Supply chain woes

I get so many comments from customers at work who don’t understand why the supply chain broke the way it did. In addition I see ALOT of comments online in the same vein.

I’ve been slowly trying to come up with an analogy that explains it, but there’s no short explanation. The answer is complicated no matter what. But here’s my best try so far. Note, all numbers and many of the dates used here are made up. In some cases it’s because I don’t know the exact numbers. In others its because I DO know, but that info is likely proprietary to my job. And regardless nice round numbers are easier to work with when typing up examples.

So, I work at a local Home Depot. Lets say that in March of 2020 we’d JUST gotten in our first shipment of lawnmowers. Lets say that shipment is a grand total of 50 mowers. And that 50 mowers was expected to last us till the end of April. Instead the shutdown hit, and that 50 mowers were sold out before April 1.

So the store calls the warehouse and says that not only do we need another 50 lawnmowers a month early, we want you to ship us an additional 50 cause holy crap sales!! (ok, this is all automated, but work with me here)

The warehouse says holy crap! I can send you another 50, but we weren’t expecting you to need them for another month, so I REALLY don’t have that extra 50. I’ll see what I can get! The warehouse ordering person calls the manufacturer (again, this is all automated in RL) and says sales are through the roof, we need to at least double our order!

The manufacturer says I’d love to double your order, but we’re not an essential business so you’re out of luck till we’re allowed to run again.

So two months later, the stores and warehouses are all sold out of lawnmowers and the manufacturer is finally allowed to start running their lines again, but they have to do it with extra social distancing, which means at a slower pace, and they’re at risk for being shut down every time someone tests positive, but at least they can start building lawnmowers!

Except that they only have enough of the various parts on hand to build the originally expected orders of lawnmowers, not this more than doubled sales orders of lawnmowers. So they start making what they can, and in the mean time they call the parts manufacturers and say Hey! We need to at least double our orders!!

The parts manufacturers look at their supply of raw materials and say well, we have enough on hand to make up the parts for the originally expected orders, but we don’t have enough to do double, much less more than double! Plus we’re at risk of the same slowdowns/shut downs you are, but we’ll do our best! And THEY call the raw materials peoples and say hey! We need to at least double our orders!

And the raw materials peoples say geez people, we haven’t been able to mine the raw materials in 3 months! I don’t have it! And we’re at risk of the same shutdowns and slow downs you are, but we’ll do our best!

Meanwhile the store is sold out of lawnmowers again, and the manufacturers are dribbling them in because holy shit no one predicted anything like this mess.

And the orders just keep rolling in.

And the transport between raw material people, to the parts manufacturer, is clogged all to hell, cause covid, and restrictions, and no one expected to have to ship double the number of containers with no warning.

And the orders keep coming.

And the raw materials finally make it to the parts manufacturers, who rush to make the parts, and then the transport between parts manufacturers gets clogged, because now we’re not only running double the containers of raw materials but we’re running double the containers of parts, all with no warning.

And the orders just keep coming.

The parts finally make it to the machine manufacturing line, and they rush to build the actual mowers. And now the transport from them to the warehouse is clogged and backlogged all to hell, cause now we’re running double containers of raw materials, parts, AND finished machines and holy shit we don’t have that many drivers, much less chassis to put the containers on!

And the orders just keep on coming.

AND all those mowers still need to get from the warehouse to the store, with is yet ANOTHER layer of transport doubling.

And by this time the orders have continued to the point where we need to actually TRIPLE our order back here at the store. And we’re not sure THAT’S going to be enough. So go back to the beginning of this and substitute “triple” for all the word “double”.

And then do it again for the word quadruple.

Now do the same math for something like half the products that a store like Home Depot sells.

And multiply by the number of stores that Home Depot has around the country.

And multiply again by all the other stores LIKE Home Depot who found themselves stuck in the same holding pattern.

Add in that the internal USA materials transport system has been running a bit short since well before 2020 for a variety of reasons including the generalized panic over air pollution from the trucks and lack of drivers and constant added restrictions from states, counties, and towns.

Add in that when Covid hit the media did their damndest to panic the world into refusing to work and hide at home. And then the .GOV paid them MORE to stay at home than to work.

And the ones who did work found themselves burning out at an even faster rate than normal. AND not receiving that additional pay that the folks sitting at home were getting. AND doing so while dealing with the same materials shortages that everyone else was dealing with.

And the orders just keep rolling in.

And now we’re short on the parts needed to FIX the trucks and chassis and keep them on the road.

And the costs for the parts we do have keep going up.

And the manufacturers also have to have parts to keep THEIR machines going.

And people are still ordering and ordering and ordering.

This is so over simplified its not even funny, and I KNOW I’m missing out on all sorts of aspects. There’s bottlenecks all along the transport lines for various things. The ships backing up at cargo points is the one currently making news, but keep in mind it’s not JUST a matter of getting all those ships unloaded. Those containers have to go somewhere, and the ports can only hold so many at a time. And while huge portions of that process is automated you still have to have people to keep an eye on the machines. And chassis to put the containers on, and trains and trucks and machinery all need parts to run.

And people won’t stop ordering more things.

I keep seeing people saying that “if we made more things here in the USA we wouldn’t be in this problem!!!”, and while I agree with the underlying concept its not realistic. First of all a huge portion of the raw materials have to come from overseas no matter what, unless we want to open up ALOT of mines here in the USA, and trust me, you don’t want to (plus there’s things we can’t mine here, so yah). So there would still be international transport bottlenecks. Second, we shut down EVERYTHING that the various politicians decided wasn’t “essential” for 3 months. And since politicians are idiots their definition of “essential” had no bearing on reality. Plus the US public is madly materials oriented, I don’t think we could have enough internal manufacturing to keep up with demand these days. I really don’t.

3 thoughts on “Supply chain woes”

  1. Yeah, unfortunately a lot of people have lost their objectivity when looking at container ships sitting out there as well as shortages of everything.

    I don’t even bother trying to educate people about the things they post any more like: the administration is keeping the ships from unloading because conspiracy; if everything were made in USA there wouldn’t be any issues – etc.

    Reply
    • As a retired engineer that worked in the mining of various high demand metals, I will put in a few remarks that probably won’t sit with well. Suffice to say everyone wants the cream but no one wants to haul the manure. The case I was involved with was permitting a small mine producing several metals in high demand by the electronics industry. I had cleared state permitting and was ready to present to the federal agency. At the first meeting I was told bluntly by the district head that she would never permit any mine in her district, no matter the need for the product ever. With attitudes such as this which is not uncommon in the ranks of Federal agencies the and now, is it any wonder we are in the staits we experience presently.

      Reply
      • that too. Alot of the stuff we need, both raw materials and various parts and chemicals, all require some potentially very hazardous processes and materials and no one wants that nearby.

        Reply

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