over the past few decades stateside industries have increasingly moved toward just-in-time inventorying practices....incorporating one of col. deming's japanese based "best practices" models....the issues with transportation are strongly linked to just-in-time....this thread is rich with examples of individuals who testify that they do not believe in just-in-time - pallets of shot, primers by the 10k lot, etc. the covid-19 pandemic is just one example of a crisis...they come in many flavors, but they all have one thing in common - they reveal the weak spots in your systems. covid has shown a bright light on the inherent weakness of the just-in-time supply chain concept....in the olden times a factory that had a "warehouse" had a built-in buffer that no longer exists when the production line is located immediately beside the truck receiving docks....imagine the advantage an ammunition maker would have had if they were able to make product long after their competitors had to shut down production - i wonder if this situation might cause industry to reconsider their devotion to just-in-time inventories.
if you think lead shot is high - just look at lumber prices. dimension lumber is a commodity naturally highly dependent on just-in-time practices. the chicago mercantile exchange spot for dimension lumber reached over $1.70 per board foot earlier this year...a trip to a lumber yard could induce a heart attack. in the past few weeks spot prices have "moderated" back to 50-60 cents pbf. covid has been similar to a gulf coast hurricane, in that it generated abnormal demands for some commodities - and, exactly like there ain't enough highways out of houston/new orleans/miami to handle the crush....there weren't enough common carriers to handle the increased demand. i don't worship at the market "shrine", but the market has adjusted to the short term demand spikes....and when they moderate, the prices will adjust back closer to the norm.
our current political atmosphere has deficit/inflation hawks sounding the alarm....but jerome powell and janet yellen are trying to explain that we are in a bubble of price increases that are more like this leadshot/lumber/hurricane model than like traditional inflationary situations. however, the cdc (and my step-daughter - who is a physicians assistant) are warning that we are heading back into more dangerous exposure to the new covid variant in the fall and winter....and if that is the case - this roller coaster ride is not over.
best regards,
tom
