Brexit the economy and house prices part 6

Gangaweed

Crashy_Time wrote: »

It doesn`t matter, the EU is doomed anyway! That is the beauty and comedy of watching Brussels and one of their satellite governments pretend to go "head to head" :rotfl: There will be serious political repercussions in the UK if we don`t leave however...

I think there will be serious repercussions either way. Democracy has been damaged irrespective of what happens.

buglawton

Zero_Gravitas wrote: »

Please can you provide some actual, real examples of JIT supply chains operating across continents in the way that you describe, and how these examples have mitigated the risks involved?

http://nautil.us/issue/29/scaling/the-box-that-built-the-modern-world-rp
Containers also changed the manufacturing process itself. The reliability of containerized shipping spawned a new field in business schools around the world, namely supply chain management. In the 1980s, “inventory” became a dirty word. Instead, everyone from carmakers to clothing retailers adopted a “just in time” philosophy, minimizing the time parts sat in the warehouse before being assembled and sold.

and

When the cost of shipping American cotton to China, having it sewn into shirts there, and shipped back to Wal-Marts in the U.S. sank to nearly nothing, the bottom fell out of the American textile industry.

Rather than being threatened by unreliability, JIT + containerisation is so potent that it's a threat to protected industries. No wonder the EU likes to have a tariff moat around it. If the EU chose to wilfully disrupt a supply chain by needless bureaucracy and deliberately unpredictable procedures, well I guess you can't stop it. But that behaviour will be 'called out' for what it really is.

The risk is not in the distance or transport duration - that's all planned by operational research. It's not in which customs borders are crossed - that's all old hat and already being dealt with via WTO. Risk is in acts of god and in maverick governments.

Rinoa

Zero_Gravitas wrote: »

All this statement shows is that you don’t appear to understand modern manufacturers and supply chains.

Which would also explain why you didn’t answer the question you were asked - please give examples of modern supply chains operating in a JIT manner across continents and how do they mitigate the risks of delays?

German manufacturers build several hundred thousand cars in the US.

https://www.dw.com/en/are-german-cars-american-enough/a-44149537 This link explains how the BMW X series has fewer than 25% local content with 75% shipped over from Germany.

So either the parts get to the factory J.I.T between 2 countries operating on WTO rules, showing how easy it is, or the parts are shipped across and warehoused until needed, which doesn't appear to cause BMW any problem whatsoever.

buglawton

So the govt finally started to publish its no-deal advice today.
Here's a page on preparations for when we fall out with the EU:

Zero_Gravitas

Tee_Maynott wrote: »

In life there are two types of people.
Problem finders.
Problem solvers.

Guess which most employers prefer to hire?

Although if you think about it logically for a moment, there’s no point having people who can solve problems unless you have people who can find those problems in the first place.

What most employers actually prefer to have is people who can avoid creating problems in the first place - which makes anybody advocating a hard brexit unemployable...

buglawton

Zero_Gravitas wrote: »

Although if you think about it logically for a moment, there’s no point having people who can solve problems unless you have people who can find those problems in the first place.

What most employers actually prefer to have is people who can avoid creating problems in the first place - which makes anybody advocating a hard brexit unemployable...

Hmm creating problems. Lets have a look at a couple of the EU's negotiating principles:

http://uk.businessinsider.com/eu-brexit-negotiating-position-principles-red-lines-in-full-2017-4

...Issues can't be settled separately and the whole deal must be agreed before anything is signed. Britain can only negotiate with the EU too, not with individual members;

...The EU wants a single financial settlement, dubbed a "divorce bill" from Britain. The figure is not mentioned by the EU has previously said it will ask for €60 billion.

A negotiating position that's set out before negotiatons even start!

That might explain the high unemployment rates much of the EU - it's run by problem creators. Who in their right mind would employ them?

Zero_Gravitas

buglawton wrote: »

http://nautil.us/issue/29/scaling/the-box-that-built-the-modern-world-rp
Containers also changed the manufacturing process itself. The reliability of containerized shipping spawned a new field in business schools around the world, namely supply chain management. In the 1980s, “inventory” became a dirty word. Instead, everyone from carmakers to clothing retailers adopted a “just in time” philosophy, minimizing the time parts sat in the warehouse before being assembled and sold.

and

When the cost of shipping American cotton to China, having it sewn into shirts there, and shipped back to Wal-Marts in the U.S. sank to nearly nothing, the bottom fell out of the American textile industry.

Rather than being threatened by unreliability, JIT + containerisation is so potent that it's a threat to protected industries. No wonder the EU likes to have a tariff moat around it. If the EU chose to wilfully disrupt a supply chain by needless bureaucracy and deliberately unpredictable procedures, well I guess you can't stop it. But that behaviour will be 'called out' for what it really is.

