So I just picked up some wood shims for a project I am working on and
was greatly suprised to see where they are made. Though I guess I
shouldn't be... China!
Why the hell does Home Depot need to be using China to supply wood
shims to it? I have a pretty good understanding of economics and
business, yet I am still baffled by the fact that we have even
outsourced WOOD SHIMS to China! I know Steel is cheap over there and
so it the labor, but wood shims?! Come on!
Even the friggen 2x4's I bought are from China. How the hell as a
country have we come to relying on China to supply us basic building
I am just disgusted by this...
Those in this country that used to make shims have learned that letting the
government pay for every thing and not have to work, pays better than making
shims. Apparently making shims is now beneath the lowest wage worker and he
would rather let the government support him.
Before you know it an illegal that cuts your yard will be on welfare and not
cutting your yard.
More to the point, those who would hire minimum wage labor to make
shims have found out China has a labor cost 1/40 US wages.
We must offer products with high value add labor content if we are to
compete in the global market.
One of the basic problems with "the belt" economy.
Heavy industry, but not very high tech.
I watched my customers shudder their doors right before my eyes
starting in the late 70's and it continues to advance to this day.
It is not the minimum wage people who create the problem, but their
ranks increase because of it.
I like that - "little sissy packs of shims". Well thats all I needed
and should need for awhile! :)
I just am sadend by it all I guess. Using foreign made (from a not so
friendly country) products to build stuff just bothers me. We have
really no choices though any more.
I plan on buying a jointer soon and I don't think there is a single
one that I know of that is made in the US that is a 6" inch model.
I'm surprised that you are surprised. The world is now a global market and
everyone buys from the lowest cost producer. The rich western countries have
almost given up on manufacturing and make their money from services.
While I agree with you, and understand the ecocomics, I'm just hoping
against hope that I'm such a dumb shit that I simply can't grasp how it is
NOT the end of our heretofore vital middle class.
My wife has been harping on this particular subject, the loss of the
middle class, for five years; in the past four, I've come to agree
with her. As things presently stand, the U.S. middle class will
disappear, soon rather than late.
We are hiring Colombians to do our logging, then shipping the logs to
China (or somewhere similar), where it becomes plywood and boards,
which are then shipped back to us.
Yes, 1/40th the labor cost, but how come the transport is cheap enough
to cover two trips, and still pay a profit to each participant? Sure,
we're becoming a service economy, or have become a service economy, to
be more accurate, but at some point, an economy needs to move on more
than an insurance policy, a sales commission, a clerk's salary....
Something REAL has to be produced or all these hotshot real estate
sales types will be in hot dodo...oh, wait! Many of them are. As are
many others, all the while we have a President who says we're not in a
recession, our local plants--the ones left--including Volvo over in
Dublin, VA, are pretty much shut down, at least temporarily and the
biggest sources of jobs seem to JiffyLube and McDonald's.
We do have an excellent label design and printing company here in
Bedford, and that's growing...food product labels. But my next book
will be printed in China, and I'd bet that any photo illustrated book
any of you have bought in the past few years has been printed there. I
made a mistake on that this morning: my wife bought a book at a VA
book sale for a four year old; it was printed in Indonesia, not China.
But the second one she bought was printed in China.
Two (2) things are at work that may not be evident to the casual
1) Time cost of money.
2) Just in time delivery.
The goods in those containers in some cases are owned by the shipper
until delivered rather than FOB, point of shipment, where ownership
transfers as soon as it clears the shipping dock, thus cost of
ownership (time cost of money) is born by the shipper rather than the
All those containers of goods moving around the country eliminate the
need for warehouses and the associated costs.
The cost benefits are not just simply low cost labor.
Well, that's not how it works in the woodworking machinery business
Respectfully beg to differ with you Lew, All those containers moving
around the country cause you to need more warehouse space. You don't
distribute from a container, you distribute from a distribution
Tupelo factory shipped industrial woodworking machinery to a warehouse
in Memphis, where it was picked and shipped to distributors. Assembly
lines were on a JIT flow basis so factory lead time on any item was
very short usually less than 30 day and many items less than a couple
of days. Model changes could be handled on the fly on asssembly
lines when demand changed. Feedback on what was sold today could be
factored into what was produced tommorrow, consequently the amount of
inventory held in the distribution center was very small so not much
Most good US manufacturers have evolved to this point.
