How Auto Manufacturing Makes You More Likely to Die in a Crisis, Plus, Ironman is a Mass Murderer.

“The most efficient killing machine ever invented; you’ve got her doing the laundry.” – Terminator, The Sarah Connor Chronicles

My first job was in a toy vampire manufacturing factory.  I worked as part of a two man team, so I had to make every second Count.

Modern society is based on efficiency.

Efficiency in what?

Efficiency in everything, from the proper number of employees to completely mess up my order at McDonalds© to using the absolute minimum amount of labor and material to make a car.

Let’s stick with cars, because the local McDonalds™ in Modern Mayberry is primarily efficient only at serving me a Sausage McMuffin® without sausage, egg, or cheese.  Yes.  They served me a plain muffin, which I guess is more efficient.  In 2018, Toyota® sold roughly 8,000,000 cars, trucks and station wagons (I refuse to call them SUVs on principle) worldwide.  Overall, 86,000,000 new cars were made and sold in 2018.

I think cars just might finally be catching on as a consumer item.  Maybe they’re not a fad after all.

When you do something 86,000,000 times, though, you start to get good at it, or at least sore.  I brought up Toyota© because they decided to get good at making cars, and were highly innovative in trying to increase quality while at the same time increasing efficiency – they made better cars with less labor, less rework, less effort.  While I can make the case that Detroit finally caught up with Toyota™ by the early 2000’s as far as quality goes, Toyota® was leading the pack for decades – that’s why they’re the number one auto manufacturer in the world today.

One particular innovation that Toyota® came up with was “just-in-time” manufacturing, which is also known as “Lean Manufacturing.”  The concept is simple:  I make a car with parts that just showed up – nobody has to go get them, they just show up right when I need them.  The ideal would be the supplier delivers the part to the production line at the moment it’s required.  The windshield wiper salesman puts two in the bin as the next Corolla™ arrives at the windshield wiper installation station.  There isn’t a bucket of thousands of wipers behind the worker, just the few he or she needs right then.  Hence?  Just-in-time.

Just-in-time sounds really nice.  The things you need just show up, right when you need them, as if teddy-bear angels with lace wings made them materialize from the aether as they used to when Victoria was Queen.  In practice, you need more than two windshield wipers at the Corolla© assembly station, but you might only need enough for an hour.  Or two hours.  That de-clutters the line, and makes the work actually go faster.  Implementation of this system is one reason Toyota™ went from a mass producer of cheap cars to a mass producer of high quality cars.

Why didn’t they invent and do this just-in-time production in 1880?  Transport speed.  Slow transport requires stockpiles and large shipment.  Also required is production coordination.  Assembly lines break from time to time – you have to make sure that the windshield wipers don’t stack up like chocolates on an assembly line.  There has to be sufficient communication, and the Internet helps make it easy.

Now?  I can order prescription glasses online and have them shipped to my house directly from the manufacturer in China in less than a week.

Worth watching again even if you’ve seen it before.

The rest of the world has, in the last thirty years, done everything they could to adopt this system, which is now called “Lean Manufacturing.”  Accountants love it, because it reduces inventory, and turns that inventory into cash as soon as possible.  An example:  the average grocery story turns over its entire inventory nearly 14 times per year, which means lots of items hit the shelf and disappear.  Some grocery stores even have the vendor stock the shelf, eliminating costs there as well, as they attempt to get the customer to do the job of a checker.

But the at least the cashier was dead sexy.

The result of this effort is a one-time boost in profits as inventory is reduced.  There is also the ongoing benefit that the money that paid for the inventory (that no longer exists) can be used for some other business purpose like bonuses, bacon-wrapped shrimp, corporate jets or Harvey Weinstein’s sexual harassment lawsuit settlements.

But since there’s less inventory, you need fewer warehouses.  And fewer warehouse workers.  Yay!  More money for bacon-wrapped shrimp!  You can see how this was a dominant concept in the late 1990’s when most corporate jobs required that you sign over your soul to Satan®, or Al Pacino if Satan™ had taken the corporate jet with Weinstein that day.

If I were to create a personal analogy, Lean Manufacturing is similar to the idea that when you buy gasoline you buy just enough for this trip, and this trip only.  No more wasteful storage of gasoline inventory.  And why keep more than a single meal on hand in the house?  While we’re at it, let’s also reduce that inventory of money we keep in the bank.  I bet we could make sure our lives are structured around a system that I think I’ll invent a snazzy name for:  Paycheck-to-Paycheck™.

If you think no one cares if you’re alive, skip a month’s worth of bills.

