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The captain of a large cargo vessel has a great video explaining the various roots of the issues Hans has with getting the parts he needs. This comment about the high-tech industry is particularly relevant. 4:26 "... delicately balanced supply chain ..." What you should have said is "a perilously stretched supply chain that had no contingency plans." I have worked in the high-tech supply chain discipline for almost 15 years, and top management has refused to listen to warnings or do any risk planning for longer than I've been in it. Everything has been leaned out to the max, to maximize profits and bonuses. Now the economy and consumers are paying the price, while the execs who put us here are sitting on piles of cash.
When a system of trade is already being pushed to its limits by a desire to maximize profits with a just-in-time inventory, it has no reserves to call on when a crisis develops. We¡¯ve had several major ones in the last couple of years. The troubles then feed on one another. Those 70+ ships sitting at anchor off LA and San Diego aren¡¯t available to ship other cargos between other ports in other countries. Interestingly, I¡¯ve not noticed any increased delays in the orders I¡¯ve made from China to ready for the arrival of that QCX mini. The last of them, an iambic key, should arrive today. They take several weeks to arrive just like before but not more weeks. Of course, what I was ordering was small and seems to have gone space available on cargo aircraft. The package may sit a week or so waiting for a flight out, but it¡¯s not on a ship waiting at anchor for weeks like larger cargos. ¡ªMike Perry, WA4MP
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Hi Mike
It is not just profit-driven. We have seen decades of a relentless drive to make everything cheaper. Profit = Revenue - costs. The consumer pushes revenue down and the manufacturer has to push costs down or get squeezed out. The delicate situation arises. I think it may be a bit harsh to say that consumers (ordinary folk like you and me) demand lower and lower prices. But the global system is set up in such a way that this result naturally arises.?
One can theorize about the global semiconductor shortage. Factory closures, workforce shortages, logistics problems, Covid19-driven lapse in demand then back with a vengeance 6 months later, work-from-home demand for tech goods etc etc. But in the end we can see similar issues in other areas too. Look at the recurring toilet roll crises (among other common household items). Empty supermarket shelves. Though there was never any shortage of toilet rolls (no supply issues), nor was there a sudden extra demand caused by any particular need for the cleaning of the human posterior to be required much more frequently. Just panic, human emotion. Scaled up, that's also a factor in the chip shortage.?
I myself am guilty of it too. When I heard of the shortages I immediately bought 4,000 Si5351A from Digikey and Arrow which cleaned out their entire stock. Normally I'd only buy them by the reel (2,500), one reel at a time, when I needed them. Not 4,000 in one go even when I still had a partial reel left. At the same time I bought 2,500 ATMega328, these were also unobtainable for a few months. It was a temporary investment for me as long as I believe I will use the chips up... and it did mean I could continue QCX-mini and QCX+ production without interruption, throughout the last 2 years. From my point of view as a manufacturer, it made sense for business continuity. But if every manufacturer got scared and did the same thing, which they did, you see what happens.?
I don't think there's any great conspiracy or powerful forces directing it - but this is just the way the world system has been evolving. Thousands of individual decisions that make sense on a micro level, add up to make big consequences.?
73 Hans G0UPL
On Mon, Nov 8, 2021 at 5:31 PM Mike Perry, WA4MP < editor@...> wrote: The captain of a large cargo vessel has a great video explaining the various roots of the issues Hans has with getting the parts he needs. This comment about the high-tech industry is particularly relevant.
> 4:26 "... delicately balanced supply chain ..."? What you should have said is "a perilously stretched supply chain that had no contingency plans." I have worked in the high-tech supply chain discipline for almost 15 years, and top management has refused to listen to warnings or do any risk planning for longer than I've been in it. Everything has been leaned out to the max, to maximize profits and bonuses. Now the economy and consumers are paying the price, while the execs who put us here are sitting on piles of cash.
>
When a system of trade is already being pushed to its limits by a desire to maximize profits with a just-in-time inventory, it has no reserves to call on when a crisis develops. We¡¯ve had several major ones in the last couple of years. The troubles then feed on one another. Those 70+ ships sitting at anchor off LA and San Diego aren¡¯t available to ship other cargos between other ports in other countries.
Interestingly, I¡¯ve not noticed any increased delays in the orders I¡¯ve made from China to ready for the arrival of that QCX mini. The last of them, an iambic key, should arrive today. They take several weeks to arrive just like before but not more weeks. Of course, what I was ordering was small and seems to have gone space available on cargo aircraft. The package may sit a week or so waiting for a flight out, but it¡¯s not on a ship waiting at anchor for weeks like larger cargos.
