Managing the supply chain when facing “Matcha Madness”

A video posted in the Atlantic (though made by AT&T to showcase its digital capabilities and available at https://www.youtube.com/watch?time_continue=129&v=u_lUD3WHz1s) describes the rush to use matcha as a food ingredient fro beverages, cupcakes and more. With harvests at select periods, volatile demand, mixes of ingredients to make specific products, the digital aspects of the supply chain ensure that the physical product is available as planned where there is demand. Given such viral surges, has food become a fashion product with trends dictating demand ? How can farmers plan for such unforeseen demand surges – will supply contracts move closer to financial instruments as a way to manage demand and supply risk ?

Posted in Capacity, competitiveness, consumer, Cost, delivery, manufacturer, Supply Chain Issues | Tagged , , , | Leave a comment

Tesla’s request to suppliers for assistance and associated impact

An article in the Wall Street Journal (Tuesday, August 21, 2018) titled “Some Suppliers Worry About Tesla” quotes suppliers claiming that Tesla is delaying payments and demanding cash back. They cite that Tesla is now paying production related suppliers 95% on-time, and paying nonproduction suppliers 80% ontime. But Tesla claims that payments delays reflect discussions about the parts delivered. The article claims that Tesla demanded cash back of the order of 9 to 20% from capital equipment suppliers for equipment delivered back in 2016. Do Tesla’s actions reflect normal procurement negotiations between two members of a supply chain or something more serious ? Given that Tesla is expanding the electric vehicle market with novel designs, should this be considered normal ramp-up issues for new products ? At what point should we treat these actions as indicating financial distress at Tesla ?

Posted in Capacity, cash, Collaboration, delivery, Operations Management, product, technology, Tesla | Tagged , , , | 1 Comment

Exporting hurricane damaged “total loss” cars

An article in the Wall Street Journal (April 5, 2018) titled “Hurricane-Damaged Cars Moving Again as U.S. Exports”, describes the disposition of over 600,000 cars declared a “total loss” i.e., whose repair cost would exceed their replacement cost. These cars are sold by insurance companies at auctions and then exported. The result is a 12% increase in export volume of cars shipped via twenty foot containers (at 5 cars per container). These repaired cars then find a new life in overseas markets where they are either salvaged for parts or refurbished for use. The continued weather challenges suggests that this export increase may continue as the supply of damaged cars continues at a rapid pace. Should manufacturers of these vehicles intervene to salvage these vehicles in the US, or let them find their appropriate demand locations ? Should vehicle designs be expected to change to respond to the nature of the weather patterns in coastal regions ?

Posted in Capacity, consumer, Cost, delivery, logistics, manufacturer, ship, Supply Chain Issues, Sustainability | Leave a comment

GE’s program to speed up US Imports through US ports

An article in the Wall Street Journal (March 6, 2018) titled ” GE Units Expands program to speed up U.S. imports through supply chains”, describes GE Transportation’s work with the port of Long Beach in California to speed up imports through the port through use of its GE optimizer software. The software aims to pull data together from ‘shipping companies, port terminal operators, freight railroads and other supply chain layers into a single portal’, thus enabling visibility into shipments two weeks before they arrive. This improved visibility is expected to help coordination and thus better match supply and demand. Should such software be developed as open source elements that can get connected through standard protocols or would it help to have a third party company orchestrate the data connections ? Will emerging blockchain initiatives reduce the need for such centralized software solutions ? How should users be charged for the visibility into their shipments ?

Posted in Capacity, Cost, delivery, Global Contexts, logistics, mgmt5612018, technology | Tagged , , , , , | 61 Comments

Should Kohl’s sell Whole Foods products in it’s stores?

An article in Business Insider (March 2, 2018 http://www.businessinsider.com/kohls-could-help-whole-foods-reach-millions-of-new-customers-2018-3) suggests that an alliance between Kohl’s and Whole Foods may provide a winning combination. Last year, Kohl’s started accepting return products for Amazon. Kohl’s has a network of 1,110 stores in suburban malls, offers a new set of customers, and wants to decrease its retail store footprint, thus this can help Whole Foods reach a new set of customers for its 365 label and help Kohl’s with retail space usage. In addition, Kohl’s has already announced an alliance with Aldi, so this may be a more diverse platform for grocery items. Should Kohl’s focus on Aldi alone and expand that relationship, or build a more custom store location dependent grocery plan, choosing between Aldi and Whole Foods, based on location ? Should these mini Whole Foods locations sell the private label Whole Foods brand along ? How might the ease of transacting with Amazon and the availability of inventory for immediate pickup help expand the Amazon and Kohl’s relationship ?

Posted in Capacity, Collaboration, competitiveness, consumer, Cost, delivery, Ecommerce, retailers, Supply Chain Issues, technology | Tagged , , | Leave a comment

Fingerlings – the miniature monkey toy best seller during the 2017 Holiday season

An article in BBC.COM (http://www.bbc.com/news/world-us-canada-42374523) describes the Fingerling – an animatronic toy made by a Hong Kong based Canadian company, WowWee. The article describes the early launch in the UK and Canada, and an internet buzz on social media that preceded the US launch in August, as stoking the demand explosion in the US. Expansion of production capacity, air lifting product to speed up availability, actions against counterfeiters and modest selling retail prices of around $15 all caused supply chain challenges. Should the company raise prices to moderate demand or let the price increase in after market channels enable the continued product demand buzz ? What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys ? What should stores do to position themselves to have access to inventory of the hit toy each holiday season ?

Posted in Capacity, consumer, Cost, delivery, manufacturer, mgmt5612018, Operations Management, ordering, Prices, Supply Chain Issues, transport | Tagged , , , , , | 21 Comments

Clothing related waste and possible solutions

A report by the Ellen MacArthur Foundation (https://www.ellenmacarthurfoundation.org/assets/downloads/publications/A-New-Textiles-Economy_Full-Report_Updated_1-12-17.pdf) describes the global clothing sales increasing from 50 billion units in 2000 to 100 billion units in 2015 while the number of times clothese were worn on average before being discarded decreasing by 36% during the same period. The report claims a less than 1% recycle rate of clothing and suggests a greenhouse gas impact that is greater than international flights and maritime shipping. Is fast fashion, where there is an interest in following short term trends, the reason for such an impact ? Should consumers be charged for the environmental impact of their clothing or should this be the responsibility of the producers to take back used clothing ? Should manufacturers be provided explicit incentives to reuse clothing fibres from used clothing or should this be based on self interest to reduce costs ? Is there a need for governments to enable coordination to create a circular economy for clothing ?

Posted in Air, Capacity, Collaboration, consumer, Operations Management, Supply Chain Issues, Sustainability | Tagged , , , | 5 Comments