points by GavinMcG 5 years ago

Finally, halfway through the article:

> [home weight] sales usually start in the fall, hit their peak with January’s New Year’s resolutions, then taper off as it gets warmer and people are more likely to venture outside or go back to the gym.

> ...

> 95 percent of the world’s dumbbells are made in China, Logan said. To curb the virus spread, China instituted strict lockdowns from January to April;

> ...

> “It takes a month or so to get the products made and get them to the port,” Logan continued. “Then it goes from China to the United States” — landing, she says in Long Beach, California — “and then if they’re going to the East Coast, they have to go through the Panama Canal.”

> Once weights do get to America, ports, too, are subject to lockdowns and social distancing, adding even more delays.

Joker_vD 5 years ago

So, the supply shock is followed by an explosion in demand, and since "inventories are bad!", there is suddenly no goods available for purchase.

  • ch4s3 5 years ago

    > and since "inventories are bad!"

    It's not that it's "bad" to hold inventory, it's just expensive and risky. Tastes change, there's shrinkage, some things degrade over time, rents are high, and you have to finance buying/holding things you aren't selling. Obviously, just-in-time inventory isn't super resilient, but it has a ton of advantages most of the time. Perhaps it doesn't make sense for NOTHING to be stored near the point of sale, but it's not clear to me at least how that should be decided.

    • raverbashing 5 years ago

      > Tastes change, there's shrinkage, some things degrade over time

      I think most of these don't apply to dumbbells. At least not on a short term.

      Now, the shortage seems to have kickstarted small shops dumbbell production lines (which are easier to put together than kettlebells)

      • Melting_Harps 5 years ago

        > I think most of these don't apply to dumbbells. At least not on a short term.

        It does apply and is very pertinent, especially with ever decreasing operating capital in the small business sector; less predictable turnover/resupply rates and the likelihood that excess inventory turns into liabilities that can only be recovered via a liquidation process if they get it wrong is a risk that must be mitigated.

        100% optimization in supply forecasting is an unobtainable panacea, but as has been seen with the asymmetric application to Gym Shutdowns, that varies by State, it reflects how uneven the reward could play out. Cost management is a huge part of Supply Chain and Logistics, so the constraints are obvious if you really take the time to analyze the situation.

        I think all this underscores is the glaring single point of failure starring back at us with an entirely outsourced manufacturing infrastructure, and the inherit fallacy within it.

        Gyms are open in my state, and I'm glad that they are because the buying all the machine and equipment that I use on a regular basis would require exceeding 10s of thousands of dollars, not to mention the pool and the still closed steam room/sauna I used prior to the shutdown.

        > Now, the shortage seems to have kickstarted small shops dumbbell production lines (which are easier to put together than kettlebells)

        Proving that the US can still manufacture despite the limited infrastructure and hollowing out of the means and resources to do so in the aftermath of Globalization.

        I think what baffles me is how in my lifetime the notion of actual manufacturing-fabrication went from something that elevated so many in the US into the middle class came to be looked down upon and seen beneath an 'educated' person.

        Especially because I actively participated in something where it was normal that undergrad to PhD mechanical and electrical engineers from Ivy Leagues Universities were working hand in hand with sometimes HS dropout mechanics and fabricators (on forums!) to develop better turbos and fuel mapping hardware/ECUs that were surpassing the gains of OEMs and even the well established aftermarket manufactures especially at time that it was being entirely under-served despite a significant demand that only increased with time. And then creating viable business models on those very same forums to serve as customer facing business with nothing more than a thread, a paypal account alongside a guy with tig welder a soldering gun.

        Trump is an imbecile that predictably conned his way into office, and I hope he gets removed, despite the alternative not looking any better. But I really want the West to realize that the spotlight and rhetoric (mainly lip service) he put on China/CCP is warranted, and what occurred in Hong Kong is only a taste of what they're capable of and what they will do to their own kind (HK is Ethnically Han Chinese).

        Reliance on such an oppressive regime is not sustainable and never ends well and the pitfalls and subsequent shortages of this centralized manufacturing infrastructure for even essential goods, like PPE, should be a much needed wake up call for manufacturing to return to at least their own continent(s).

        > Or pick up 2 bricks. I did.