¡ªMike Perry, WA4MP
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I don't think there's any great conspiracy or powerful forces directing it - but this is just the way the world system has been evolving. Thousands of individual decisions that make sense on a micro level, add up to make big consequences. Quite right. I try not to ascribe to conspiracy anything that could be the result of stupidity. I once saw a cartoon that was all too apt. ¡°Be proud of your stupidity,¡± it said. ¡°It¡¯s what separates us from the animals." For years I¡¯ve been warning Apple on Mac news sites not to do so much single sourcing, particularly in China. Always have several sources even if some cost more, I stressed. Recently, Apple announced that it would lose $8 billion dollars due to supply chain issues. I feel like I should bill them for business advice not taken. And those California ports are jammed in part because the state¡¯s politicians stupidly passed a law that means that few trucks older than three years meet the pollution standards. Long-distance truckers, with more business than they can handle anyway, simply avoid trips into and out of the state. Politicians make one decision, thousands of truckers respond with another. No conspiracy. Just stupidity followed by a predictable and reasonable response. Truckers know trucking. Politicians do not. ¡ªMike Perry, WA4MP
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Well, it?reminds me of my favourite "Snatch" movie line... "Never underestimate the predictability of stupidity".?
73 Hans G0UPL
On Mon, Nov 8, 2021 at 6:17 PM Mike Perry, WA4MP < editor@...> wrote:
> I don't think there's any great conspiracy or powerful forces directing it - but this is just the way the world system has been evolving. Thousands of individual decisions that make sense on a micro level, add up to make big consequences.
Quite right. I try not to ascribe to conspiracy anything that could be the result of stupidity. I once saw a cartoon that was all too apt. ¡°Be proud of your stupidity,¡± it said. ¡°It¡¯s what separates us from the animals."
For years I¡¯ve been warning Apple on Mac news sites not to do so much single sourcing, particularly in China. Always have several sources even if some cost more, I stressed. Recently, Apple announced that it would lose $8 billion dollars due to supply chain issues. I feel like I should bill them for business advice not taken.
And those California ports are jammed in part because the state¡¯s politicians stupidly passed a law that means that few trucks older than three years meet the pollution standards. Long-distance truckers, with more business than they can handle anyway, simply avoid trips into and out of the state. Politicians make one decision, thousands of truckers respond with another. No conspiracy. Just stupidity followed by a predictable and reasonable response. Truckers know trucking. Politicians do not.
¡ªMike Perry, WA4MP
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A friend of mine is a Technical Marketing Engineer for Microchip for one of their uController lines. He has told me numerous times that every month they could sell twice what they produce and they are running flat out full capacity. He thinks that his customers are suffering from the toilet paper syndrome....
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Reminds me of the joke about the gentleman who invested all his money in toilet paper and revolving doors. He was wiped out before he could turn around................
Lee KX4TT
On Monday, 8 November 2021, 10:41:38 am GMT-5, Mike - N5AQM <n5aqmdb@...> wrote:
A friend of mine is a Technical Marketing Engineer for Microchip for one of their uController lines. He has told me numerous times that every month they could sell twice what they produce and they are running flat out full capacity. He thinks that his customers are suffering from the toilet paper syndrome....
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On Mon, Nov 8, 2021 at 02:29 PM, Mike Perry, WA4MP wrote:
The captain of a large cargo vessel has a great video explaining the various roots of the issues Hans has with getting the parts he needs.
He is actually the chief engineer. I was an engineering officer in the merchant navy and we were all more important than the captain and other deck officers. They were just the engineers "look outs" who tried not to bump into anything while we conveyed them from port to port. Fortunately I left just as container ships were starting to appear. We used to spend a week or ten days at a time in port while loading and unloading. That meant plenty of time to go ashore. Next time you are on a ship, maybe a cruise ship, endear yourself to the captain and other deck officers by stating that you know they are actually just the engineers lookouts. Seriously... ?? the chief or second engineer on a merchant ship could leave and get nearly any (highly paid ) job ashore, such is there qualifications. Reg?????????????? G4NFR ? ?
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I think it's the "just-in-time" inventory thought process that puzzles me as an economist the most. I can understand skimping on inventory during the Carter years when the prime interest rate was 21%, but when real interest rates are near 0 and there's a known risk of getting caught with your pants down, I don't understand why "the Big Three" and others (e.g., Elecraft) didn't stockpile key components like Hans did. I find this even more puzzling with components where second sources seem slim.
Yeah, I realize it's easy to use 20-20 hindsight, but still...
Jack, W8TEE
On Monday, November 8, 2021, 09:30:38 AM EST, Mike Perry, WA4MP <editor@...> wrote:
The captain of a large cargo vessel has a great video explaining the various roots of the issues Hans has with getting the parts he needs. This comment about the high-tech industry is particularly relevant.
> 4:26 "... delicately balanced supply chain ..."? What you should have said is "a perilously stretched supply chain that had no contingency plans." I have worked in the high-tech supply chain discipline for almost 15 years, and top management has refused to listen to warnings or do any risk planning for longer than I've been in it. Everything has been leaned out to the max, to maximize profits and bonuses. Now the economy and consumers are paying the price, while the execs who put us here are sitting on piles of cash.