The risk is not in the distance or transport duration - that's all planned by operational research. It's not in which customs borders are crossed - that's all old hat and already being dealt with via WTO. Risk is in acts of god and in maverick governments.

That's hardly a specific and actual example is it - that's a very generic article about containers that mentions JIT once with out explaining in any way whatsoever how it is done...

In one of my past lives, I was working in global supply chain. Our empirical figures were that the reliability of box boats from China to the Uk was about 63% for arrival on scheduled day, and for the rest the majority were between 3 days early and 7 days late (neither of which is any good for JIT). Add to the possibilities of port delays and you simply can't run a JIT operation that way.

What you can do is run JIT in what we called "last leg logistics" - which effectively means you have a container holding facility local to manufacturing from where you call off the containers (or break the bulk) on a JIT basis. Generally, these are run by the logistics company, and it's their job to make sure the containers are in place in time for the call-offs.

Zero_Gravitas

Rinoa wrote: »

German manufacturers build several hundred thousand cars in the US.

https://www.dw.com/en/are-german-cars-american-enough/a-44149537 This link explains how the BMW X series has fewer than 25% local content with 75% shipped over from Germany.

So either the parts get to the factory J.I.T between 2 countries operating on WTO rules, showing how easy it is, or the parts are shipped across and warehoused until needed, which doesn't appear to cause BMW any problem whatsoever.

As I've just explained to Buglawton, BMW won't be running JIT manufacturing straight off the boat - they'll be using some local warehousing. However, the big difference is that this is how they set up the factory in the first place (although it's interesting to note that a number of their American suppliers have either moved or set up new facilities close to Spartanburg to make it easier for them to supply JIT).

For UK manufacturers, they have built and set up their factories on the basis that there is fully frictionless trade across the EU - and it's the change that Brexit brings that will be the problem - as per the original article about Honda in Swindon:

(https://www.ft.com/content/8f46b0d4-77b6-11e8-8e67-1e1a0846c475)

phillw

Rinoa wrote: »

So either the parts get to the factory J.I.T between 2 countries operating on WTO rules, showing how easy it is, or the parts are shipped across and warehoused until needed, which doesn't appear to cause BMW any problem whatsoever.

That is flawed logic.

1. Warehousing in the US is very very cheap because they have a large amount of spare land.
2. The US market is large
3. They have built their pricing model based on their process.

BMW in europe have set their prices based on JIT. Changing that now will involve a massive amount of investment, which will drive prices up, which will lower sales and risk jobs.

I doubt BMW germany are going to be too happy subsidising brexit & I don't blame them. It should come directly from the pockets of the half of the country who wanted it

Leavers who demand that we change everything because they want to stop "too many" foreigners coming here and they want other people to foot the bill are the problem.

buglawton wrote: »

Hmm creating problems. Lets have a look at a couple of the EU's negotiating principles:

http://uk.businessinsider.com/eu-brexit-negotiating-position-principles-red-lines-in-full-2017-4

...Issues can't be settled separately and the whole deal must be agreed before anything is signed. Britain can only negotiate with the EU too, not with individual members;

...The EU wants a single financial settlement, dubbed a "divorce bill" from Britain. The figure is not mentioned by the EU has previously said it will ask for €60 billion.

A negotiating position that's set out before negotiatons even start!

The creation of the problem is leavers. This is the EU's solution to the problem & it's a really good one.

In the past the UK has acted in bad faith and they have learned from it. We've repeatedly given them enough reason to distrust us.

If you're acting on the understanding that we're the good guys and we deserve better then I can see why your thinking would be flawed.

ukcarper

phillw wrote: »

That is flawed logic.

1. Warehousing in the US is very very cheap because they have a large amount of spare land.
2. The US market is large
3. They have built their pricing model based on their process.

BMW in europe have set their prices based on JIT. Changing that now will involve a massive amount of investment, which will drive prices up, which will lower sales and risk jobs.

I doubt BMW germany are going to be too happy subsidising brexit & I don't blame them. It should come directly from the pockets of the half of the country who wanted it

Leavers who demand that we change everything because they want to stop "too many" foreigners coming here and they want other people to foot the bill are the problem.



The creation of the problem is leavers. This is the EU's solution to the problem & it's a really good one.

In the past the UK has acted in bad faith and they have learned from it. We've repeatedly given them enough reason to distrust us.

If you're acting on the understanding that we're the good guys and we deserve better then I can see why your thinking would be flawed.

Would it not be possible to sort out a means by which component parts can be shipped between EU and U.K. without needing to be checked at border. I think it would without impacting greatly on free market, but EU seem to rule that out on what to me look like idealistic reasons.