Something Needs To Change - Home RenoVision DIY represses frustration with materials costs and delivery times

[mat200]

This video brings up some very important questions..
"Something Needs To Change - Home RenoVision DIY represses frustration with materials costs and delivery times"


Something Needs To Change

Home RenoVision DIY

Why is it getting harder to be an average joe these days? Why are building materials costing more and taking longer to arrive? Where's the opportunity for competition? I think the average family in North America is getting stepped on, and nobody is doing anything about it. What do YOU think?

 

[JNDATHP]

^^^ All the damn spending by the Democrats equals inflation.

 

[looney2ns]

The bubble will pop soon, then everything will come back down to earth.

 

[sebastiantombs]

^^^^ But it's going to be painful, as in a boil popping.

 

[The Automation Guy]

^^^ All the damn spending by the Democrats equals inflation.

I'm as Republican as they come, but it isn't Democratic spending induced inflation causing our pricing issues right now. To suggest that it does shows a lack of economic fundamentals.

It is 100% caused by the COVID-19 related shutdowns which have caused disruptions in the supply chain. We are now seeing the effects of a nearly complete world wide employment shutdown that lasted months. It's normal supply and demand forces at work here. It will also go back to normal as the supply chain gets ramped back up. Although how long it will take is anyone's guess (and it will be different for every product).

If anything, this has taught us how reliant we are on various manufactures/components around the globe. The fact that the shut down of semiconductor manufactures in Taiwan have caused such a wide disruption (everything from cars to computer parts) should be a wake up call. At least there is bi-partisan support in Congress to reinvigorate US semiconductor manufacturing again.

 

[mat200]

Global Supply chain is very complex and extensive, designed as cost to just in time as possible / lowest inventory hold costs. Thus the Pandemic halts of the supply chain flow really threw a monkey wrench into the whole system..

 

[The Automation Guy]

Global Supply chain is very complex and extensive, designed as cost to just in time as possible / lowest inventory hold costs. Thus the Pandemic halts of the supply chain flow really threw a monkey wrench into the whole system..

Yup.

To your point for example, the auto manufactures saw a huge decrease in the demand for new cars when the pandemic hit. In response to this, they cancelled a lot of orders with suppliers because they didn't need to produce as many cars at that time. Semi-conductors was one of the type of orders cancelled. When the demand for autos went back up, the went back to their suppliers to order parts only to find that the semi-conductor manufactures were busy producing other types semi-conductors and they had to wait in line to get their orders filled. That is what has caused the shortages the auto manufactures are seeing now because they have come to expect parts to be delivered "just in time" to reduce inventory and save money. But when a $0.30 semi conductor isn't available and isn't going to be produced right away, it means cars can't be completed and sold. Instead they are sitting on a lot somewhere waiting for that part with the $0.30 semiconductor in it to be delivered so they can finish the car. This has resulted in real shortages for new cars which in turn has resulted in higher prices for the end consumer for the cars that are available (again - supply and demand dictating pricing). And yes, 30 cent semiconductors are really holding up cars from being completed and sold right now.

This is happening across all sorts of products right now.

To make matters worse, Taiwan still doesn't have great access to the COVID vaccines yet and their infection rates are still high. One of the world's largest chip testing facilities is currently shut down for two weeks due to a high number of positive cases. So this isn't an issue that is "behind us" yet.