Walmart to charter ships to ensure capacity for the holiday season

An article in SupplyChainDive titled “Walmart charters ships to ensure freight capacity, inventory for peak season (August 18, 2021) describes the challenge of higher out of stock levels and delivery capacity constraints faced by the retailer. By chartering the vessels, maritime container capacity is ensured, thus potentially decreasing lead time and ensuring on time delivery. With potentially 20% higher inventory levels planned, and additional transport capacity, out of stock levels should decrease. Will having its own capacity increase total logistics costs for Walmart, or decrease it ? Is this a way to solve a coordination problem between transportation and logistics ? Is this a competitive need or an efficiency driven decision ?

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Recycling coffee cups – why is it difficult ?

An article in the site HuffPost titled “Why can’t coffee cups be recycled” describes the challenges associated with coffee cups that have a polyethylene lining that is difficult to recycle. In addition, lined coffee cups if mixed with other cups without lining, contaminate the entire lot, thus sending more material to the landfill. Given the desire of retailers to ensure the coffee stays hot, what solutions would you suggest to improve coordination and increase recycling? Should cups have a separate insert that customers could remove to enable the paper cup to be recycled ? Or should we give up on coffee cup recycling and be satisfied with recycling the sleeve of the cup ?

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Toyota has chips for automobiles while others do not, how ?

An article in titled “How Toyota thrives when the chips are down” (March 8, 2021) describes the impact of the global chip shortage and associated auto manufacturer impact but has left Toyota unaffected. Toyota plans to increase vehicle output. The reason is identified as stockpiling of six months worth of chip supply by Toyota to ensure business continuity. An additional reason is the company’s deep understanding of all components provided by suppliers, so that they can consider substitution. Should other auto manufacturers start moving away from lean manufacturing and build up inventory? Should the stockpiled items be chosen strategically based on risk or substitution options ? Should domestic chip manufacturing in the US be a solution ?

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Global Supply Bottlenecks and rethinking China sourcing

An article in APNEWS titled “Shipping snags prompt US firms to mull retreat from China” (August 5, 2021) claims that firms are worried about container capacity, shipping delays and rising prices. Many manufacturers (52%) are thus considering moving production back to Mexico or the US. What will be the impact of moving to US sourcing for many currently globally sourced products – will it make manufacturers more or less profitable ? Should manufacturers consider splitting their sourcing across the US and Mexico or vertically integrate ?

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Manufacturers thinking holistically about opening in the New Normal

A report published by Purdue’s DCMME ( describes an approach to leverage smart technology to enable manufacturers to operate as they open after the pandemic. The report describes process adjustments to prevent infection spread and rethinking the economics of technology adoption including cobots, sensors, video technology, cleaning robots etc.   Is fast adoption of technology to protect employees a competitive need for manufacturers ? Will technology adoption reduce headcount and thus be resisted by employees ? Will the products have to be redesigned to work in this environment ?

Posted in Capacity, manufacturer, Operations Management, Supply Chain Issues, technology, Uncategorized | Tagged , , , | 48 Comments

Benefits of customer flexibility during the pandemic

An article in ASCM Insights ( describes reasons why retail grocery customers might be stockpiling.  The article suggests that retailers should deal with each reason separately, with appropriate steps to reassure customers.    There is also discussion of smaller retailers and their opportunities to be competitive. If customers demand free delivery, due to their Amazon Prime expectation, how should retailers compete ? Who should pay for the store labor costs associated with curbside delivery to customers ? How many of these online customers will remain in that mode as the pandemic worries decrease ?

Posted in Capacity, consumer, Cost, delivery, logistics, product, retailers | Tagged , , , , | 106 Comments

Hardware Chain Growth through the pandemic

An article in the Wall Street Journal (August 16, 2020 describes the impact of the pandemic on hardware chains such as Home Depot and Lowes.   From cancelling customer attracting, but low margin, promotions to ensure social distancing, to reordering products that customers demanded to remodel, or dealing with the 35% increase in foot traffic over last year, to monitoring customer demand closely to adjust forecasts, stores are becoming more nimble in their supply chain execution.  How should stores adjust to observed store sales to reduce stockouts ? Should suppliers be asked to do vendor managed inventory at retail stores ? How should contractors be managed vs residential DIY customers ?

Posted in Capacity, competitiveness, congestion, consumer, Coordination, Cost, logistics, retailers, supplier, Uncategorized | Tagged , , , , | 49 Comments

Building resilience in supply chains

A news report ( described six ways that supply chains can build in resilience to deal with the pandemic during the early days when suppliers in China were impacted. These include adjusting shipment modes, using alternate designs, building up inventory, leveraging existing supplier capabilities etc.  How quickly can each of these alternatives be leveraged to build in resilience ? Do these suggestions imply dual sourcing ? Will costs increase as a result ?


Posted in Capacity, China, Coordination, disruption, logistics, product, ship, supplier, Supply Chain Issues, Uncategorized | Tagged , , , , | 68 Comments

The logistics of organ transplants – supply but inefficient distribution

An essay in the Wall Street Journal by David Weill titled ‘Supply Isn’t the problem with Organ Transplants” (December 6, 2019), describes the increased supply of organs in the US but an inefficient distribution of the organs to patients who need them, thus creating apparent shortages in the minds of patients and their families. He describes the organ procurement process, managed by network of 60 non-profit organ procurement organizations (OPOs), who operate under the department of Health and Human services oversight, and sets prices. He describes the increased deaths due to the opioid crisis, the eight different thoracic and abdominal organs that can be used from the cadaver, and the rush by various teams to get these organs and match it with their patients. But the matching of available organs to patients depends on the readiness to do the transplant, and delays in that stage may end up with a situation whereby 30% of lung transplant patients die because they never found a donor. What can be done to improve the logistics of supply and demand and thus provide better use of the donor organs ? Should OPOs be measured based on their success in placing organs ? Should doctor workloads be flexed to provide priority to use available organ transplants ? Can technology help improve the grim performance metrics for organ use in the US?

Posted in Coordination, delivery, hospital, logistics, Service Operations, Supply Chain Issues, transport | Tagged , , , , , , , | 55 Comments

The benefits of recycling robots to enable recycling efficiency

An article in, titled “Recycling robots raise millions from top venture firms to rescue an industry in turmoil”, describes challenges faced by US recycling companies as a result of China’s lowering of the contamination threshold for recyclable content combined with lack of sufficient labor given the healthy US economy. This has enabled the competitiveness of technology solutions using computer vision, robots, machine learning etc to identify and sort garbage into sorted piles of plastics, cartons etc. With a higher pick speed (twice as fast of humans), higher accuracy and longer working hours, automation seems to be a competitive alternative. Should landfilling prices be increased to incentivize use of automation to recycle rather then throwing all of the garbage in the landfill ? Should separation at the source i.e., moves to separation of barge by consumers be encouraged so that the robots tasks become simpler and thus improve the recycling economics ? Should greater benefits (perhaps through lower sales taxes) be provided for purchase of products with higher recylced content ?

Posted in Capacity, competitiveness, Cost, productivity, recycling, Sustainability, technology | Tagged , , , , | Leave a comment