Trans-Arctic Shipping routes and transport lead times

Posted on September 17, 2016 by aviyer2010

An article in BBC News (September 6, 2016) titled “Arctic Ocean Shipping routes to open for months” describes the melting arctic sea ice and new shipping routes. The article estimates if there is no dramatic reduction of Co2, these arctic routes may be open for 10 to 12 months of the year.  These arctic routes can decrease travel from East Asia to Rotterdam that takes 30 days through the Suez Canal to 20 days by 2050. However, a more aggressive low emissions scenario would keep arctic routes open for fewer months in the year and thus not impact travel time much. Most of these scenarios did not generate much benefits to shipping to the US from East Asia. How might manufacturers plan the impact of these routes on their global supply chains ? If these arctic routes open up, is it optimal to take advantage of them or refuse to use them ? How might global trade be impacted as the sea travel times decrease, thus decreasing transport costs ?

Posted in Capacity, logistics, manufacturer, ship, Supply Chain Issues, Uncategorized | Tagged , , , , | 102 Comments

Choosing queues to minimize wait time

Posted on September 17, 2016 by aviyer2010

An article in the New York Times (September 7,2016) titled “How to pick the Fastest Line at the Supermarket” describes how choosing a line with one person with 100 items may be faster than a line with four people with 20 items each, with the former taking six minutes and the later taking seven minutes on average. The main issue, the article claims, is the setup time per customer – the time to say hello, pay for the purchase and say goodbye.  Given the estimated 37 billion hours spent by US customers in line each year, these details can improve service time.  But the article also claims that estimation of waiting time is a mental calculation with customers overestimating their wait times by 36%. How should service times design their architecture to influence both the actual time and perceived time ? How can service systems decrease setup time for queues, thus increasing productivity, while maintaining customer service perceptions ?

Posted in Capacity, emb2019, imm2018, Operations Management, productivity, retailers, Service Operations, Uncategorized | Tagged , , , , , , | 24 Comments

The productivity benefit of tiny wireless in TSA queues

Posted on September 17, 2016 by aviyer2010

An article in the Wall Street Journal (August 16, 2016) titled “How Tiny Wireless Tech Makes Workers More Productive” describes use of wireless tracking in a test in Atlanta to speed up security screening by Transportation Security Administration (TSA). Passengers place their articles in a bin with a transponder, then go to a separate line to be screened. After completing screening, they pick up their items from a bin identified using the transponder. The article claims that separating the passenger from their bin reduces queue bottlenecks and decreases the queue length by 30%. Do these results suggest a mechanism by which real time tracking can increase productivity by decreasing queue bottlenecks ? Does the separation of customers from their bags create other service issues, such as the need to have customers monitor baggage examination ? Might there be other service architectures that deliver the same productivity without the technology?

Posted in consumer, emb2019, imm2018, productivity, technology, Uncategorized | Tagged , , , , , | 22 Comments

The GM vs Tesla Supply Chain competition for EVs

Posted on September 17, 2016 by aviyer2010

A New York Times article (September 15, 2016) titled “Upstart car, unexpectedly, from an old-line carmaker” describes the launch by General Motors of the Bolt, with a range of over 200 miles. The article claims that GM outsourced battery production to LG Chem, and leveraged the shared production facilities with other cars it produces to create a competitive offering. In contrast, Tesla is integrating vertically by producing its own batteries to lower costs, but has to develop its manufacturing scale up to make the close to 500,000 cars it has promised by 2018. Will GM or Tesla win this battle for electric vehicle production or will we have a split market that is expanded to increase the fraction of EVs overall ? Since GM can subsidize prices for the Bolt because it can increase its fleet miles per gallon (with a Federal target of 54.5 by 2025) and thus sell larger lower mileage cars with greater margins ? Is vertical integration or scale benefits more important ? Finally, will it be optimal for Tesla to sell batteries to GM to go down the learning curve for batteries faster?

Posted in Capacity, Collaboration, competitiveness, Cost, disruption, manufacturer, Supply Chain Issues, Sustainability | Tagged , , , , | Leave a comment

Will a van and delivery robots combination be competitive as a logistics solution?

Posted on September 17, 2016 by aviyer2010

An article in CNN money titled “This Mercedes Benz van will carry a fleet of delivery robots” (http://money.cnn.com/2016/09/07/technology/starship-robot-mercedes-benz/index.html?iid=ob_homepage_tech_pool) describes a Mercedes van and a fleet of robots from Starship technologies that will combine the speed of travel of the van and the flexibility of delivery for the robots. As robots deliver and return to the vehicle, new loads will be put on them for the next delivery. Will such a combined solution improve the economics of last mile delivery as against using human delivery personnel ? Would delivery robots or delivery drones be more competitive for the delivery to the customer doorstep ? Is this the next step to further automation with a driverless truck combined with robot or drone local deliveries ?

Posted in Capacity, competitiveness, consumer, Cost, delivery, truck | Tagged , , , , , , , , | Leave a comment

How will blockchains impact supply chains ?

