in Vietnam and Cambodia. Furniture, fruit and bubble gum from Mexico and Honduras. China’s global mining operations aren’t slowing down. Lakes are drying up like never before and water wars are heating up out West. Water rights out West are very interesting. Pistachios will probably be $20/lbs next year. Tyson is raising their chicken prices on September 5.
China isn't really the problem here, just a symptom. Most of the supply issues stem from American corporate business geniuses moved the U.S. from standard storage to "just in time" storage to save a few pennies. The risk of this was always there, but did not affect quarterly results so was ignored. Companies used to keep 3 to 12 months of parts and supplies on hand, but no longer, now it's more like 3 days, if that. So when supply problems started, they didn't have the backlog of storage that companies traditionally held for just this eventuality.
So of course the next step will be to ask Uncle Sam to bail them out from the consequences of their own cost cutting measures.
I work for a sub and our prices are skyrocketing. Some GCs are telling us that they will not acknowledge any price increases from subs after the bid date so we are basically guessing what the market will do in the next 6-12 months. Lead times from our suppliers have doubled and tripled
You mean like mortgage & student loan interest deductions, tax enhanced savings plans like 401k/529/IRA, and tax advantaged employer-provided health insurance coverage? That's a bold strategy, Cotton.
Heck yeah. And quit sending any federal dollars to any states that don't put in more than they take out!
I've heard the word "looophole" used before for tax returns. But, there's no such thing as a loophole. There is what's legal and what isn't.
An entitlement is different. If someone is given something without working for it, then yes, it's an entitlement.
Tax write offs like mortgage interest deduction, student interest deduction, etc. aren't entitlements. They are part of the tax code. So is your solution to supply chain issues to change the tax code? I really don't see how that will help with supply chain issues.
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I agree! Where do you wanna start? Shirley you don't mean PPP, which was a boon for manufacturers?
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Dude, I grew up in property management. It's always been a complete pain to actually evict people, with the most difficult ones requiring that the Sheriff come supervise the physical removal of their stuff as it was placed on the street. I also had a meeting with a local (Jackson, MS) landlord who has 100's of properties. He described reaching out to his tenants early on to see who might have trouble because of COVID, telling those who were concerned that they would work through it, forgoing rent on 3 properties for about 3 - 4 months each, and then working with those same tenants to catch up, which they have all done now. The world has plenty of bad in it but a lot of good as well.
This will help tremendously. I am in manufacturing and shortly after stimulus and tax return money, we couldn't get anyone to come in. Our output was very low. We are slowly getting back to normal, but it's very slow.
FYI folks, if you're contemplating getting a home generator be advised that due to national demand wait times for the most popular models (18KW to 24KW) can be in excess of 20 weeks. Generac is churning them out as fast as they can but demand had skyrocketed. Kohler and Cummins generators are experiencing the same pains.
JIT inventory is a 17ing PIA for all parties. It places stress on warehousing, procurement, supply chain, and very importantly- it places stress on vendors who also likely have some JIT processes too!
I have seen the rise of JIT over the last 13 years, basically ever since the crash of '08 since inventory reduction was a way for companies to free up cash and lower liability/waste.
There are obvious benefits to JIT, but damn its as if the drawbacks sometimes arent even considered when looking at supply chains from a high level.
I cant imagine the warehousing that would be needed if we hadnt moved to a more JIT system since as a country we are already imbalanced on the warehousing side.
No, I'm talking about making it more profitable to get off your *** and work instead of sitting on the couch. There's a reason every damn business you walk past has a help wanted sign in the window.
Massive shortage of raw materials right now…. polyurethane , resins, rubber, plastics…. Cost me some $$$ on my commissions this year. Also a lot small manufacturers that make components have disappeared along with their PPP money.
Ill repost...
I am smart enough to know I am not smart enough to know all the ways in which pay and covid affect job rates. It is something I wonder about quite frequently though, since basically every retail store, food chain, etc has 'now hiring' signs plastered on windows and walls.
Here in Iowa, the extended unemployment benefits ended back on June 12, so 2 months ago. Maybe there are now fewer vacant jobs overall, but it sure doesnt seem like anything is better now compared to back in May, which was before the extended benefits stopped. Big box retail is still woefully shortstaffed. Grocers are still woefully shortstaffed. Basically all other general retail is woefully shortstaffed. Some restaurants are only open a few days a week due to being shortstaffed. etc etc etc.\
People arent making equal or more than they did when they worked at this point, yet the labor shortage is still very real. An increase in labor cost would obviously help, but then the levels above entry pay would need to increase as well, and soon there isnt much of an effective net change.
