Trade, Manufacturing and Critical Supply Chains: Lessons from COVID-19
WM,Trade: Trade, Manufacturing and Critical Supply Chains: Lessons from COVID-19, July 23, 2020
Finance: Part 2: Protecting the Reliability of the U.S. Medical Supply Chain During the COVID-19 Pandemic, July 30, 2020
Additional Testimony to Finance:
I also omitted my comments about Hyperstagflation. I see from the Senate version of the draft bill that our views and those of the majority are the same, although $100 is a bit too low. May I suggest $350, which is a good halfway point and leaves worker with $800 a week total. Rent will get paid and food will be bought.
The irony is that I tested positive for PAN-SARS yesterday, although I had the severe version of the virus. We shall see if this is a false positive or, worse, it can be extreme twice. May I suggest a panel of COVID patients to relate their experiences. This is also relevant because it goes to the quality of testing. If the false positive rate for tests is too high, we may have less documented cases than we know, at the same time that we have a much greater number of real cases, like mine, where medical attention was not sought because there were no serious SARS symptoms. Many have had only the cold, the latent contagious stage and the non-contagious fatigue stage where we manufacture immunity (which my blood test yesterday did not detect).
More to the point, many manufacturing workers, including those in the medical supply system, have likely tested positive but may not have actually been sick, while others are never tested but are among the walking wounded – although, as I say below – no one can work with extreme fatigue symptoms, which is a concern as to the welfare of undocumented workers who likely don’t have the luxury of sick leave benefits. This worker illness and the related shutdown will impact medical suppliers in the United States in areas where the virus is active, which means the entire South and West, with the Midwest being the next on deck. Repeated material follows:
This testimony relies on my experience as a member of the Cost Management Systems project of what was then called Computer-Aided Manufacturing – International, now the Consortium for Advanced Management – International. The project produced Cost Management for Today’s Advanced Manufacturing. I created a handbook based on the project, the U.S. Air Force Orientation Guide to Advanced Cost Management.
One of the topics addressed is the manufacturing environment known as Process Simplification, which features Just in Time supply chains. This model works for Wal-Mart, which is massively integrated, and for defense production. Parts arrive with little holding time and go right out the door. If everyone is working in the supply chain, it works beautifully. Commercially, it is essentially a rationalized production line from resource extraction to delivery.
As long as the line is not stopped, it minimizes waste and non-value-added cost. It doubles down on traditional manufacturing’s stance of labor being a cog in the machine. Unionization is not compatible with it unless they have incentives to keep things moving (like in the defense sector, which requires cleared and more specialized workers).
Recent reported experience on Midwest food production has workers being made to work sick, or after exposure. The CDC model has been flawed, but they have finally added a runny nose to the list of symptoms (as I predicted they must, having had the virus myself). The virus has not been contained, not through lack of correct distancing but because the economy was closed in areas where it had not arrived, which meant reopening just as it has gone from early exposure to full-on illness. Because nasal symptoms were discounted, people likely transmitted in private settings, with transmitters not knowing their sneezes were potentially deadly and not hay fever.
Testing positive for exposure means someone sneezed. Not knowing that this is the trigger means workers were idled (or not idled) at the wrong time. There is no danger that workers with SARS or fatigue symptoms will keep working. It is impossible to do so. If they do not have sick leave, the results could be tragic. Undocumented workers have even more dire consequences in their personal supply chain, which includes remittances and cramped living conditions that ensure virus transmission. The attached table shows how states will be affected under current policy.
At this stage of the pandemic, the assembly line is about to crash. A new round of mandated closings is inevitable unless mandate quarantine to the period from the first sniffle to three weeks after they stop for everyone in the household. Unless there is significant cross training already in place, the supply of goods will begin to diminish.
There is simply no stock of inventory to rely on in this model. Farmers will again be overwhelmed with unsold food that they will not able to move. It will be worse in this round unless courageous action is taken on personal quarantine and in the CDC’s understanding and guidance of how the virus spreads and does not spread. I doubt that the medical hierarchy has it in them.
Ways and Means Only:
On the economic side, another round of stimulus will be necessary to keep people afloat, although too much money will simply produce not only inflation, but stagflation – even HYPERSTAGFLATION. Cutting the unemployment bump to $300 per week will help keep this in check. Again, simply letting aid expire would be worse.
An increased level of benefits for the poor, disabled and retired would help we retirees keep pace as prices rise. Stimulus checks are spent too fast, while higher income decreases uncertainly for what could be a long journey.
Supply chains are global and many nations who have controlled the virus by shutting down the economy rather than tailored quarantines will quickly find that many with less robust immune systems will get very sick when it opens. There will be a second wave in these nations, and a third, and a fourth. The supply chain will be stressed, if not stopped, even if draconian openings and closings can be imposed in China.
Draconian measures may be efficient, but they may add a different kind of fever, one that the regime will likely underestimate. Revolution kills production lines once people have too much. China, Inc. may not be as efficient a partner in a post-revolutionary future. Workers with more freedom to bargain and vote will want more stuff, which means higher prices here. Higher prices mean higher wages will be required, but jobs will come back as the economy changes.
Current trade policy is the wrong way to go about long-term change, especially when led by an irresponsible actor. Let me restate what we have previously written:
Trade negotiations with China ... have taken on the character of economic gunboat diplomacy, but without the Navy. These occur because the President is ill equipped by his background as a businessman to work cooperatively, which is the essence of governance in a free society. He has a freer hand in trade negotiations. Sadly, his experience as a CEO has not served the nation well. The modus operandi of most executives is to break things in order to be seen fixing them. This must stop. The public is not amused, including the Chamber of Commerce, farmers and the stock and commodity markets.