        I resorted to filling 2 liter soda bottles and gallons with water for various lifts and isolation reps, it was a very dissatisfying experience from what I was used to but... it did help keep me somewhat fit, my upperbody PBs/Max lifts were only off by 15% by the time I went back to the gym when they reopened by mid Summer.

        Sidenote: I just applied to a positions as Logistics Coordinator for a fitness equipment company, and they're currently on a 10-15 day delay on current orders. I kind of hope I can interview just to see the inner mechanics of what this all entails and where supply is being sourced from.

    • throwaway_pdp09 5 years ago

      N00b here. I'm curious about JIT pipelines because the cost seems potentially so high when things go wrong, and JIT surely is fragile.

      > Tastes change,

      If you have a moderate inventory, surely they don't change that fast that you're stuck with much.

      > there's shrinkage,

      What's that?

      > some things degrade over time,

      But many don't

      > rents are high,

      are they (I really don't know)? How much to rent a warehouse out of town?

      > and you have to finance buying/holding things you aren't selling.

      But you are, they're not worthless inventory, just a buffer and you're still using them.

      If you're JITting then those costs you claim will not go away, they're just passed on to your suppliers (who have to handle their pipeline/stocks) who will pass them back to you as higher prices. I don't get it.

      • yodon 5 years ago

        > If you're JITting then those costs you claim will not go away, they're just passed on to your suppliers

        Except your suppliers are JIT'ing, too, just as you are, for all the same reasons.

        The savings may seem small to you, but if you are in a price competitive market (as is the case for most physical goods) your percentage markups are typically very small compared to what software developers are accustomed to. The grocery industry, for example, is famous for making about 2% profit margin. That means if you can shave 1% off your costs, you increase your profits by 50% in that industry. Very small optimizations can have phenomenal impacts on the risk and profitability of physical product and supply chains.

        > What's [shrinkage]

        Shrinkage is an industry term for items that get lost in physical supply chains. It's often hard to know what is theft and what is loss of products due to other processes like things getting misplaced, lost in shipping, accidentally shipped to the wrong customers, discarded by mistake, etc. If you run a large enough physical logistics system, you will inevitably have some amount of unexplained loss in the system. That unexplained loss is known as shrinkage, and it's a real and measurable cost in all physical industries (in the grocery industry shrinkage is about 1%, some fraction of which is theft and some fraction of which is other processes).

        • Joker_vD 5 years ago

          Ah, shrinkage. Once upon a time, in the army of a country that no longer exists, each soldier was supposed to have been provided with two waffle towels, each 96 cm long. Since such a towel can be easily made from a 1m long cut of fabric by tucking and sewing small margins on all four sides, the supply departments simply distributed [headcount] * metre-long rolls of fabric to the units.

          Then one day an inspection arrives, grabs the nearest towel (used and washed many times) and measures its length. Naturally, it's shorter than 96cm since there has been shrinkage (heh), but try explaining that to the inspecting commission! Thankfully, since it's the waffle fabric, it could be done: take a fresh new towel, count its squares, then take the used towel, count its squares, and compare the numbers.

    • Joker_vD 5 years ago

      Yes, it's a pretty general pattern overall: being prepared for an emergency/catastrophe means that you have to spend resources on resilience instead of spending them on development/making more money. When the catastrophes are rare that means the "prepared" ones are outcompeted by the "lean" ones, and so when a black swan finally arrives, bang, everyone's caught naked in the middle of the night.

      Looks like a rather typical scenario of a market failure, isn't it? That's why national governments typically have National Emergency Reserves or something like this, but naturally, even they only stockpile really basic and absolutely necessary stuff. Dumbbells ain't one of those things.

  • Spooky23 5 years ago

    That contributes, but end of the day the supply chain for a sleepy little niche market will never account for the sudden demand of an event like COVID with widespread gym closures. There is no scenario where it makes sense for the market ro stockpile 10 years of workout equipment demand.

    The secondary market is insane. People are selling rusty dumbbells for the price of copper ($3/lb) in my area. One pictured on Nextdoor had a circa 1985 Sears label on it.

    If anything, COVID should be a wake-up call for the idiocy of modern manufacturing. In my business I'm having weird supply chain issues for stupid parts (think stamped metal), and I'm finding that having low-volume, custom manufacturing work done on-shore isn't as outrageously expensive as I thought it would be (I expected 300% more, paid 20%). Middlemen and Chinese manufacturers are making lots of margin on products that could be made anywhere.