It has been a tough couple of weeks for me. First an august body, to which I am appointed, suffered worldwide embarrassment. Second I am heart sore resulting from my own behavior. Thirdly, I am burdened with the knowledge of an ethical dilemma which, while it does not involve my actions, could be yet another blow to the city I love so. The only thing that I am thankful for is that because I am forced to keep my distance, I have not bent everyone’s ears about my first world problems. On top of all that, a few more pieces of a puzzle have slipped into place for me, concerning our shared condition. Normally I try to share the positive experiences in my life. Sometimes logic and timing shade my thinking. Below is something that came to me this week.
I read something in the news that actually made sense. I know, it was probably a one off but never-the-less. First though, let us put the pieces together.
- A vaccine is 12 – 18 months away.
- The threat will not pass until we achieve herd immunity.
- Herd immunity is 2/3’s of the population.
- You cannot get immunity until you have been exposed.
- You cannot be exposed if you isolate and wear a mask.
- So in order for this all to pass, we must all get infected.
Jump in any time and correct me if I have gotten anything wrong . . . please!
Let me take you back to yet another dinner table conversation that I remember from my youth. My father was a pharmacist and worked for the old Payless Store in San Pablo. As the chief pharmacist it was his job to order the inventory and manage stock levels. I remember him coming home one day shaking his head about something that happened at work. At dinner he went on to explain that his boss was directing him to order products in a certain way. His boss wanted him to order small quantities from the store’s main distributor. My father could order from the manufacturer in a slightly larger bulk for a much better price and turn a better profit for his store. Which he did. And this is what frustrated him. Even though he showed a higher dollar profit, his boss was directing him to use a version of just-in-time delivery.
Just-in-time delivery is a concept that I believe was developed for the auto industry. Let us say that Auto Maker 1 planned to manufacture 100 autos per day or in other words, 500 per week. So rather than get a weekly shipment of the various parts for 500 cars once a week, they would get the parts for 100 cars once a day. Or maybe 50 cars twice a day. Just-in-time. This process reduces not only the amount of inventory a company must keep on hand, this reduces the amount of cash locked up in that inventory and the amount of space necessary to them. Suppliers could then streamline their production output to just meet the demand by Auto Maker 1. They in turn could reduce their raw material inventory and so on and so on. The benefit of this system is that while it required capital to get started, and capital can be easily borrowed, all this systems really needs is a steady flow of business and cash. Business to consume the product and cash to pay back the loan. A cost savings for businesses and a boon for banks lending money. The problem with this system is simple. Should one part fail, the entire system fails.
That brings us up to today. Follow me on this if you will.
- Shelter in place has effected many industries.
- We do not need as many new cars nor gasoline since we are not driving.
- We do not go out to movies or to restaurants so no need for them to be open.
- We are not going out as much so no need to purchase as many clothes.
- However, we still need to eat.
- Just recently there was news about the meat packing plants closing down.
- Question: What happens if we cannot supply the just-in-time food deliveries to retailers?
So here we are left with one more question to answer:
Why is the government so ready to start opening up and declaring meat packing plants as essential knowing that more people will get infected and die?
Could it be that we do not have enough food in the supply chain to last very much longer? At least not without having people go back to work at food processing facilities. So it seems that we are not through this at all, and in order for us to survive as a whole we need to eat. And since the food we eat comes just-in-time, when the system is functioning normally, it almost becomes a mathematical equation. How many will die from the virus, versus what will happen to our society if we run out of food? (Think Bread and Games.)
Infections will continue, they have told us that already. A few different treatments are being touted in the press to help ease our fears. Even with that it seems that we will not see the other side of this for some time and not without a significant loss of life. The truth? It no longer is a matter of if, only a question of when you catch this flu.
Until next time,