Its all quite confusing since it doesnt follow the simple supply/demand concept.
Ridiculous demand has to fall to fix this too. People are like freed caged animals after the Covid lockdowns. The lockdowns created a portion of this. People are paying insane costs over value for things. An interest rate increase will help but not .25%. People with money are buying up things too. Properties around the beach or nice areas are being bought up, many times with cash. The "free" money is starting to fade some, & that helps unless we do this **** all over again to get the people hooked on that teet some more.
I will say again, most places are paying $15/hr minimum now. Many offering sign on bonuses. If people were working people, they'd be employed.
I will say again, most places are paying $15/hr minimum now. Many offering sign on bonuses. If people were working people, they'd be employed.
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I’m guessing here since I agree that it’s a bit baffling. But if you aren’t paying rent and haven’t burned through whatever else you are getting, then there isn’t a true need to go back to work. Most places here are paying at least 35-100% more at entry level than they were a year ago along with sign up bonuses and can’t attract anyone.
I don’t have a great answer because it doesn’t seem to make sense. I’m theory everyone working before should “need” to be working now.
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Don't do this. Don't act like this is one sided and is fully due to a transition at the executive level.
Examples can be given that legitimately show both parties hurting economic recovery, helping economic recovery, hurting the middle class, helping the middle class, etc etc.
Also, what good fortune are you talking about? Nothing in my post even suggests good fortune. All I listed are examples of chaos.
Not getting wrapped up in the glfrmthrfkr vortex. You know I'm right. So does everyone else here.
Not just encouraging vocational jobs, but make it more difficult to get to college. An 18 on the ACT should not get into a State university. You can barely be literate and make an 18. Remove the college pathway to people who will not benefit from it, increase the worth of a bachelor’s degree, and make it to where the people being told they are “Too good for Blue Collar Jobs” are usually actually halfway competent.
Does Nissan or Toyota have any trouble hiring people?
Seems they're able to get people to work in manufacturing.
Seems they're able to get people to work in manufacturing.
It’s not that “JIT=BAD” it’s just that “JIT=GOOD” isn’t strictly the case either.
JIT is here to stay as the default way to manage operations, but evaluation of risk to supply is going to be more important moving forward. Those fabricated parts from the shop down the road made with steel from Nucor; I can put those on JIT style replenishment. Those chips from Taiwan; maybe need to rethink how much inventory I hold for those.
We had a supplier of a small electronic chip quote us March. Of 2023. ~80 weeks lead time.
Normal for the chip was 6-8 weeks I believe.
PC boards are being redesigned to remove or change components. Margins are being squeezed because of paying more to jump line.
Normal for the chip was 6-8 weeks I believe.
PC boards are being redesigned to remove or change components. Margins are being squeezed because of paying more to jump line.
My lady friend had two workers quit yesterday because they refused to wear a mask at work. Nevermind it's a hospital. People are just stupid and sorry. They won't be eligible for unemployment and they gave up a job paying over $20/hr. It's not manual labor. It's a desk job. The "freedom entitled" are some of the dumbest SOBs I've ever seen. They think they can dictate the policy of their employer. Then you have the ones with a 3rd grade education that want $15/hr plus to flip a burger. But when it's offered, there's some other excuse. Basically they're ducking off the government teet and eating up our tax money. You can't fix stupid or sorry.
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Whatever you do, don't make it easy for them illegals to come over here and just go to workin in our plants and stuff.***
Same in MS. Federal stuff got cut off June 12th, but jobs still aren't being filled. I've wondered if this wholesale forced a lot of young people, who typically fill these jobs, back into their parent's homes and thus lowering their cost of living to a point that they don't need the job, maybe went back to school virtually and aren't going to re-enter the labor force. The post pandemic economic studies will be very interesting. I can't wait for Freakonomics to hit a few episodes about it.
Nissan doesn’t have much problem hiring line workers. Where they have problems is hiring skilled tradesmen such as Maintenance Technicians or Robotics Techs. All skilled trades are in high demand.
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Agree. I imagine the real deadbeats always find a way to be deadbeats with, or without, federal help.
Until "burger flipping" becomes totally mechanized. Just watch, when the catfish industry was getting started nobody ever dreamed you could skin and fillet a catfish mechanically....but guess what.
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