Drones for material handling in plants and warehouses

Posted on September 21, 2015 by aviyer2010

A video posted in (https://www.youtube.com/watch?v=rG3Frwaa47E) shows the use of drones for indoor material handling being planned by Qimarox.  The video shows the benefits of using the third dimension and thus relieving the constraints of aisles for warehousing equipment.  The direct flight between points also reduces the constraints on location of kitted components. Will drones provide the productivity and flexibility demanded for light weight kitting ? Will ecommerce warehouses be potential users, particularly for cosmetics, pharma and computer components ? How will drones compete with robots and how should warehouse management systems plan to be integrated with drones for efficient order picking ?

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The role of logistics competitiveness in Airbus’s Mobile, Alabama assembly plant decision

Posted on September 21, 2015 by aviyer2010

A New York Times article (September 18, 2015) titled “First US Airbus Factory Gives Wings to Revival in Mobile, Alabama” describes parts being flown in from Europe for assembly of the A321 jet in the Mobile plant. But the article describes the deepwater port to receive large parts from Europe, freight trains nearby and two long runways at the nearby Brookley airport that added to Mobile’s competitiveness. The historic role of military employment at the Brookley Air Force base also added to its significance as a location, in addition to the urgency caused by the cancellation of a previously approved tanker project involving Airbus and Northrup Grumman.  How should the logistics access and mode flexibility of a location be incorporated into the calculus regarding its competitiveness ? Given the mix of modes to deliver components, how will this flexibility enable fast response and yet efficient production in response to production issues as they arise ?  Will the US assembly of the jets provide a demand side benefit in addition to supply advantages – if so, which is more important in determining this site’s long run benefit to Airbus

Posted in Collaboration, competitiveness, Cost, logistics, manufacturer, Operations Management, ordering, productivity, Railroad, Train, Uncategorized | Tagged , , , , , , , , , | 18 Comments

Consumer expectations regarding Ethical Behavior by Companies and associated trust issues

Posted on September 17, 2015 by aviyer2010

An article in the Sustainable Brand newsletter (http://tinyurl.com/companytrust) describes a study by Princeton Survey Research Associates that claims that 96% expect companies to behave ethically, 90% expect a focus on protecting the environment and 76% expect companies to limit their environmental damage. However, 10% of the consumers expect that companies can be trusted to do the right thing.  The article suggests use of social media to communicate the message regarding steps companies are taking to be more responsible.  Should companies take deliberate steps to highlight that they have earned consumer trust and make ethical choices ? Should one expect these steps to be aligned with profit motives in the long run or expect these steps to decrease profitability ? How should companies ensure that ethical practices are propagated across the supply chain ?

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Implications of the “Safe and Accurate Food Labeling Act 2015” passed by Congress

Posted on September 17, 2015 by aviyer2010

A discussion of the Safe and Accurate Food Labeling Act in (http://www.fooddemocracynow.org/blog/2015/jul/23-0) describes the law’s impact on blocking states from passing voluntary GMO labeling laws. A Cornell study by William Lesser had estimated the impact of such labels at $500 per year for a family of four in NY State.  But other researchers claim that transparency across the supply chain  will increase trust and decrease risk (Alexis Bateman).  Should companies have the right to make claims (such as non GMO) about their supply chain even if the specific aspects of the claim  are not shown to have a material impact on the product safety or performance ?  Should product supply chain claims be permitted to be about product features that certain customer segments want to know about ? Will the cost impact of such claims as reflected in their prices be considered part of a customer’s willingness to pay for desired product features ? Should the Safe and Accurate Food Labeling Act be vetoed because it might be viewed as a constraint on consumer choice ?

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“Uber for Trash”

Posted on September 2, 2015 by aviyer2010

An article in the Sustainable Brands newsletter (http://tinyurl.com/uberfortrash) describes Rubicon Global as an “Uber for Trash” company, a company that offers on demand trash removal within a few hours to a day. The company removes trash, sorts and recycles to reduce material going to the landfill. The net of pickup and recycling revenue determines customer costs. Will this company generate enough recycled material to become a reliable source for recycled content using companies and thus generate a higher revenue stream for customers ? How will optimal routing to minimize pickup costs mesh with the need to offer fast pickup ? How will on demand trash pickup compete with the current scheduled periodic (weekly) pickup common in most locations ? Will such services be more relevant for companies with significant demand surges that overwhelm trash holding capacity ?

