Saturday 2 October 2021

Supply chains, pigs and Dominic Cummings

Of all the issues I thought Brexit would raise, I confess that labour shortages was not high on the list. Yet it is becoming ever more apparent that at the moment, it's easily the most crucial issue facing this country. It has been a slow burning thing which now threatens to overwhelm the government. Army drivers will soon begin delivering fuel to filling stations after a spate of panic buying has caused many to run out.

Bringing in the army is a sign of panic and is at best a bit of PR since a hundred drivers is not likely to even scratch the surface of the problem.  It is like using an eyedropper to bail out the Titanic.

I note on Twitter that motorway stations are badly affected although they were being prioritised. This is only going to make a bad supply chain situation worse. How can stuff get delivered if you haven’t got drivers and now fuel is difficult to obtain?

There are of course factors other than Brexit involved in the truck driver shortage but it is a significant, if not the main cause.

A reader has been in touch about the shocking position the pig industry finds itself in. This was highlighted on BBC Newsnight last night. With labour shortages in abattoirs and a lack of butchers in the food processing business, pigs that should have gone to market remain on farms long after they should have gone to market.

Farmers are faced with rising feed costs due to compounders having to source bulk cereal ingredients at higher world prices after Brexit, plus animals which need feeding longer and now may not even be saleable because they are too big. It is a perfect storm and for many an existential threat.

Around 150,000 pigs may need to be culled and sent for animal feed or to be rendered for fat in the next few days, at much reduced value meaning lower incomes and probably fewer farmers. It will no doubt also have a knock-on effect next year too and perhaps for years ahead.

Britain is learning a terrible lesson about the complexity, interconnectedness and essential fragility of supply chains that have taken years to develop. The things - food as well as many other basics - that we need appear magically on supermarket shelves in perfect condition just when we want but the planning often begins months, sometimes years, before.

Farming is perhaps the best example. Breeding and crop planting programmes are not done overnight and cannot be easily rejigged. Upsetting the capacity of one strand of the chain ripples through the rest and results in disruption and shortages in unexpected places. This winter is going to be very difficult I think for everyone, but especially those whose livelihoods are threatened.

The folly was in rejecting any sort of transition period, springing massive changes on British industry overnight on 1 January and somehow expecting everything to work out. It is akin to trying to replace the wiring harness on your car as you're driving along and not expecting a few issues.

Amid the mounting chaos (and other countries are looking at us with increasing bewilderment) the 'mastermind' behind much of it has taken to writing rambling pieces on Substack, a platform which allows writers to send digital newsletters directly to their readers and monetise their work by putting it behind a paywall. 

Dominic Cummings thinks people are prepared to pay for his thoughts, but clearly not many are, or not enough anyway, since his latest missive is available free, presumably its on special offer to tempt more of us to cough up some money. It is 8,589 words, not of wisdom but of incomprehensible, staccato tripe interspersed with quotes by people ranging from Thucydides III to Balaji Srinivasan who describes himself as "an angel investor and entrepreneur" whatever that is.

The title of it is: Regime Change #2: A plea to Silicon Valley - start a project NOW to write the plan for the next GOP candidate.

It is a rant about how political parties are self serving and how politicians think the government controls the government when it doesn't and anybody who tries to change this (i.e him) is seen as the enemy by the bureaucracies that actually control things. 

Having been fired by Johnson (being fired by him is I suppose a mark of supreme incompetence) he now sets his sights on putting the USA on the right path. Trump cannot be allowed to win in 2024 and Biden is "useless" so he can't be allowed to either, Karmala Harris would be worse.  So, both parties need different candidates. 

He offers this advice:

"First, high performance execution in complex operations requires a constant process of simplification, of stripping out unnecessary/foolish requirements and processes, of stopping things to simplify and focus efforts on priorities. Look at Steve Jobs’ relentless efforts, look at how Elon Musk runs SpaceX/Starbase and Tesla.

"Second, turning around failing organisations is incredibly difficult even for very talented people and it’s often 100 times easier to close X and start something new than try to ‘reform X’.

"Don’t believe me? Listen to the world’s most successful investors:

I’d say the history that Charlie [Munger] and I have had of persuading decent, intelligent people who we thought were doing unintelligent things to change their course of action has been poor… We really don’t believe in buying into organisations to change them. (Warren Buffett)

"Third, high performance execution in complex operations requires combining responsibility and authority but by design government bureaucracies separate them, which guarantees delays, chaos and waste."

If, like me, you are a baby boomer or of that sort of era, you will be used to political figures of substance and gravitas and advisers of similar character. Men and women who were careful with what they said, solid, calm, measured, patient and clever. Cummings is none of these things although he thinks he's very smart.

As for bureaucracies guaranteeing "delays, chaos and waste" he shouldn't be so hard on himself, he has done rather well on that score. 

I assume he means the civil service has given us Brexit and that it would be even worse had he and Johnson not been there to supervise it.