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Message: <blockquote data-quote="Umbran" data-source="post: 8797620" data-attributes="member: 177">So, interesting history here.A major reason the Spanish Flu pandemic of 1918 didn't have all the much of an economic impact on the US isn't that we were a sturdier economy - it was that we were in WWI at the time the pandemic began.  About 6% of the labor force was in the armed forces, and 38% of the GDP of the US was government spending, and the government did not stop for the flu.Much like the economic dislocation of covid-19 was short lived, largely due to government spending.  Go figure.So, in reality, this is easily fixable.  I have an example.Back just after WWII, Toyota was in trouble.  They needed to get their cars into the American market, but aside from ill-will after the war, their cars were expensive, and poor quality.  So, the company knuckled down, innovated, and crated the basis of what we now call, "lean manufacturing."Before this, car manufacturing (and indeed, most major manufacturing) was done on a yearly cycle - the "model year" is based in this.  You had a design, you made a large number of them all at once, and then tried to sell them.  Stuff you couldn't sell became inventory that didn't move.Lean manufacturing notes that any inventory you don't need, either in supply or finished product, is a financial liability, and needs to be eliminated. They replaced the yearly cycle with "just in time" manufacturing, which led to using "just in time" supply.  This, along with some other innovations in process, has rocketed Toyota into the top of automotive production and sales.So, of course, everyone else has copied them, and everyone is using "just in time" supply.Which, as you might guess, falls apart when the supply chain is disrupted.Back at the beginning of the pandemic, folks may recall that it was nearly impossible to find a new car to purchase - the supply of computer chips was disrupted, so cars weren't getting made.Except for, you guessed it, Toyota.Back in 2011, there was a tsunami that hit Japan, and it did major damage to two industries - plastics (specifically for this example, the plastics used in creating the safety glass used in cars) and chip manufacture.  And Toyota was hosed - the plastics industry rebounded quickly, but their computer chip supply took much longer.So, there was a big company meeting, where they analyzed their supply chains, and noted which supplies are apt to bounce back quickly from disruption, and which were not, and started keeping inventory of computer chips and a few other things so that they can keep producing when supply is disrupted.  So, when covid-19 hit, they could keep producing cars when others couldn't.The problem is that the rest of the world only sloppily copies Toyota.  They still grasp it as "inventory is a liability" and not "inventory that you don't need is a liability.  Toyota needs that inventory as a hedge against disruption, so they keep it.The problem isn't that the world is so connected.  The problem is that in that connected world, corporate profit seeking is nearsighted.  If corporations learn from their mistakes, they can build themselves a buffer against disruption.</blockquote>

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