Volvo’s concept of “Roam Delivery” that deliveries online orders to your parked car

Posted on May 24, 2014 by aviyer2010

An article in BloombergBusinessweek (February 27, 2014) titled “Volvo wants your parked car to accept deliveries”, describes a system that would permit a one time key option to open parked cars to deliver packages to Volvos. Online shoppers would place orders and confirm access to the delivery company and deliveries would require confirmation with Volvo’s OnCall system. The report suggests that the system would be suitable for lower value services such as dry cleaning or food in safe cities. Will the flexibility to deliver to the car location make online courier deliveries efficient ? How will this technology cover cars by other manufacturers ? Will the risks of such access outweigh the customer service benefit ?

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Will drone ships become a reality anytime soon ?

Posted on May 24, 2014 by aviyer2010

A report in Bloomberg (http://www.bloomberg.com/news/2014-02-25/rolls-royce-drone-ships-challenge-375-billion-industry-freight.html) on February 25, 2014, titled “Rolls Royce Drone Ships Challenge $375 Billion Industry”, suggests that drone ships controlled by land based captains can disrupt existing maritime shipping. By eliminating crew quarters and associated services, ships are estimated to be 5% lighter and can carry more containers, thus reducing costs by 12 to 15%. Crew costs, estimated to be 4.4% of operating costs would also be eliminated. Will the economics of drone ships drive the industry to shift to use them within ten years? Given that unmanned ships are currently illegal, and the union of seafarers opposes their use, will regulations and self-interest doom their adoption ? Should the use of drone ships for hazardous cargo be banned to manage risk or are risks lower given that human error due to fatigue, the cause of most shipping accidents, would be eliminated ?

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The supply chain for cordovan leather and shoe prices and availability impact

Posted on May 24, 2014 by aviyer2010

An article in the Wall Street Journal on May 24, 2014 (http://online.wsj.com/news/articles/SB10001424052702303468704579572141307216318?mg=reno64-wsj) titled “Cordovan Shoes for Men Play Even Harder to get”, describes the over $2400 price points and six month wait times for cordovan leather shoes. The leather is obtained from the muscle near the rump of a horse, with availability tied to horse meat consumption. But lower consumption of horse meat, larger alleged volume purchases of entire horse hides by some traders, six month tanning time for cordovan leather, all are claimed to reduce availability of cordovan leather. Given the customer demand for cordovan leather shoes, which claim to retain their sheen over time, why does distributor inventory not solve the availability problem ? Is this a temporary bullwhip effect, where reduced horse meat consumption and higher retail prices will create a new equilibrium where availability issues are resolved ? What are opportunities for other supply chain entities to mitigate the supply issues ?

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Is Amazon using Pre-order levels as a tool in negotiating higher margins from publishers ?

Posted on May 24, 2014 by aviyer2010

An article in the Wall Street Journal on May 23, 2014 (http://online.wsj.com/news/articles/SB10001424052702303749904579580052135901452?mg=reno64-wsj) titled “Amazon-Hachette Dispute Heats Up”, describes a complaint that no pre-orders for books by J L Rowling at Amazon.com’s website were being taken, while other sites continue to sell the books. A lower pre-order level by Amazon would delay book availability to customers and thus hurt the buzz and possible overall sales. The publisher claims that the dispute is centered around Amazon seeking a greater margin from e-books, claiming that the publisher has lower costs for e-books. Will Amazon’s strategy to reduce book access to customers hurt Amazon or Hachette or the consumers ? Given the recent ruling permitting publishers to set prices and retailers to negotiate discounts, will such tactics make the publishers worse off (given that Amazon was key to the dissolution of Apple’s contracts that provided a fixed rate)?

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Panasonic’s plans to move production back to Japan

Posted on May 23, 2014 by aviyer2010

An article in the Financial Times (http://www.ft.com/intl/cms/s/0/b22e772a-e1a2-11e3-9999-00144feabdc0.html?siteedition=intl#axzz32YPzdZCV) titled “Panasonic considers bringing production back to Japan) describes the weak Japanese yen (which has fallen 20% since 2012 against other currencies) improving the economics of production of rice cookers, washing machines and air-conditioners in Japan. Panasonic sells 50% of its products in Japan and such changes make sense now. Will the move to raise capacity in Japan create an inflexible supply chain as import costs increase and currencies move again ? Are there strategic reasons to relocate to Japan, such as adapting to local regulations, which make it an effective decision ? How should Panasonic retain the flexibility of its local capacity so that it can be reconfigured when products or conditions change ?

