Tag Archives: globalization

Globalization relies on pallets

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Tom Vanderbilt exposes the hidden workhorse of globalization: the humble pallet.

And yet pallets are arguably as integral to globalization as containers. For an invisible object, they are everywhere: There are said to be billions circulating through global supply chain (2 billion in the United States alone). Some 80 percent of all U.S. commerce is carried on pallets. So widespread is their use that they account for, according to one estimate, more than 46 percent of total U.S. hardwood lumber production.

Companies like Ikea have literally designed products around pallets: Its “Bang” mug, notes Colin White in his book Strategic Management, has had three redesigns, each done not for aesthetics but to ensure that more mugs would fit on a pallet (not to mention in a customer’s cupboard). After the changes, it was possible to fit 2,204 mugs on a pallet, rather than the original 864, which created a 60 percent reduction in shipping costs. There is a whole science of “pallet cube optimization,” a kind of Tetris for packaging; and an associated engineering, filled with analyses of “pallet overhang” (stacking cartons so they hang over the edge of the pallet, resulting in losses of carton strength) and efforts to reduce “pallet gaps” (too much spacing between deckboards). The “pallet loading problem,”—or the question of how to fit the most boxes onto a single pallet—is a common operations research thought exercise…

As USDA Forest Service researchers Gilbert P. Dempsey and David G. Martens noted in a conference paper, two factors led to the real rise of the pallet. The first was the 1937 invention of gas-powered forklift trucks, which “allowed goods to be moved, stacked, and stored with extraordinary speed and versatility.”

The second factor in the rise of the pallet was World War II. Logistics—the “Big ‘L’,” as one history puts it—is the secret story behind any successful military campaign, and pallets played a large role in the extraordinary supply efforts in the world’s first truly global war. As one historian, quoted by Rick Le Blanc in Pallet Enterprise, notes, “the use of the forklift trucks and pallets was the most significant and revolutionary storage development of the war.” Tens of millions of pallets were employed—particularly in the Pacific campaigns, with their elongated supply lines. Looking to improve turnaround times for materials handling, a Navy Supply Corps officer named Norman Cahners—who would go on to found the publishing giant of the same name—invented the “four-way pallet.” This relatively minor refinement, which featured notches cut in the side so that forklifts could pick up pallets from any direction, doubled material-handling productivity per man. If there’s a Silver Star for optimization, it belongs to Cahners.

I will attest to the importance of pallets from my two summers spent working in a book publisher’s warehouse. The second summer, much of my work day consisted of loading boxes onto pallets, driving the forklift with the pallet to an unloading area, and then unloading the boxes so that workers along the line could start the books moving down the line to what would become packed boxes. Without pallets, I have trouble imagining how so many boxes of books could have been moved.

This did raise some other questions for me:

1. How much money can be made manufacturing pallets? Clearly the world needs a lot of pallets…

2. How many pallets become unusable each year and what happens to these pallets?

3. Do people like products that are specifically designed for better packing on a pallet, like Costco’s rectangular milk containers?

h/t Instapundit

A sociologist on the iPhone at 5: “There has been no other device that has changed social and technological life in such a short time”

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The iPhone just turned five years old and a sociologist makes some big claims about the impact of the device:

“There has been no other device that has changed social and technological life in such a short time,” said Clifford Nass, a Stanford University sociologist and psychologist who studies how technology impacts society. “There has been nothing like it in the world.”

This is a bold claim. I assume this primarily about the time period: important technology today has the ability to make rapid changes. This is one of the defining features of today’s globalization: stuff happens and spreads quickly. The iPhone itself is influential but it quickly led to other changes and pushed Android and other phone makers as well. I can admit that the smartphone world has some advantages.

At the same time, I wonder if this claim is too much. Looking at the broad sweep of human history, how does the iPhone stack up? What about the printing press, the plow, the steam engine, and so on? These devices may not have had such a quick effect but these led or contributed to whole eras like the Renaissance, the Agricultural Revolution, and the Industrial Revolution. Will we look back in fifty or one hundred years and see the iPhone as a similar singular device or is it part of the computer-age process?

