Can logistics assist in dealing with volatility and uncertainty ?

Posted on August 19, 2021 by aviyer2010

An article in American Global Logistics titled “The Logistics Industry in 2021: Using strategy to deal with volatility and uncertainty” (December 11, 2020) describes adaptability, responsiveness and resilience as key features of logistics systems, enabling “adapting to winning”. The article suggests form supply chain partnerships, flexible fulfillment, supply chain diversification and a focus on business continuity. How should logistics systems deliver these capabilities while also remaining cost competitive ? Should logistics systems have multiple versions that synchronize with customer willingness to pay ? How should performance metrics adjust to encourage such strategies ?

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Amazon’s The Drop and associated supply chains

Posted on August 19, 2021 by aviyer2010

Amazon’s website “The Drop” describes its process as consisting of collections that are available for 30 hours, are designed by influencers and inspired by street trends. Their limited availability reflects supply constraints based on fabric availability. But the limited availability also creates a rush to buy immediately. How would you plan supply to meet an unknown demand ? Would Amazon be better off to have a lower fill rate to create a sense of urgency to purchase i.e., is it a case of build and they shall not come ? Should the apparel be built in advance of demand, with inventory being used to satisfy demand, or should these products be made to order with a longer fulfillment lead time ?

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Identifying demand for ugly produce not accepted by retailers

Posted on August 19, 2021 by aviyer2010

An article in the Atlantic titled “The Murky Ethics of the Ugly-produce business” (January 25, 2019) describes platforms such as Misfits Market and Imperfect Produce that delivers to customers who both are ready to accept the misshapen fruit, care about reducing food waste and get the benefit of up to 40% lower cost, and get home delivery. But to ensure customer orders are filled, platforms sometimes also use distributors as a source. Given the impact of such platforms on reducing food waste, should they be awarded carbon credits ? If ugly produce were not sold to customers, would they be wasted or used for products such as sauces ? Should retailers accept the produce despite its shape and thus avoid the need for such secondary platforms ?

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US Food Supply Chain Disruptions due to the pandemic

Posted on August 19, 2021 by aviyer2010

An article in the McKinsey & Co website titled “US Food Supply Chains: Disruptions and implications from Covid-19” describes the shift in the mix between grocery and food service to serve the US population. With grocery moving from 56% to 73% of the total food spending, distribution systems were impacted and food insecurity issues magnified. The impacts are faced by grocery retailers, distributors, farmers and restaurants. How should each of these supply chain entities plan to synchronize with demand changes ? How can shortages be averted by leveraging customer demand flexibility ? How can virus transmission rates and associated impacts be incorporated into supply chain planning ?

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Walmart to charter ships to ensure capacity for the holiday season

Posted on August 19, 2021 by aviyer2010

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 ?

Posted on August 19, 2021 by aviyer2010

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 ?

Posted on August 19, 2021 by aviyer2010

An article in Investing.com 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

Posted on August 19, 2021 by aviyer2010

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

Posted on August 19, 2020 by aviyer2010

A report published by Purdue’s DCMME (https://tinyurl.com/y5579emz) 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

Posted on August 19, 2020 by aviyer2010

An article in ASCM Insights (https://tinyurl.com/yyneu93x) 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