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Malaysia, the Malacca Straits, Slavery and TPP

Posted on August 30, 2015 by aviyer2010

An article in the Huffington Post (May 26, 2015) titled “Why the US is Desperate to OK Slavery in Malaysia”, describes the logistical importance of the Strait of Malacca located between Malaysia and Indonesia and through which 60% of global trade passes.  The flows include 85% of the oil imported by China, or 60% of their requirement.  This makes preservation of control of the straits, currently ensured by the US Navy, of strategic importance as China tries to assert its control over its security.  But inclusion of Malaysia in the Trans-Pacific Partnership (TPP) requires its classification as a Tier 3 human trafficking country to be lowered, thus the US State Department reclassified Malaysia as a Tier 2 country.  Is the acceptance of steps by Malaysia to change enforcement sufficient to provide the strategic benefit of control of the Malacca Strait for TPP countries? If the Strait of Malacca becomes less reliable for China’s strategic interests, what options might it pursue to ensure its own interests are assured ? Should one balance ethical concerns with strategic interests for TPP or should ethical concerns be nonnegotiable deal breakers ?

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Data protection timing disputes for biologics pharmaceutical products and TPP

Posted on August 30, 2015 by aviyer2010

An article in the New York Times (July 30, 2015) titled “Patent Protection for Drugs puts Pressure on US in Trade Talks” (http://www.nytimes.com/2015/07/31/business/international/pacific-trade-deal-drugs-patent-protection.html?_r=0) describes a conflict between Trans-Pacific Partnership (TPP)  countries regarding the duration that data collected during development of biologic medicines is protected. The US has set it at 12 years, while Australia has set it at 5 years. The timing of this data protection is intended to increase the costs for generic manufacturers to repeat these trials before launch. The conflict thus pitches intellectual property protection and costs, but does not involve a discussion of patent protection duration. Should the benefits of the $28 trillion in trade under TPP be incentive for the US to decrease protection time to 7 years from 12 ? Will the US pharmaceutical industry, which has the bulk of the medicines, 3372 out of the 5600 in development across TPP countries, suffer the most and if so, how should incentives for development be protected ? How should the demands from patients in TPP countries for cheaper drug costs be balanced against industry demands ? How will the rest of the global supply chain for biosimilars from non TPP countries offer an alternative to keep costs manageable ?

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Japanese Industry and TPP

Posted on August 30, 2015 by aviyer2010

An opinion piece  on August 7, 2015 in the Japan Times ( http://www.japantimes.co.jp/opinion/2015/08/07/editorials/setback-tpp-talks/#.VeNfiPlVikp) describes Japanese worries about the TPP pact. The Trans-Pacific Partnership, involving 12 countries with $ 28 trillion in GDP, will involve changes to how Japan assists some of its industries.  The rice industry has been protected in Japan in the past as have beef and pork – under TPP the rice quota for imports will have to be raised and tariffs for beef and pork eliminated. In addition, the secrecy associated with the negotiation has created worries about the final version of the pact, even if it balances all of the interests across the group. Should such industry specific protections be accepted in return for the greater opportunity offered across all industries for the Japanese economy ? How might local Japanese products be offered an opportunity to compete against the anticipated price competition from imports ? Could unique features, labeling and packaging, as well as freshness considerations enable local Japanese production to remain competitive and even expand in the global TPP market ?

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Canada’s Supply Management Policy and TPP

Posted on August 30, 2015 by aviyer2010

An article in Business News Network (http://www.bnn.ca/News/2015/6/26/3-things-to-know-about-the-Trans-Pacific-Partnership.aspx) reports on the impact of the TransPacific Partnership (TPP) pact being negotiated between 12 countries on supply management approaches used for milk, cheese and eggs. Under supply management, the Canadian government controls the amount produced domestically and controls the volume of imports, in order to maintain supply and prices in Canada so that diary farmers livelihoods are maintained. Under TPP, these controls will need to be phased out, thus impacting prices for consumers (which would be expected to decrease) and profits for Canadian farmers (also expected to decrease). The Canadian government thus has to choose whether overall growth opportunities offered by TPP, which covers countries with 28 trillion dollars in GDP, is worth the protection of the diary industry.  How should the opportunities to export Canadian diary be balanced against the competition from other diary competitive countries such as New Zealand ? Should the Canadian diary industry create a local brand representing their produce to create a demand pull, subsidized by possible dislocation funds from the government ? Under what conditions would efforts to create stable local industries be justified as for the common good ?

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Brick and mortar stores using ecommerce tricks

Posted on August 12, 2015 by aviyer2010

An article in the Wall Street Journal (August 12, 2015) titled “Web retailers Teach In-store Tricks” describes Macy’s display of one item each of swimsuits, with shoppers using an app to get their size to try on. Freeing up the shop floor from the inventory and getting the specific size desired by the customer suggests a replication of the e-commerce efficiency in a brick and mortar world. Similar ideas apply at Bonobos, where customers try on styles but order from a website and get home delivery, and target where patio furniture can be tested but have to be ordered for home delivery. While the flexibility to try on or test but delayed delivery helps retailers reduce inventory costs, does it also place them closer to e-commerce companies and thus subject to “shop and switch”, thus further decreasing their competitiveness ? Will such offers be more appropriate for private label products where the retailer is the only purveyor of that product ? Will the increased variety, and reduced shrinkage, associated with the decreased inventory on the floor, enable a greater customer reach and thus increased retailer profitability ?

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