The supply chain for songs

Posted on April 8, 2012 by aviyer2010

An article in the New Yorker (March 26, 2012) describes the role of producers (who generate chord progressions, beats and computerized synths), “top-line” writers (who generate melodies, lyrics and hooks to attract listeners) – who then market to performers to add their voice and market. The market for producers and top-line writers is concentrated, thus impacting the similarity of music across performers. The producers and top-lie writer teams market their song structure to performers and pick the ones most likely to generate hits. The performer may record their voice anywhere, and the voice would be combined with the chords and edited to generate the song. In other words, the song is an assembly of disparate performers working at spatially distributed locations and time points. Given such a supply chain for song creation, should one expect similarity in the output across performers or would the need to be successful generate a portfolio of song types ? Should one expect “trends”, as in fashion, that would rely on specific tune types generated by producers ? Will such platform based music result in a few performers generating the bulk of the hits and crowding out new performers ?

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Pepsico’s “water positive” schemes and Jugaad Innovation

Posted on April 7, 2012 by aviyer2010

In a book titled “Jugaad Innovation” Radjou, Prabhu and Ahuja write about Pepsico’s water positive supply chain in India i.e., the company saves more water than it uses. The secret – enabling a “direct seeding” rice planting process, thus saving 30% of the water use, and using local village innovators and low capital intensity solutions, called Jugaad innovation. Given that this water saved exceeds water use in the rest of the company’s operations in India, they are termed water positive. Should efforts by a company to create savings that net out its use be a permissible definition of water positive supply chains ? Is the logic the same if a firm were to purchase “water credits ” or “carbon credits” to net out its carbon or water usage ? How important is the need for these innovative approaches to reduce environmental impact to be low capital intensity projects ?

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Renewable energy server farms in Iceland

Posted on April 7, 2012 by aviyer2010

An article in Bloombergbusinessweek (April 2,2012) describes a server farm on solid bedrock, close to the airport, in the midpoint of the Atlantic, fueled by renewable geothermal energy and cooled by fans that blow in cool air from the outside. The green serve farm that provides IT firms with the panacea of renewable energy, linked to a new fiber optic undersea cable to provide bandwidth. Can remote Iceland become an effective player in the announced strategies by firms to decrease their carbon footprint ? Will geography trump sustainability in permitting this server farm to offer a contingent service – a backup to failures at other points in the network ? Will the competitiveness of such farms suffer as software and hardware tools increase data capacity f existing servers, thus naturally lowering per unit carbon impact ?

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Improving the competitiveness of Portugal’s ports

Posted on April 7, 2012 by aviyer2010

An article in the Economist (March 24,2012) describes the drop in prices per container from $1000 to $300 from Asia to Europe as ship capacities increased to 14,000 containers. Portugal’s deep ports can accommodate these ships but are uncompetitive for port services. Entrenched unloading companies with long leases and strong unions with high wages means that ships bypass this port. If leases are awarded competitively, there were more unloading companies, and port operators were privatized even more, could prices drop and productivity increase to make the ports more competitive and attract more ships, thus increasing much needed jobs ? Can port changes be viewed as an externality – meant to assist the Portuguese economy with opportunities for value added work ? Could the resulting transport and rail flows to Southern Spain boost opportunities for towns enroute ? Is port competitiveness a land based concept more than sea related ?

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US Manufacturing rebound and prospects

Posted on April 7, 2012 by aviyer2010

An article in the New York Times (April 4,2012) describes job growth at Master Lock, a manufacturer, and the 20% of the manufacturing jobs, lost during the recent recession, that have been added back to the economy. However, some of the manufacturing jobs have been lost due to automation, others due to global competition. At Master Lock, 33% of the employees now produce the same output as in the past. How should the focus on manufacturing be tuned to enable innovation in product design and delivery ? Should investments in capital equipment and automation that decrease manufacturing jobs, be discouraged to preserve jobs ? Is there the risk that a focus on manufacturing job creation may make industries less competitive globally ? Finally, it appears that companies shielded from global competition, such as local services, seem to add jobs. Would constraints on global competition, generate jobs but hurt competitiveness ?

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What are GM’s choices for the Opel plant in Bochum, Germany ?

