Is V-commerce by Fanatics the future of retail?

An article in Fortune (September 1, 2018) titled “Licensed to Thrill”, describes the company Fanatics that has exclusive rights to sell professional basketball and football clothing. The company describes V-commerce as a combination of manufacturing, logistics and technology capacity. Fanatics orchestrates delivery product for sale online within hours of an athletes choice of team, manages retail stores and the unique intellectual property of player content. Will the future of retail require such execution to remain relevant? Will Amazon and Walmart be expected to compete for such content? How can manufacturing speed be used by retailers to compete?

Posted in consumer, Cost, delivery, Ecommerce, retailers, technology | Tagged , , , , | 1 Comment

Going Digital in the construction industry to reap $1.6 trillion in potential savings

An article in Fortune (October 2018) titled “Building with Bits and Bytes” reports that the construction industry is replacing paper with digital drawings, enabling collaboration with architects and reducing the 33 percent reported waste, totaling $1.6 trillion. The construction industry’s productivity improvement is estimated as 1 percent, vs 2.8 percent for the overall economy. Will competition across builders mean lower construction costs as a result of digitization? Will maintenance costs decrease as a result of better designs? Will construction firms devise their own proprietary software to optimize designs and construction costs?

Posted in Capacity, competitiveness, Cost, delivery, logistics, Operations Management, technology, waste | Tagged , , , , | Leave a comment

Reducing complexity and returning to profitability at PSA’s Opel division

An article in BloombergBusinessweek (August 29, 2018) titled “The Stunning One-Year turnaround of GM’s German castoff” describes a focus on reducing part variety. The article describes reduction of the 57 possible infotainment systems for the Corsa hatchback to 10. It also reports the number of windshield wiper options from 16 to 9 to improve efficiency. Will simplifying designs decrease spare parts revenues in the future? Will car prices be lowered to drive volume given lower costs and higher efficiency?

Posted in consumer, Cost, Operations Management, productivity, Variety | Tagged , , , | Leave a comment

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 , , , , , | 62 Comments