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Can Walmart get store customers to deliver online orders ?

Posted on May 19, 2014 by aviyer2010

An article published by Reuters (http://www.reuters.com/article/2013/03/28/us-retail-walmart-delivery-idUSBRE92R03820130328) titled “Wal-Mart may get customers to deliver packages to online buyers”, describes an idea where store customers could sign up to deliver orders to customers in their route in return for a discount on their bill. Using in store customers to deliver during their backhaul route home would save the costs of shipping via FedEx, UPS or USPS and avoid the courier costs, while enabling quick delivery. But will such a crowdsourced delivery mechanism ensure on time delivery and quality ? Will customers need to be certified and checked to ensure logistics reliability and will that increase the costs to the level charged by independent couriers employed by TaskRabbit or Instacart? Will WalMart sacrifice customer service to its instore customers or increase store customer loyalty by offering such opportunities ?

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Will “botsourcing” bring manufacturing back to the US

Posted on May 15, 2014 by aviyer2010

An article in the Harvard Business Review Blog Network (http://blogs.hbr.org/) titled “Robots are starting to make offshoring less attractive” describes how use of automation and robots is increasing the attractiveness of US manufacturing. Foxconn’s decision to build iphones in Pennsylvania, Tesla’s plans to make batteries in the US and Amazon’s use of robots for order picking coupled with significant hiring are described as sample impacts. Will the trend, described as botsourcing, increase the outsourcing of IT while increasing the insourcing of manufacturing i.e., should the bot controller be necessarily located close to the bot user ? What impact will this ability to separate the controls from the job execution have on the nature of training required for manufacturing employees ? Is manufacturing and service productivity the real determinant of long run growth in the economy, as suggested in the article ?

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Nike’s water footprint across the supply chain and reduction efforts

Posted on May 14, 2014 by aviyer2010

Nike’s Materials Sustainability Index discussion (http://www.nikeresponsibility.com/report/content/chapter/water) focuses on the 217 billion gallons of water consumed across its supply chain, with 7% generated by raw material production and cotton accounting for 87% of that use. A focus on reducing the absolute water footprint caused plants to focus on reducing leakage, use of waterless dyeing machines and materials use adjustments. Should the focus be on reducing the absolute amount of water or on recycling the water to decrease the net used in a cycle? Should any efforts to improve cotton yields while decreasing water use be credited back to the company beyond the cotton used by the company itself ? If shifting to use of carbon dioxide to save water be considered a more sustainable supply chain solution ? Should customers consider a product’s water footprint when making decisions ?

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Solar Roadways hopes to charge cars as they run on roads

Posted on May 14, 2014 by aviyer2010

A company called Solar Roadways (http://www.solarroadways.com/intro.shtml) claims to have a prototype installation of solar panels embedded in roads that can charge cars as they drive. Given that vast road network that can be harnessed with embedded solar panels, the company claims the potential to generate three times US consumption using solar power. The active circuitry in the panels can also be used to warn drivers if animals step on the road, and are designed to be modular, hence easy to detect failures (reported by neighboring panels) and easy to replace. Once the manufacturing challenges are overcome, what constraints will limit adoption ? Given the significant role of the Federal government in allocating road network infrastructure investments, will it be easier to get roads modified if the Federal government is convinced of their benefit? How will the current set of companies react to this drastic change in technology ?

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Coffee fed cows producing milk for Starbucks in Japan

Posted on May 14, 2014 by aviyer2010

An article in Sustainable Brands (http://www.sustainablebrands.com/news_and_views/chemistry_materials/jennifer_elks/closed-loop_upcycling_its_finest_starbucks_sourcing?utm_source=newsletter&utm_medium=innovation&utm_campaign=may14&mkt_tok=3RkMMJWWfF9wsRoku6XMZKXonjHpfsX56eotX6SwlMI%2F0ER3fOvrPUfGjI4DRcFqI%2BSLDwEYGJlv6SgFTrTBMbVxyLgOXxk%3D) titled “Closed Loop Recycling at its Best”, describes the fermentation of used coffee grounds to create a cattle feed, with the milk from the cattle being used at Starbucks stores in Japan. The concentration of Starbucks stores means that the collection of grounds to provide a steady supply from the 1,000 Starbucks stores in Japan was done as part of backhaul routes after trucks delivered products to stores. Given that the coffee grounds were already organic, should this “upcycled” use of the grounds, and consequent reduction of virgin feed be considered a more sustainable solution ? How should the consumer be educated about the benefits of such closed loop supply chains ? How should such solutions be incentivized by governments ?

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