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Comment by csours | Hacker News Reader

Disclosure: I work for GM, what follows is solely my own opinion and perception of reality.

On #1 also bear in mind that the supply chain is deep and complicated. OEM (GM, Toyota, Tesla, Ford etc) orders a number of COMPONENT X that contains a chip from a Tier 1 supplier. Tier 1 supplier order subcomponents from other suppliers. (Continue this until you have built a very confusing interdependent supply web).

At any level of this, anyone could have (and did) cancel their orders in 2020. As in OEMs cancelled some orders, Tier 1 suppliers cancelled some orders, Tier X suppliers cancelled some orders, etc.

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Also known as the “bullwhip effect”:

https://en.m.wikipedia.org/wiki/Bullwhip_effect

And: https://en.wikipedia.org/wiki/Beer_distribution_game

I was very disappointed that the Beer distribution game, as described in the Wikipedia article anyway, is not a drinking game.

Not with that attitude it isn't!

How else do we simulate shrinkage in the supply chain?

> Continue this until you have built a very confusing interdependent supply web

I like to say that reality cannot be reduced to a single variable. It is a complex multivariate problem.

Most reporting out there on any subject reduces that being reported to a single variable. Example: Container shortage > bad > supply chain crunch. Etc.

The overwhelming majority of people have no practical understanding of business and, in particular, manufacturing. The complexities involved --the variables-- do not exist in their realities. What you explain about the supply chain is a revelation to almost everyone reading it. Even with this, reality is far more complex than what any of us can explain in a couple of paragraphs.

I have lived through a couple serious supply chain issues in the last several decades. This one is a bit different because almost everything in technology products is affected. It's one thing to re-spin a design because one chip becomes 60-week unobtainum, quite another when you can't get 75% of the BOM for 40 weeks.

> Example: Container shortage > bad > supply chain crunch. Etc.

One thing I learned working in manufacturing is to think about movement and management of empty carriers. If you fill something, it will be empty at some point and it doesn't just disappear. You have to get it back to where you fill it again.

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