Alternatively, the industrial woodworking machinery from the far east
has about a four month minimum lead time, factory, trans to dock, on
the water, on the train or truck from the west coast, and then into
the DC. Model changes consistent with demand can not be anticipated
so the inventory held for all models is much greater. Additionally,
the shipments are always late so safety stock is added to make sure
there are no stock outs, particularly as you approach any peak selling
And once those containors get on your property, you better have the
space to unload them, or you end up paying a per diem on the
And when you anticipate wrong four months out and are facing a
stockout, then you air freight the stuff and take a real bath.
There are no savings on the cost of carrying inventory or the cost of
quality from the far east at least with regard to woodworking
machinery. It is substantially more, factor of four for cost of
carrying inventory and a factor of 2.5 for cost of quality.
It is, in fact fully burdened labor that is cheap.
Agreed; however, rather than a warehouse, it has become a distribution
center which translates in to fewer warehouses required.
Sounds like standard dumurage charges. Same for rail cars, trailers,
etc. AKA: No free lunch.
No question, fully burdened lsbor is the big prize.
My info was acquired as a result of sharing a plane ride with a
computer jock whose primary customer was WalMart a few years ago.
He also indicated they manage their inventory based on the daily store
sales registered at the check out.
As I remember, ".. almost real time" were the words he used to
So much of their inventory appears to be short term items that they
just flush out one model and bring on the next one.
SAme applies to Home Depot and probably Lowes.
Also helps to control liability, returns, warranties, etc.
I'm certain what you described applies to the durable goods industry;
however, most of what I described would not be considered as durable
Either way, we are never going to be able to again compete in the low
tech value add industries again.
Even things like airplanes are coming under fire.
Still remember a comment attributed to Jack Welch while he was still
CEO of GE.
"The lowest cost solution is to build your factories on barges, then
put them as close as possible to the lowest cost labor supply. When a
lower cost supply develops, move the factory."
Unfortunately, that concept is closer than we think.
Some of those realities have already come and gone. The Japanese, for
instance, were able to come across the Pacific, catch fish off
Canadian shores, clean/process/can them on the way back to Japan,
stick the cans in containers and ship them to Canada for less money
than we could it ourselves. They did that for a long time. That kind
of competition is real and fair.
Save The Whales. Collect The Entire Set
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Yes, but...the costs are still there and must be included in product
Aye. Just in time. And that's why we're drowning in tractor-trailer
rigs, and far too many of the Interstates are terrifying to drive on
for a four wheeler. There is ALWAYS a cost: we're paying it in road
construction taxes that primarily benefit trucking companies, and
we're paying it in traffic fatalities because of the extra trucks on
the road. Road construction always lags need, so we're always in a
state of spending to help out companies.
Grad school Economics professor said two things 35 or so years ago
that I remember. The first is that Soviet communisim will fall
without a shot being fired because of the inability of capital to flow
properly in a planned economy. He was right. Certainly there were
shots fired, but they had nothing to do with the ultimate failure
which was an economic failure
Secondly, he said that the only way to have consistent and real
increases in GDP was to base your economy on adding value to things
that are mined or grown. Once you move away from that, you can hide
for a while with service, but it is a zero sum game and eventually
there will be a lowering of standard of living, devaluation of
currency and many things bad. I'm beginning to think he was right
again. Looks like stagflation with little that can be done about it
because we are no longer in the value adding drivers seat.
I can't remember a time in the history of this country when falling US
demand did not also have a corresponding fall in commodity prices,
getting things back in balance. But here we are, with all energy and
basic materials going through the roof with US demand falling daily.
In my little world we have been insulated from the big picture by a
Toyota Assembly plant being built about twenty miles away with
supplier plants popping up all over the region. But the big picture
looks fairly bleak to me.
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