The rise of “Seven Nation Army” to sports folk song

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Deadspin has the story of how the song “Seven Nation Army” became ubiquitous at sporting events around the world. Here are a few of the important steps in the rise of the song:

The march toward musical empire began on Oct. 22, 2003, in a bar in Milan, Italy, 4,300 miles away from Detroit. Fans of Club Brugge K.V., in town for their team’s group-stage UEFA Champions League clash against European giant A.C. Milan, gathered to knock back some pre-match beers. Over a stereo blared seven notes: Da…da-DA-da da DAAH DAAH, the signature riff of a minor American hit song…

But in Milan, at the beginning, it was purely spontaneous and local. Kickoff was coming. The visiting Belgians moved out into the city center, still singing. They kept chanting it in the stands of the San Siro—Oh…oh-OH-oh oh OHH OHH—as Peruvian striker Andres Mendoza stunned Milan with a goal in the 33rd minute and Brugge made it hold up for a shocking 1-0 upset. Filing out of the stadium, they continued to belt it out.

The song traveled back to Belgium with them, and the Brugge crowd began singing it at home games. The club itself eventually started blasting “Seven Nation Army” through the stadium speakers after goals.

Then, on Feb. 15, 2006, Club Brugge hosted A.S. Roma in a UEFA Cup match. The visitors won, 2-1, and the Roma supporters apparently picked up the song from their hosts…

“Seven Nation Army” made a beachhead in American sports in State College, Penn. According to a 2006 story in the Harrisburg Patriot-News, Penn State spokesperson Guido D’Elia—who is still the director of communications and branding for the embattled football program—was inspired by hearing a Public Radio International story about A.S. Roma’s use of the song. D’Elia, who also introduced the now unavoidable German techno track “Kernkraft 400” to Nittany Lions fans, had found something new…

By the middle of the 2006 season, “Seven Nation Army” was a Beaver Stadium staple. (This year, as Penn State students gathered on Nov. 8 outside the university administration building, they began singing Joe Paterno’s first name over the riff.)

Is this what globalization looks like? The song was recorded by Americans, found its way into bars and soccer stadiums in Belgium and Italy, and then back to the United States as a marching band piece. Along the way, the song crossed national and language boundaries as well as musical instruments.

I bet there could be some interesting musical analysis regarding why this song has become so popular. It doesn’t require words to be sung, particularly helpful for large crowds of (rowdy?) people at sporting events. It only includes seven notes. It has a particular minor edge to it, described in this story as a sound of “doom” which is no doubt helpful in celebrations as the scoring team’s fans want to celebrate as well as taunt the other side.

I would be interested to know how much in royalties Jack White is getting from all of these plays…

Quick Review: Boomerang

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Michael Lewis’s latest book, Boomerang, gives the current economic crisis some international context. In an entertaining and somewhat breezy manner, Lewis investigates why countries as disparate as Iceland, Greece, Germany, and the United States all fell into the economic mess. Here are a few thoughts about his take:

1. My overwhelming thought about Lewis’s explanations is that he wants to delve into different cultural approaches to the world of finance. Lewis’s argument goes like this: even though these countries have very different histories and cultural mindsets, somehow they all got involved with bad debt in the 2000s. This same topic could spark a fascinating economic sociology or cultural sociology manuscript.

2. Unfortunately, Lewis either doesn’t have much time to spend with each country (he admits the book began as he was working on understanding the US system, which became The Big Short or he doesn’t want to delve deeply into his thin arguments. For example, in Germany he tries to tie their fondness for following rules (which means Germans were the last people to be being disastrous American CDOs) to their fondness for scatalogical humor (which Lewis bases on one anthropological study). While there is a lot of potential here for showing how different cultures can be tied together by a global finance market, Lewis needs a lot more evidence to construct a convincing argument.

3. I found the last chapter to be both exhilarating and depressing. Lewis comes back to the United States in the final chapter and describes how this could all play out. Here is what Lewis suggests: while the centralized governments of Europe struggle, the problem in the US is pushed down the road because the federal government can push off more and more obligations on state and local governments. If this plays out as Lewis suggests (though there is debate over whether it will be as bad as Meredith Whitney suggested), local governments will continue to feel the pain of the economic crisis for years to come and the results may not be pretty.

Summary: I think Lewis is on to something here but I would like to see the topic covered with more depth and include more research.

Why paying off all of the American debt in the early 2000s might have caused problems

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Many people would suggest that the United States needs to tackle its growing debt problem. But a government report from the early 2000s suggests that paying off all the debt could have some negative consequences:

If the U.S. paid off its debt there would be no more U.S. Treasury bonds in the world…

But the U.S. has been issuing bonds for so long, and the bonds are seen as so safe, that much of the world has come to depend on them. The U.S. Treasury bond is a pillar of the global economy.

Banks buy hundreds of billions of dollars’ worth, because they’re a safe place to park money.

Mortgage rates are tied to the interest rate on U.S. treasury bonds.