Posted on June 24, 2016 by aviyer2010

An article in the Wall Street Journal titled “Toyota Unit Joins R3 Blockchain group” (June 23, 2016) describes Toyota’s plan for use of blockchain, an online distributed ledger technology, for non-monetary transactions. The article claims that blockchains can track auto parts across the supply chain, and, potentially, connect with customer smart phones or vehicle sensors.  The potential to react to disruptions either on the supply side or demand side through automatic signal updates suggests potential value across the supply chain. How should supply chain entities, from Tier 4 suppliers up to the OEM, plan their adoption of this technology ? Will independent platforms, such as R3, set the ledger standards, or will the final solution be a multitude of possible formats for distributed data tracking ? How will the benefits from such solutions be distributed across the supply chain so that participating entities realize a portion of the savings across the system ?

Posted in Collaboration, consumer, Cost, disruption, emb2021, Global Contexts, logistics, manufacturer, Supply Chain Issues, technology, Uncategorized | Tagged , , , , , , | 15 Comments

Alternate Future Scenarios for US trucking

Posted on June 24, 2016 by aviyer2010

An article in FleetOwner.com by Sean Kilcarr titled “Logistics outlook:last mile a major Choke Point” on June 22, 2016 describes four technology adoption scenarios outlined in the State of the Logistics report for 2016.  The technologies listed include the internet of things, self-driving trucks and 3D printing. The scenarios include 1) Cruisin’ Down the Highway: In this scenario, regulators work to ease constraints technology adoption that improves efficiency for all, 2) Stop Signs and Red Lights: In this scenario, only the easily adoptable technologies are used and that too only by the strongest companies, 3) Middle of the Road: In this scenario, there is limited automation and incremental change and 4) Dead End Street: In this scenario, costs increase due to regulatory inflexibility and thus limited technology adoption.  Which of these scenarios is likely to emerge as the outcome and how will will impact supply chains ?  How should regulators balance the risk associated with approvals with the entrepreneurial benefit to learning by doing ? What is the opportunity cost of not being proactive with technology adoption in terms of loss of competitiveness for US supply chains ?

Posted in Capacity, competitiveness, Cost, delivery, logistics, Prices, productivity, technology, truck, Uncategorized | Tagged , , | 24 Comments

The rising role of Supply Chain Finance

Posted on June 24, 2016 by aviyer2010

An article in the Harvard Business Review by Rogers et al (“The Rise of FinTech in Supply Chains, June 22, 2016) describes the increased role of payments processing across a supply chain. They describe the flexibility for suppliers to access a payment network, run by new companies such as Orbian and Prime Revenue or traditional banks such as Citigroup or Deutsche bank, that connect partners in a supply chain.  Suppliers can choose to tradeoff timing of access to cash against financing of that early payment at the buyer’s cost of borrowing, thus improving efficiency across the supply chain. Will buyers demand even lower supplier prices given the access to lower buyer borrowing costs ? Would you also expect where supplier borrowing costs are lower and that buyers access the system to stretch out payments using supplier terms ?  How would quality issues, and the threat of payment withholding, be operationalized in such systems ?

Posted in competitiveness, Cost, delivery, ordering, Prices, Supply Chain Issues, technology, Uncategorized | Tagged , , , , | Leave a comment

The productivity benefits from Amazon ‘s Kiva robots

Posted on June 20, 2016 by aviyer2010

An article in Quartz (http://qz.com/709541/amazon-is-just-beginning-to-use-robots-in-its-warehouses-and-theyre-already-making-a-huge-difference/) claims that the “click to ship” time at Amazon has decreased from 60-75 minutes with human operators to 15 minutes using Kiva robots. In addition, with robots, warehouse inventory can increase by 50%, thus decreasing operating costs by 20%. Will all of this efficiency translate into lower prices for consumers or higher profits for Amazon or both? Do you expect similar benefits for other warehousing operations? Is there a benefit to creating focused warehousing robots rather than using general purpose solutions?

Posted in competitiveness, consumer, Cost, Ecommerce, logistics, Operations Management, productivity, Service Operations, technology, Uncategorized | Tagged , , , , , , | 161 Comments

Shopping cart robots at Walmart ?

Posted on June 20, 2016 by aviyer2010

An article in the website geek.com (http://www.geek.com/news/walmart-is-turning-its-shopping-carts-into-robots-that-follow-you-1658786/) describes a partnership between Walmart and Five element Robotics to assist Walmart shoppers using a personal robot. The goal is to have the robot gather things in the shopper’s shopping list and freeing the shopper’s hands. Will such a focus on the shopping list decrease impulse buys by shoppers ? How can the robots be integrated with retailer promotions to get shoppers interested ? Will shoppers even be interested in going to the store if they just need to follow the robot ? Can Walmart use this approach to compete against Amazon ?

Posted in competitiveness, consumer, Cost, Ecommerce, logistics, Operations Management, productivity, Service Operations, technology, Uncategorized | Tagged , , , | Leave a comment