The Supply Chain Collapse Part One

A bit of professional background on me. In addition to being a doomsday prepper I have also spent many years working within the United States supply chain. I worked for a time up until early 2020 at the Fastenal Company, one of the largest industrial supply companies in the world. In that role and others that followed I worked directly in terms on supply, sourcing, purchasing, inventory management, just in time delivery, vendor managed inventory.... I could go on but in every meaningful way, I worked deeply with this countries supply chain.

I also had a very broad expedience. I have worked in such a supply capacity with just about every vertical industry and type of business in the united states. I have worked with highest C-Level Executives, to Joe the maintenance guy, to Larry the construction worker, Public utilities, Farms, service, manufacturing, nonprofit, you name it! My point is I have been deeply entreched in the supply chain my entire career and I know how it works and what it needs to operate correctly. Newsflash, it is not operating correctly.

What is the heart of the issue?

Well for me it is clear and simple. Globalization of the supply chain and outsourcing of our supply chain. Here is the dirty little secret they do not want you to know. "Made in America" does not mean what you think it does! No let us set aside what we all know about things made oversees and then a couple stickers and screws are applied turning it into "made in America" or "Assembled in USA". Let us set the big lie of that aside because it is a bigger lie than that. Literally nothing we produce in the US is an island. Not even our farms! Especially not our food processing facilities or our trucking fleets or our utility parts supply chain.

In every way the United states is not capable of producing, anything at all from overseas manufactured components.

Let us take a hypothetical widget, this widget is a plate of American mined and refined steel with four holes drilled in it. When sold it has a huge "Proudly Made in America" sticker on it.

Except it really wasn't.

The raw material, iron, carbon etc that may have been mined from American soil (may have) yet it was done so with overseas equipment or at minimal, overseas components in or maintaining said equipment. This means the first step of extracting the iron from the ground cannot be maintained without Chinese goods.

We cannot build nor operate any factory period without overseas materials and components. This means we cannot start from scratch, we need China or similar to supply us in a massive amount over a long period of time to build the means to be self sufficient. We need to build the factories to make the everything we use to make the everything else. We need factors making every type of OEM fastener(nuts and bolts) computer chip, chemical, the list goes on. We could have done this a long time ago.

It is too late now. I do not believe we have the time nor the will to transform into a more self sufficient supply chain.

Globalization is the problem. Ironically it is also how the virus was able to spread so unhindered. So much trade justified so much travel at such an uncertain time right?

We have a back up of cargo ships at the ports right now. That is one small sign of a larger issue. Why do we rely so heavily on ports at all to bring things in? Why do we simplify not produce more here? We know the reason why and it is very depressing.

Near-Slave Labor is far too profitable. We sacrificed our self reliance and in a big way our national security for the sake of high cooperate profits and less jobs for you and me, but hey at least we can get a TV pretty cheap. Hint, TVs or similar household items did in fact used to be affordable before they outsourced manufacturing, reduced the quality, quantity, longevity, function, form, and raised the price every year since 1975. Yea there may be some ripples, flat screen TVs are a new technology so they are super pricey then they start to go down over time the consumer things that things are looking great, prices are going down right? That is because enough time has passed that the new technology has been manufactured at scale enough to bring costs down. It is called economies of scale. Things are cheaper to make the more you make of them so an item that focuses on an expensive new technology will become less and less expensive as it increases in markets are. simply because they are producing more they are able to produce at scale for a lower cost.

The thing that really is starting to change things now is the transportation cost. It has gone up a huge amount and continues to skyrocket. There will be a threshold where extreme transportation costs outweigh the labor savings and the jobs come back. The problem is, things are still way more expensive because of the still high transportation costs so even though jobs are coming back inflation will leave those jobs undesirable.

All of that to say, and believe me I could go on and on about the topic, but I believe if we shrank and diversified our supply chains as much as possible then we may very well be able to survive or rather avoid a supply chain collapse.

Too Little Too Late. Don't Make the Same Mistakes Next Time.