White house suggestions to reduce supply chain congestion

Posted on February 24, 2022 by aviyer2010

An article in the Wall Street Journal (February 24, 2022), titled “White House Lays Out Broad Changes to Address Supply-Chain Shortfalls” , describes several initiatives short, medium and long term,to deal with global container flows. In the short run, eliminating the existing rule that prevents overtime payments for drivers, to increase truck availability. In the medium term, adjusting global containers to accommodate US domestic container sizes. In the long term, increase the number of US ports who can handle the larger ships. How should the cost to implement these changes be allocated back to
beneficiaries, a shared tax or other? Will reducing the cost to import slow reshoring of manufacturing ?

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Organic Cotton certification fraud

Posted on February 24, 2022 by aviyer2010

An article in the New York Times ( February 13, 2022) titled “That Organic Cotton T-Shirt May Not Be as Organic as You Think”, describes the certification challenges for organic cotton in India. Despite commanding $ 25 to $ 46 for Michael Kors hoodi e and Urban Outfitters sweatpants, the yield for organic cotton is 28% lower, and the cotton prices not adequately higher, thus making farmers  worse off . With international certifying agencies using local auditors often paid by suppliers, fraud is rampant. Who should be held responsible, the international auditing agencies or manufacturers? Is cancelling use of certified organic claims, as Eileen Fisher did, the solution? How should cotton farmers be protected from the lower yield related cost?

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Managing small firm supply chain pressures

Posted on February 22, 2022 by aviyer2010

A Wall Street Journal article (February 22, 2022) titled “Worried About Inflation and Supply Constraints? Try Being a Small Business”, describes the longer supply lead times, how higher prices and higher demand, yet lower bank credit access. The article claims that larger firms such as Honeywell and UPS, are able to raise prices, but smaller firms worry about long term demand impact. With pressures to increase wage rates to get labor, should a focus on profitability justify giving up on some demand growth? Will investments in technology to increase productivity be more justified in this context ? Is now the time to rethink product mix and processes to improve performance?

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Robots support staff, increase throughout, despite fewer employees at a restaurant

Posted on September 15, 2021 by aviyer2010

An article in CNN.com (September 8,2021) titled “Robots are picking up unwanted jobs at a Latin restaurant in Texas”, describes a mobile robot with an iPad that greets customers, takes them to the assigned tables and carries the food for the wait staff, and cost $15/day. The result is an increase of 50 to 100% in volume, with a third less staff, who like the assistance of the robot. Will automation in the form of assistive robots become the norm even after the pandemic, and will it permit restaurants to increase pay for their staff while remaining profitable ? How should the robots be configured to generate both efficiency and increased customer satisfaction ? Should the robots be reprogrammable to match the preferences of the wait staff to increase their return on investment ?

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Covid oxygen crisis and managing oxygen tank refills

Posted on August 30, 2021 by aviyer2010

An article published in CNN.com titled “Hospitals in the South face oxygen shortage as Covid Crisis Worsens” (August 29, 2021), describes the challenges of keeping oxygen tanks resupplied. Normally, tanks are described as starting at 90% of capacity, and suppliers would plan to refill when the tank drops to 30%, thus providing them three to five days to refill before the tank runs out. In the current crisis, tanks are being filled up to 50%, and suppliers are waiting to start planning refills when tanks get down to 20%, a one to two day supply. Why is such a lower reorder level and a lower fill-up-to optimal ? Since demand is high, will transportation costs and the need to visit hospitals more frequently create more risk ? Should more local warehousing of oxygen tanks be permitted to reduce oxygen shortage risk?

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Supply Bottlenecks at Catrike, an adult tricycle manufacturer

Posted on August 25, 2021 by aviyer2010

An article in the New York Times titled “What an Adult Tricycle says about the world’s bottleneck problems” (August 23, 2021) describes the 500 adult bikes, and $ 2 million in inventory, waiting for a $30 derailleurs from a Taiwanese supplier at Catrike, an adult bicycle manufacturer in Orlando, Florida. The article shows lead times growing from 59 to 87 days from Indonesia to Orlando, container costs increasing by a factor of 5, and supply chain participants hesitant to increase prices. What options do manufacturers have to maintain revenues and ship products in the face of these challenges ? Would 3D printing finally have its breakthrough and see increased adoption ? Should services that redesign products to adjust to available supply see increased adoption ?

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Can logistics assist in dealing with volatility and uncertainty ?

Posted on August 19, 2021 by aviyer2010

An article in American Global Logistics titled “The Logistics Industry in 2021: Using strategy to deal with volatility and uncertainty” (December 11, 2020) describes adaptability, responsiveness and resilience as key features of logistics systems, enabling “adapting to winning”. The article suggests form supply chain partnerships, flexible fulfillment, supply chain diversification and a focus on business continuity. How should logistics systems deliver these capabilities while also remaining cost competitive ? Should logistics systems have multiple versions that synchronize with customer willingness to pay ? How should performance metrics adjust to encourage such strategies ?

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Amazon’s The Drop and associated supply chains

Posted on August 19, 2021 by aviyer2010

Amazon’s website “The Drop” describes its process as consisting of collections that are available for 30 hours, are designed by influencers and inspired by street trends. Their limited availability reflects supply constraints based on fabric availability. But the limited availability also creates a rush to buy immediately. How would you plan supply to meet an unknown demand ? Would Amazon be better off to have a lower fill rate to create a sense of urgency to purchase i.e., is it a case of build and they shall not come ? Should the apparel be built in advance of demand, with inventory being used to satisfy demand, or should these products be made to order with a longer fulfillment lead time ?

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Identifying demand for ugly produce not accepted by retailers

Posted on August 19, 2021 by aviyer2010

An article in the Atlantic titled “The Murky Ethics of the Ugly-produce business” (January 25, 2019) describes platforms such as Misfits Market and Imperfect Produce that delivers to customers who both are ready to accept the misshapen fruit, care about reducing food waste and get the benefit of up to 40% lower cost, and get home delivery. But to ensure customer orders are filled, platforms sometimes also use distributors as a source. Given the impact of such platforms on reducing food waste, should they be awarded carbon credits ? If ugly produce were not sold to customers, would they be wasted or used for products such as sauces ? Should retailers accept the produce despite its shape and thus avoid the need for such secondary platforms ?

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US Food Supply Chain Disruptions due to the pandemic

Posted on August 19, 2021 by aviyer2010

An article in the McKinsey & Co website titled “US Food Supply Chains: Disruptions and implications from Covid-19” describes the shift in the mix between grocery and food service to serve the US population. With grocery moving from 56% to 73% of the total food spending, distribution systems were impacted and food insecurity issues magnified. The impacts are faced by grocery retailers, distributors, farmers and restaurants. How should each of these supply chain entities plan to synchronize with demand changes ? How can shortages be averted by leveraging customer demand flexibility ? How can virus transmission rates and associated impacts be incorporated into supply chain planning ?

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