I was thinking about inventory management yesterday.
There’s a stigma about salesmen because we live in a low-trust society.
Back when I was calling on factories, 80% of the people there would have supported a ban on all soliciting, period, and done so with glee.
But the main job of a B2B salesman is forecasting and inventory management. The 20% understand this.
The 80% think B2B is like Amazon where you order 20,000 valves with the special coating treatment and then pay extra for overnight shipping.
Real story, not hyperbole: In a plant that was built just a couple of years ago (that easy 2017 credit tho), there was an algae in the plant water that was making it so basic that it was eating industrial-grade seals.
The main reason all these big customers have these weird and wonky special requirements for special production runs is because they’re using their monopsony position to not fix their internal problems.
Sure, you could fix your plant water…
…but you could also just make it part of your “spec” that valve seals have to be able to survive your plant water, then have suppliers compete to please you for the big order.
Anyway, the problem here is even big suppliers don’t have 20,000 of your special valves on the shelf. The 20% know this.
That’s a special production run AFTER you already have a commitment for the big order. Nobody can produce parts ahead of time for every order they MIGHT get.
But the 80% are usually the ones who set policy. So even before Covid, there was a “nobody gets in” policy, which was then circumvented with various exceptions.
Anyway, this is just an example of how trust breaks down communication, and communication breaks down planning, and projects run on forever and fail to break even, and then you just don’t see as much economic activity anymore.
Suddenly ventures that would have returned 10% aren’t viable anymore. And then you see news articles that say “why are there no new restaurants?”
Well, restaurants have low margins.
And if you can’t trust the suppliers for fresh produce because you refuse to communicate with them on how much you’re going to use, then you can’t have a restaurant.
So this is how civilization collapses. First, people stop talking to each other.
It’s like a marriage that way.
Well, I should say first they stop laughing together.
Then they stop talking. Then mistakes start incurring real costs, so everybody gets really gunshy.
Everything ends up taking way longer than it should. Projects that should be viable don’t even get considered. All the movies are copy/paste sequels and they barely break even.
Economic stress goes up, the quality of the masses’ opiates gets watered down.
And when the opiate high wears off, that’s when things get serious.
This basically fleshes out Tainter’s “The Collapse of Complex Societies”
The big insight is that the cost of maintaining things goes up, and the cost of building new things goes up more
But it’s not always so great on WHY this happens (usually focusing on new societal codes and increases in tax burdens)
THIS is a much better explanation
I think my big addition here is that lack of trust leads to lack of communication leads to no forecasting leads to project overruns.
And that’s where the real costs are incurred, not so much tax codes.
Planning is important.
It’s funny how much of genius is just noticing shit and then writing it down.
When you have autism the systemizing part happens automatically.
Intellectual: Addiction to noticing shit.
Artist: Addiction to writing down whatever shit comes into your head.
Genius: Addiction to writing down the shit you notice.
Find/replace patterns for “shit” and you’ve got a fancy academic definition.