The Federal Reserve — our central bank — buys and sells Treasury bonds all the time, in an effort to keep the economy on track.

If Treasury bonds disappeared, would the world unravel? Would it adjust somehow?

“I probably thought about this piece easily 16 hours a day, and it took me a long time to even start writing it,” says Jason Seligman, the economist who wrote most of the report…

In the end, Seligman concluded it was a good idea to pay down the debt — but not to pay it off entirely.

So which party or movement would support this? Would it be best to have a more flexible debt (small to large depending on the more immediate economic circumstances) or would it be better to have a more stable, small amount of debt?

I don’t know the intricacies of how this might all play out but it is a reminder of the globalization of finance: doing something that might be viewed as desirable in the United States would not only affect other sectors of American life but how other countries can operate. It would be interesting to know how we got to this point. Does every major country basically have some debt that other countries are counting on?

Bill Clinton: “The American Dream has been under assault for 30 years”

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Former President Bill Clinton, speaking as part of the 10 year anniversary of his foundation, said “The American Dream has been under assault for 30 years.” He says this has happened for two (actually three?) reasons:

1. The challenges of globalization and the information age “which eliminated a lot of intermediate jobs.”

2. Corporations once had more equal responsibility among shareholders, communities, and workers (roughly 35-40 years ago and earlier) whereas today they act as individuals only beholden to shareholders.

3. A thirty year long anti-government rant that says “the government is the source of all our problems.”

Is this just a list of Democratic Party talking points?

More seriously, Clinton’s first point is well accepted: the world has changed. Globalization and information have changed the American and global economy and America is still struggling to catch up. The Rust Belt cities of the Northeast and Midwest are a great example: the departure of good-paying manufacturing jobs has shifted the landscape and cities and states are still scrambling to fill this void. The second issue regarding corporations is also notable: the quest for profits and meeting shareholder’s expectations has seemed to increase. The gap between CEO pay and that of the average worker has only widened. The median income for all Americans has dropped while some corporations earn record profits. The third point sounds more like a political argument though Clinton’s suggestion that there has been a relative lack of interest in public-private partnerships to address some of these issues may have some merit.

Clinton is in a long line of presidents who have promoted the American Dream which is typically thought to include homeownership, a good education, and middle-class standard of living. It would be interesting to hear what Clinton now considers to be the American Dream to be and how individuals and the country can achieve it. A measure of the American dream, homeownership, actually had increased in the last 30 years until the last few years of economic crisis. Is Clinton suggesting that fewer people now have access to the American Dream or something else?

Additionally, Clinton’s words have some sway since the public perception is that he was the president who presided over the last boom era in the United States.

The growing field of the “sociology of disasters”

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Inside Higher Ed features a growing subfield of sociology: the sociology of disasters.

When a hurricane or earthquake strikes, a small group of unusual first responders is at the ready: sociologists.

In the past two decades, the ranks of researchers who study disasters, natural and otherwise, have seen their numbers swell. In the wake of a tornado or a hurricane — or an oil spill or terrorist attack — these sociologists examine how traditional areas of inquiry, such as issues related to race, gender or social class, unfold in extreme situations.

“They are a really unique opportunity to understand our social world,” said Alice Fothergill, an associate professor of sociology at the University of Vermont, of disasters, which she described as a more extreme version of everyday life. “Whatever the behavior is, it’s more exaggerated or sped up in time. There are all these ways in which people are finding that it’s this valuable setting, where people are finding that they have insights that they might not have during non-disaster times.”

Interest among sociologists in researching disasters and their aftermath increased after Hurricane Andrew struck South Florida in 1992. But it spiked even more after the Sept. 11 terrorist attacks and especially Hurricane Katrina, which is widely credited with drawing more attention to the racial and socioeconomic aspects of a disaster’s impact. Many argued that the black citizens of New Orleans have had a more difficult time getting support — and that the city that is emerging is less hospitable to them.

The article suggests this is a relatively recent development; why is this the case? Disasters, natural or manmade, are not restricted to the past few decades. Could it be tied to globalization which means that we all receive news and images quickly whenever any disaster happens pretty much anywhere in the world? Disasters do tend to make good (read: entertaining/engrossing) news and now they seem to have wider emotional impact. Could it be tied to the growing number of resources that are spent each year by governments and other organizations in response to disasters? Perhaps more than ever more, the “correct” response now matters in terms of public opinion and using resources wisely.

The rise of granite countertops from a sociology of culture perspective

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Homebuyers today seem to want certain features in a new home: stainless steel appliances, updated bathrooms, and granite countertops. But how exactly did the granite countertops become so popular?