Today's witness is not likely to say his boss is a vainglorious idiot, so allow me to. It is well known that in this Administration, professional diplomatic expertise is not valued. Mr. Trump prefers to shoot from the lip. The incompetence of this president is tragic for our ongoing trade policy, which relies on a high degree of professionalism and careful work over a period of several administrations.
Finance: Part 2: Protecting the Reliability of the U.S. Medical Supply Chain During the COVID-19 Pandemic, July 30, 2020
Additional Testimony to Finance:
I also omitted my comments about Hyperstagflation. I see from the Senate version of the draft bill that our views and those of the majority are the same, although $100 is a bit too low. May I suggest $350, which is a good halfway point and leaves worker with $800 a week total. Rent will get paid and food will be bought.
More to the point, many manufacturing workers, including those in the medical supply system, have likely tested positive but may not have actually been sick, while others are never tested but are among the walking wounded – although, as I say below – no one can work with extreme fatigue symptoms, which is a concern as to the welfare of undocumented workers who likely don’t have the luxury of sick leave benefits. This worker illness and the related shutdown will impact medical suppliers in the United States in areas where the virus is active, which means the entire South and West, with the Midwest being the next on deck. Repeated material follows:
One of the topics addressed is the manufacturing environment known as Process Simplification, which features Just in Time supply chains. This model works for Wal-Mart, which is massively integrated, and for defense production. Parts arrive with little holding time and go right out the door. If everyone is working in the supply chain, it works beautifully. Commercially, it is essentially a rationalized production line from resource extraction to delivery.
As long as the line is not stopped, it minimizes waste and non-value-added cost. It doubles down on traditional manufacturing’s stance of labor being a cog in the machine. Unionization is not compatible with it unless they have incentives to keep things moving (like in the defense sector, which requires cleared and more specialized workers).
Recent reported experience on Midwest food production has workers being made to work sick, or after exposure. The CDC model has been flawed, but they have finally added a runny nose to the list of symptoms (as I predicted they must, having had the virus myself). The virus has not been contained, not through lack of correct distancing but because the economy was closed in areas where it had not arrived, which meant reopening just as it has gone from early exposure to full-on illness. Because nasal symptoms were discounted, people likely transmitted in private settings, with transmitters not knowing their sneezes were potentially deadly and not hay fever.
Testing positive for exposure means someone sneezed. Not knowing that this is the trigger means workers were idled (or not idled) at the wrong time. There is no danger that workers with SARS or fatigue symptoms will keep working. It is impossible to do so. If they do not have sick leave, the results could be tragic. Undocumented workers have even more dire consequences in their personal supply chain, which includes remittances and cramped living conditions that ensure virus transmission. The attached table shows how states will be affected under current policy.
At this stage of the pandemic, the assembly line is about to crash. A new round of mandated closings is inevitable unless mandate quarantine to the period from the first sniffle to three weeks after they stop for everyone in the household. Unless there is significant cross training already in place, the supply of goods will begin to diminish.
There is simply no stock of inventory to rely on in this model. Farmers will again be overwhelmed with unsold food that they will not able to move. It will be worse in this round unless courageous action is taken on personal quarantine and in the CDC’s understanding and guidance of how the virus spreads and does not spread. I doubt that the medical hierarchy has it in them.
Ways and Means Only:
On the economic side, another round of stimulus will be necessary to keep people afloat, although too much money will simply produce not only inflation, but stagflation – even HYPERSTAGFLATION. Cutting the unemployment bump to $300 per week will help keep this in check. Again, simply letting aid expire would be worse.
An increased level of benefits for the poor, disabled and retired would help we retirees keep pace as prices rise. Stimulus checks are spent too fast, while higher income decreases uncertainly for what could be a long journey.
Supply chains are global and many nations who have controlled the virus by shutting down the economy rather than tailored quarantines will quickly find that many with less robust immune systems will get very sick when it opens. There will be a second wave in these nations, and a third, and a fourth. The supply chain will be stressed, if not stopped, even if draconian openings and closings can be imposed in China.
Draconian measures may be efficient, but they may add a different kind of fever, one that the regime will likely underestimate. Revolution kills production lines once people have too much. China, Inc. may not be as efficient a partner in a post-revolutionary future. Workers with more freedom to bargain and vote will want more stuff, which means higher prices here. Higher prices mean higher wages will be required, but jobs will come back as the economy changes.
Current trade policy is the wrong way to go about long-term change, especially when led by an irresponsible actor. Let me restate what we have previously written:
Trade negotiations with China ... have taken on the character of economic gunboat diplomacy, but without the Navy. These occur because the President is ill equipped by his background as a businessman to work cooperatively, which is the essence of governance in a free society. He has a freer hand in trade negotiations. Sadly, his experience as a CEO has not served the nation well. The modus operandi of most executives is to break things in order to be seen fixing them. This must stop. The public is not amused, including the Chamber of Commerce, farmers and the stock and commodity markets.
Today's witness is not likely to say his boss is a vainglorious idiot, so allow me to. It is well known that in this Administration, professional diplomatic expertise is not valued. Mr. Trump prefers to shoot from the lip. The incompetence of this president is tragic for our ongoing trade policy, which relies on a high degree of professionalism and careful work over a period of several administrations.
posted by Michael Bindner at 2:00 PM
0 Comments:
Post a Comment
<< Home