Posted on April 4, 2012 by aviyer2010

An article in the New York Times (April 2,2012) describes worker frustration at GM’s Opel plant in Bochum, Germany, with worries that it will be shut down in 2014. Wages at the plant are six times the wage rate in GM’s plant in nearby Poland. Shutting down the plant will cause GM to incur cleanup costs for the former coal mine site, and high severance payments. The plant produces a popular minivan, the Zafira, but the company has made no investments in the past few years, and the two story plant layout is not as efficient as a single floor. Should GM keep the plant open to save shutdown costs ?Should new investments be subsidized by the local or central government to preserve jobs ? Should employees offer productivity improvements to keep the plant alive ? How should this plant justify itself in GM’s global supply chain ?

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Is fiber optic cable capacity too much ?

Posted on April 4, 2012 by aviyer2010

An article in the Wall Street Journal (April 3, 2012) suggests that fiber optic capacity expansion is too optimistic, pointing to 3% utilization of cable in big cities and new laser technology that expanded capacity in the past. But capacity is being added to accomodate video traffic and high speed trading demands. Will curbs on trading dampen demand and create a capacity glut ? Will new technogies expand capacity from existing cable and decrease demand for new capacity ? Will railroads with buried pipe reap benefits now ? Or is this a repeat of past fiber optic bubbles, leaving the system with excess capacity and economic turmoil?

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Social Networking at P&G to drive sales growth

Posted on April 3, 2012 by aviyer2010

An article in Bloombergbusinessweek (April 3, 2012) describes Proctor & Gamble’s foray into social networking and its demand impact. A Facebook campiagn for Pepto-Bismol focused on “Celebrate Life” – targeting users of the product on Saturday and Sunday mornings – and driving a 11 % market share growth in 2011. Similarly, a Facebook campaign “Mean Stinks”, sponsored by Sercret deodorant, is a campaign against bullying, that increased page visits by a factor of 25 and sales by 16 %. Will consumer products manufacturer sponsorship of such social media sites enable specific marketing campaigns to drive growth among 25 to 54 year old customers that are synchronized with its supply chain ? At what point will customers tire of the sponsorship messages and merely reward the compay for doing good deeds, thus eliminating the benefit of targeted campaigns ? Will such efforts enable global leveraging of marketing spends or will they remain inherently local, thus requiring a separate campaign in each location aroud the globe ?

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Unilever’s Sustainability Measures for its Supply Chain

Posted on April 3, 2012 by aviyer2010

A white paper by Verdantix Ltd (http://www.verdantix.com/uploadedfiles/products/Verdantix%20Unilever%27s%20Strategy%20Leverages%20Value%20Chain%20Influence.pdf) describes specific measures at Unilver e.g., measurement of its environmental impact per unit of consumer usage i.e., per tea bag or per dose of detergent, with a goal to decrease that impact by 50 % between 2008 and 2020. The company also aims to move to 100% of its agricultural raw material sourced from sustainable or recycled sources by 2020. Finally total emissions across its global plants are expected to show a 5 % decrease per year – requiring significant improvements in its European plants to compensate for energy sources in developing economies. Are such supply chain wide sustainability efforts easier for global corporations like Unilever with its global footprint and thus access to a portfolio of choices ? Should one expect these changes to be driven by philathropic concerns or profit motives ? Do you expect such initiatives be be required to retain Unilever’s customer base or are they driven by anticipated compliance requirements ?

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Wal-Mart’s ecommerce approach to combat Amazon.com

Posted on April 3, 2012 by aviyer2010

An article in Bloombergbusinessweek (April 2, 2012) cites WalMart’s 8 % growth in 2011 vs Amazon.com’s 41 % growth as reason for WalMart to innovate in the ecommerce space. The result (a) Endless Aisle – which permits customers to order online any items not in the store, (b) Pay With Cash – for customers without credit cards to order online and pick up at the store with cash, (c) Shopycat – which scans a customer’s Facebook friends preferences and suggests gifts. Will these festures be sufficient to combat “scan and scram” – whereby customers scan items in the store and purchase from cheaper e-tailers ? Given Amazon.com’s lead, will WalMart be able to use its $ 264 billion US sales heft and physical store presence to compensate ? Will upcoming ecommerce transaction sales tax collection requirement level the playing field between WalMart and Amazon ?

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