Context : SupplyChain

DanielDavies on class as the distribution of risk : http://d-squareddigest.blogspot.com/20030601d-squareddigestarchive.html#95374899

Reminds me also of a recent talk by BeritAas criticising "just in time" as a way of exploiting home based labour. In general "just in time" pushes risk back up the supply chain. Instead of agents further down the chain handling risk by storing a surplus (which may perish or go out of date), they replace these stores with more sophisticated information networks to manage suppliers who can supply what's needed "on tap". In effect, the cost of risk is pushed up to the suppliers.

Update 2017 : Experience on ZeroHoursContracts https://www.theguardian.com/commentisfree/2017/jul/14/zero-hours-workers-taylor-review-gig-economy-flexible-contracts

Push risk far enough back and it is pushed to the ultimate suppliers ... the workers. Casualized labour is on an "as and when" needed basis.

Discussion

Hold on, workers are also the most (potentially) versitile and adaptable resource within the whole resource chain ... so easiest to re-deploy to the most useful labour at any given moment in time. The (potentially) great thing about 'just in time' is that it enables a manufacturing process to only make as many of a good as is needed - rather than producing excess that will have to be wastefully destroyed.

Ultimately it's much better to hold the steel in steel blocks for as long as possible ... rather than fashioning it into products too eagerly !!

The bad thing is the way in which this could lead to worker's income insecurity. This is a related problem, but one that should be solved in other ways. I think there are a lot of important social problems that efficient manufacturing processes bestow onto society to solve.

One (longer term) approach to this could be to make a closer relationship between the benefit system and part time working. Ideally people could switch between receiving benefits and working very quickly .. back and forth. One week on benefits the next if Factory A, next Factory B, next benefits ... etc..etc. You would aim to skill people with multiple skills and make the job market more efficient by use of IT. Through benefits you would assure a baseline living standard that could be depended on, but work should (indeed would have to) pay better than benefits, so it would always be better to do some work for a company than not to.

But, beware any ludite solution !! Efficient production must surely be a good thing.

OliSharpe

"Hold on, workers are also the most (potentially) versitile and adaptable resource within the whole resource chain ..."

What an extra-ordinary claim to make. As if it's easier for a skilled vet in Brazil to retrain to be graphic designer than it is to rejig a production line in Detroit. It's not even that the reverse is true. More interestingly, it is the new flexibilities downstream : on the production-lines, in the retail channels, amongst the consumers etc. which creates the possibility of, and thus the demand for, more flexibility upstream. In other words, only because the rest of the process is so flexible is the uncertainty displaced backwards.

"Ultimately it's much better to hold the steel in steel blocks for as long as possible ... rather than fashioning it into products too eagerly !!"

That's true. And it's the original conception of supply-chain management. But the idea has spiraled from there.

"The bad thing is the way in which this could lead to worker's income insecurity. "

You make this sound like a kind of outside possibility we should be careful of. I think this is already happening, and one of the most impactful and defining economic transformations going on at the moment. World-wide.

"This is a related problem, but one that should be solved in other ways. I think there are a lot of important social problems that efficient manufacturing processes bestow onto society to solve. "*

The social problem here is this : a technology exists which enables one group of people to shift risk onto another group of people.

We could solve that in two ways :

  • Create more technology which shifts the risk back ... (eg. :
    • enable workers to organize themselves better - WiredTradeUnionism;
    • use the information technology to send more messages from the workers back to the consumers, to help the consumer understand better and make more ethical buying decisions - TheWebCamInTheFactory)
  • through social / political pressure to counteract it eg. more government constraints on employers, capital flow, and protection of worker's rights : Sure, you can stop making widget X and start making widget Y, but you share-holders have to shoulder some of the cost by paying your work-force to retrain rather than just switching to suppliers in another country.

"One (longer term) approach to this could be to make a closer relationship between the benefit system and part time working. Ideally people could switch between receiving benefits and working very quickly .. back and forth. One week on benefits the next in Factory A, next Factory B, next benefits ... etc..etc. You would aim to skill people with multiple skills and make the job market more efficient by use of IT. Through benefits you would assure a baseline living standard that could be depended on, but work should (indeed would have to) pay better than benefits, so it would always be better to do some work for a company than not to. "

Well, I agree with the broad strategy. And making benefit / casual work more closely related. I'm even in favour of the government replacing benefit with some sort of socially useful workfare scheme. (Caveat : As long as this leaves space for the unemployed to apply for and try to get "real" jobs; and isn't just the government paying to subsidize labour for employers, with fewer rights.)

But I also think you have to be careful of assuming what I criticise in BlairiteEducationPolicy : that the mismatch between the demands of capital and needs of society is all the fault of mis-skilled workers. That's just not true. There are other causes of market-failure (failures of information, monopolies and ologopolies seeking rents, sheeplike irrational exuberance from investors, capital demanding intolerable heroics from labour, etc.)

"But, beware any Luddite solution !! Efficient production must surely be a good thing."

All other things being equal, it's a good thing. But when, ever, are all other things equal? ;-)

And I don't think pointing out problems that arise from a technology, or demanding solutions to those problems, is automatically classifiable as Luddite.

PhilJones