>
When a system of trade is already being pushed to its limits by a desire to maximize profits with a just-in-time inventory, it has no reserves to call on when a crisis develops. We¡¯ve had several major ones in the last couple of years. The troubles then feed on one another. Those 70+ ships sitting at anchor off LA and San Diego aren¡¯t available to ship other cargos between other ports in other countries.
Interestingly, I¡¯ve not noticed any increased delays in the orders I¡¯ve made from China to ready for the arrival of that QCX mini. The last of them, an iambic key, should arrive today. They take several weeks to arrive just like before but not more weeks. Of course, what I was ordering was small and seems to have gone space available on cargo aircraft. The package may sit a week or so waiting for a flight out, but it¡¯s not on a ship waiting at anchor for weeks like larger cargos.
¡ªMike Perry, WA4MP
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There's something like the 'law of unintended consequences'. You do one thing that makes sense and all sorts of things happen that you didn't expect.?
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73, Dan? NM3A
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Love that movie!
Roy WA0YMH
Well, it?reminds me of my favourite "Snatch" movie line... "Never underestimate the predictability of stupidity".?
73 Hans G0UPL
On Mon, Nov 8, 2021 at 6:17 PM Mike Perry, WA4MP < editor@...> wrote:
> I don't think there's any great conspiracy or powerful forces directing it - but this is just the way the world system has been evolving. Thousands of individual decisions that make sense on a micro level, add up to make big consequences.
Quite right. I try not to ascribe to conspiracy anything that could be the result of stupidity. I once saw a cartoon that was all too apt. ¡°Be proud of your stupidity,¡± it said. ¡°It¡¯s what separates us from the animals."
For years I¡¯ve been warning Apple on Mac news sites not to do so much single sourcing, particularly in China. Always have several sources even if some cost more, I stressed. Recently, Apple announced that it would lose $8 billion dollars due to supply chain issues. I feel like I should bill them for business advice not taken.
And those California ports are jammed in part because the state¡¯s politicians stupidly passed a law that means that few trucks older than three years meet the pollution standards. Long-distance truckers, with more business than they can handle anyway, simply avoid trips into and out of the state. Politicians make one decision, thousands of truckers respond with another. No conspiracy. Just stupidity followed by a predictable and reasonable response. Truckers know trucking. Politicians do not.
¡ªMike Perry, WA4MP
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A cutting edge chip fab can cost more than $8 billion.
Stockpiling inventory doesn't always make sense if your product is subject to frequent changes.
Ports are jammed because of at least a half dozen different reasons these days.
It's a complicated world out there.
Jerry, KE7ER
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Show quoted text
On Mon, Nov 8, 2021 at 07:17 AM, Mike Perry, WA4MP wrote:
For years I¡¯ve been warning Apple on Mac news sites not to do so much single sourcing, particularly in China. Always have several sources even if some cost more, I stressed. Recently, Apple announced that it would lose $8 billion dollars due to supply chain issues. I feel like I should bill them for business advice not taken.
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I myself am guilty of it too. When I heard of the shortages I immediately bought 4,000 Si5351A from Digikey and Arrow which cleaned out their entire stock.?
Bigger, less frequent orders are a long term solution anyway, even if they exacerbate current shortages. The logistics are much more efficient. You did what most should have been doing all along.
Or we could just blame local pollution standards. Imagine living in a world with such simplistic boogymen.
?
On Mon, Nov 8, 2021 at 5:31 PM Mike Perry, WA4MP < editor@...> wrote: The captain of a large cargo vessel has a great video explaining the various roots of the issues Hans has with getting the parts he needs. This comment about the high-tech industry is particularly relevant.
> 4:26 "... delicately balanced supply chain ..."? What you should have said is "a perilously stretched supply chain that had no contingency plans." I have worked in the high-tech supply chain discipline for almost 15 years, and top management has refused to listen to warnings or do any risk planning for longer than I've been in it. Everything has been leaned out to the max, to maximize profits and bonuses. Now the economy and consumers are paying the price, while the execs who put us here are sitting on piles of cash.
>
When a system of trade is already being pushed to its limits by a desire to maximize profits with a just-in-time inventory, it has no reserves to call on when a crisis develops. We¡¯ve had several major ones in the last couple of years. The troubles then feed on one another. Those 70+ ships sitting at anchor off LA and San Diego aren¡¯t available to ship other cargos between other ports in other countries.
Interestingly, I¡¯ve not noticed any increased delays in the orders I¡¯ve made from China to ready for the arrival of that QCX mini. The last of them, an iambic key, should arrive today. They take several weeks to arrive just like before but not more weeks. Of course, what I was ordering was small and seems to have gone space available on cargo aircraft. The package may sit a week or so waiting for a flight out, but it¡¯s not on a ship waiting at anchor for weeks like larger cargos.
¡ªMike Perry, WA4MP
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Mike Perry, WA4MP
Lee
jjpurdum