So, all sarcasm aside, the paycheck example starts to illustrate the problems with Lean Manufacturing.  Inventory is a bad word in a manufacturing plant, and no manufacturing plant in the world would keep spare capacity that it doesn’t use regularly just sitting there.  Soon enough, a bright young soulless MBA from the head office will either start production on the spare capacity, sell the manufacturing equipment, or take a jet trip to a conference where there is a platter of free bacon-wrapped shrimp.

What has been profitable business advice is, as you can see, horrible personal advice.  Life isn’t about efficiency.  Life is about . . . life.  Being inefficient actually has some huge advantages.

People who regularly prepare for disasters (“preppers”) have popularized the phrase “Two is one, and one is none.”  I looked for the origin of the phrase, and I believe it is old enough that it probably originated in a Roman Legion stationed in Carthage, when a grizzled Centurion stuck a cigar in his mouth and was dressing down a new recruit for having an insufficiently shiny gladius.  And don’t tell me that it was another 1,500 years until tobacco was introduced to Europe – an outfit with a good supply guy can find anything.

Okay, you don’t need two of everything.  A friend of mine has two ex-wives.

The philosophy of prepping is the exact opposite of Lean Manufacturing.  It says that we are stupid – we don’t know what’s going to happen so having extra supplies is crucial.  Stuff gets broken.  Stuff gets lost – just this week somebody found a batch of Revolutionary-era bayonets in a pit at Valley Forge.  You can bet there was a corporal that got his butt chewed over those by George Washington.  But I’m betting that the Continental Army had some extras.  Heck, it’s certain that even the Egyptians knew to store the extra grain in good years 6,000 years ago because:

• Spare capacity is freedom,
• Spare capacity is resilience,
• Spare capacity gives you time and space when both are precious, and
• Scarcity is the enemy, not inefficiency.

Recently, there have been a series of movies about obscure comic book heroes from the 1970’s.  You might have heard of them – The Avengers™.  In one of them, The Avengers:  Quest for Infinity Cash®, the villain (a very large Smurf™ named Thanos©) had been hungry as a child and decided nobody should ever be hungry again.  Thanos® then gathered a bunch of magic rocks which allowed him to make a super glove so he could make a wish.

I’m not making this up.  People spent $2.048 BILLION dollars to see that story.

See?  Big Smurf® and magic rocks.  Told you I wasn’t making it up.

Anyway, Thanos®’ wish was that half of the people in the Universe disappear.  That’s just what happened.  Half the people turned to ash.  It really wasn’t that sad, at least for me, because it’s a comic book and Superman and Batman have each died something like fifty times, so death in a comic book movie is about as permanent as a Hollywood marriage.  The movie ends with lots of people, including Spiderman®, dissolving into ash.

I took The Boy and Pugsley to go see the sequel, The Avengers:  Endgaming for Even More of Infinity Cash©.  Whether or not the people who turned into ash were going to come back was spoiled before the movie started – one of the trailers was for the new Spiderman® movie.  Endgaming© starts five years after half the people in the Universe turned into ash.

After watching the movie I’m thinking that, like every member of Congress, the screenwriters had no training in economics.  Okay, a big Smurf© snaps his fingers and everyone disappears and I’m concerned they didn’t get their economics right.  Yeah, I’m an economics nerd.

What did they miss?  Well, after all the people disappeared the economy would have cratered.  We would have gone from producing 86,000,000 cars to producing . . . zero.  The economy would stop completely.  Grain would rot in the fields because half the people who ate Twinkies® were ash.  In 2009 when the Gross Domestic Product dropped by 2.5% and the economy nearly locked up.  If half the people disappeared, the economy would drop by 70%.

Anarchy.

But in The Avengers:  Endgaming for Even More of Infinity Cash©, everybody who was turned into ash returns after one of the Avengers® (Tony Stark™) snaps his fingers.  Take that, Thanos©!

Except by doing that, Tony Stark© just sentenced most of them to death when they showed back up.  Why?  In five years, the economy on Earth had contracted to serve not 7 billion, but 3.5 billion.  When an extra 3.5 billion people show back up?  Our just in time world only has food for 3.5 billion.  We only planted enough corn for 3.5 billion.

Massive famine and starvation.

Oops.

Thanks, Ironman©.  Instead of a nice, peaceful death you’ve condemned some large fraction of beings on every planet to a horrible slow death of starvation, misery, and violence, mainly thanks to the lack of resilience in our planetary production systems.  I guess that I should stop expecting economic accuracy in a movie that features a talking raccoon.

Only be the last guy to the supermarket during a disaster if you want to take amusing pictures.

But I am concerned – our economy is based on a global experiment in efficiency that frees up capital for bacon-wrapped shrimp, at the cost of making our lives less secure.  What could go wrong?

Sweet dreams!