Granite is relatively new to the kitchen counter; back in 1987, it was pretty much available in only two colours, it was incredibly expensive and was not even considered good counter material because of its lack of resilience. Yet in less than a decade, it went from being luxurious to ubiquitous- it is in every new condo and apartment regardless of price. It became the cherry on top of the McMansion sundae. The price dropped so far and so fast that one can now order it online in Florida for $19.95 per square foot, almost as cheap as a laminate counter. (Although at the time of this writing no doubt there is a significant oversupply in Florida.)

Here is why it became so cheap: “it got globalized…containerized…computerized.” Here are a few details about these:

Granite used to be a very local business- if you lived in the Northeast you got it from Vermont, in the midwest from Minnesota, in eastern Canada from Quebec. It is heavy stuff, and the main market was architectural stone, cut by craftsmen to exacting specifications for the commercial building industry. Taking it out of the ground was dangerous work; granite quarries were often ecological nightmares. However the industry provided a local material, and well-paying skilled jobs…

But granite is found all over the world, and it is cheaper to dig it out in India and Brazil. The environmental standards are not quite as high either…

Unlike architectural stone used on the exterior of buildings, the stone for counters and floors is a uniform 3/4″ thick. By cutting the stone on site the flawed slabs can be separated before they are shipped, and can even be processed further into tiles, so that there is less transport of waste. Once sliced into the new standard, the 3/4 inch thick slab, it can be put into the standard solution for transport, the shipping container. So what if most of the container is full of air, the cost of shipping is more than compensated for by the low cost of the material. Suddenly granite was no longer just available in two colours, but in dozens…

Where cutting granite used to be a skilled craft working in three dimensions, as counters it became a simple matter of cutting the slabs in two dimensions. Often the slabs would be shipped from India or Brazil to shops in China with finishing and edging equipment. Now a kitchen designer in Toronto might send a CAD file to the shop in China where a computerized saw cuts the Indian granite into a countertop, which is then put into a container and shipped to Toronto and installed in a condo.

On one hand, someone could argue that Americans have developed a taste for granite and have made individual choices to have it in their homes. Americans became fed up with their old counter options, like Formica, Corian, or tile. They developed finer tastes and wanted to show off their kitchens.

On the other hand, one could utilize the production approach in the sociology of culture. Granite became an aesthetic choice because of technological change: it has become cheaper and easier to create and install. Through the process of globalization, granite became a better option for American consumers looking for a more durable and flashier surface. Perhaps granite became cheaper because there was some demand for it but Americans didn’t simply choose granite – it was a choice made for them.

It would be interesting to see figures that would show when homebuyers started looking for granite over other surfaces. And who had it first?

Translating Ritzer for Iranian audiences

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An Iranian translator says he will translate sociologist George Ritzer’s theory textbook into Persian:

Iranian author and translator of sociology works said that he will release two translations of American sociologist George Ritzer in Iran and added that he has decided to translate a book in the field of “Social work” as well as “Sociology in the internet era”…

Dr. Khalil Mirzaee told IBNA that one of the books which he has translated is George Ritzer’s “Contemporary Sociological Theory and Its Classical Roots” which had been previously converted into Persian as well. The inappropriate Persian equivalents encouraged me to re-translate the book, he added.

He said that George Ritzer reviews his works once in every four years which include omitting some theories as well as adding new theories.

It is interesting to hear how a common textbook is being used in other countries. But I wonder how this relates to news from last year that the Iranian government wanted to review sociology departments (among others) because of Western influences. Ritzer’s theory books are mainly about European and American theorists but Ritzer’s own ideas about globalization might also be of interest to both scholars and the government.

Can anyone stop globalization?

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In the middle of a story about politics within a troubled world economy, sociologist Zygmunt Bauman poses an interesting question:

“The big question is whether any political force is capable of stemming the tides of globalisation – of capital, trade, finance, industry, criminality, drugs and weapon trafficking, terrorism, and the migration of the victims of all these forces,” writes the eminent sociologist Zygmunt Bauman, who has spearheaded much of the thinking in this area. “While having at their disposal solely the means of a single state.”

This highlights two key features of globalization:

1. It is much bigger than any single state, even though there might be winners and losers, posed as the United States and Haiti, respectively, in this article. Without close cooperation between nations or a binding and/or effective international authority, the issues Baumun cites are difficult to deal with.

2. Of course, I can imagine some asking whether globalization should be stopped at all. But, Bauman also provides a reminder that globalization includes the spread of negatives as well as positives.