April 2016 Archive
Professor David Simchi-Levi, a supply chain risk expert at MIT who has done much to develop the time to recovery (TTR) concept, agrees that Toyota has taken steps in the right direction. Nevertheless, as long as its manufacturing and sourcing operations continue to be heavily based in Japan, it will be more prone to disruptions than rivals like Honda and Nissan, which have more distributed supply chains.
April 28, 2016
Keeping it under your hat (Economist)
APPLE and Tesla are two of the world’s most talked-about companies. They are also two of the most vertically integrated. But the renewed fashion for vertical integration will not sweep all before it. For the most mundane products the logic of contracting out still reigns supreme and today’s bundling is less ambitious. Apple, for instance, contracts out a lot of production to contract manufacturers such as Foxconn (though it keeps them on a tight leash). Integration is also hard to pull off: Tesla lost some of its shine on April 11th when it recalled 2,700 of its sport-utility vehicles because of a glitch. Striking the right balance between doing things in-house and contracting things out is clearly complicated.
April 27, 2016
The Mirage of a Return to Manufacturing Greatness (NYT)
Manufacturing powered the economic development of today’s advanced nations. But in the developing world, industrial employment is peaking prematurely, before poor countries have had a chance to get rich.
April 26, 2016
Toyota’s ‘Quake-Proof’ Supply Chain That Never Was (Fortune)
You don’t need to build an earthquake-proof supply chain, to secure this, only a network that bounces back from shocks faster than competitors.
April 26, 2016
Why There Are More Consumer Goods Than Ever (WSJ)
In the past, the upswing in new products was driven by the emergence of new types of stores, as when natural-food and gourmet-food stores arrived in the 1980s. But starting in the early 2000s, the Internet became a driving force in product introductions. And Facebook is the latest manifestation of this trend.
April 25, 2016
Why General Motors Is Shutting Down 4 U.S. Factories
GM said that parts shortages related to the recent earthquakes in Japan will force it to shut down four U.S. plants for two weeks.
The use of 3D printing to produce custom components of athletic shoes for the general consumer market is in the early stages of what promises to be a long road. The race between Nike, Adidas, Under Armor and New Balance essentially started late last year, picked up pace this year, and promises still more jostling for position in 2016 and 2017.
April 20, 2016
RFID Brings Lululemon’s Inventory Accuracy to 98 Percent
The company’s ability to access RFID-based inventory data and choose to sell goods online or in store accounted for 8 percent of e-commerce revenue for the quarter.
Toyota Motor said it would suspend much of its production at plants across Japan this week after earthquakes in the country’s south led to a shortage of parts, while some other manufacturers extended stoppages due to damage to factories. The earthquakes on Thursday and Saturday, which killed at least 41 people, reflected the vulnerability of Japanese companies to supply chain disruptions caused by natural disasters, and also highlighted the “just in time” philosophy pioneered by Toyota and followed by many others.
April 14, 2016
Will Amazon’s Effort In Fashion World Be Successful?
Bloomberg recently mentioned that Amazon changed prices an average of 9.2 times per item whereas Macy’s changed 2.1 times and Kohl’s changed 1.5 times within the specific period. This shows the ability of the platform to try different price points to increase sales and maximize margins. All these efforts yielded a growth rate of 25% in the last year for Amazon. In comparison to this, Macy’s Inc. fell 3.7% and Kohl’s Corp. grew by a paltry 1%.
Sensors are proving to be one of the most widely adopted emerging technologies impacting supply chains today. The sensors provide data on the location and the condition of a company’s supplies and products as they are transported around the globe.They allow companies to gain end-to-end visibility of their supply chains and reduce risk. It’s a benefit more organizations are taking note of and continuing to drive adoption rates up.
April 11, 2016
Hands, heads and robots work in sync at Amazon warehouses
Amazon’s DuPont fulfillment center is a sort of laboratory for how the company is using robots to do much of its heavy lifting. But it also shows how the human workforce is not only necessary but superior in some respects.
April 10, 2016
Tesla is not the next Apple
Just because Apple can sell hundreds of thousands of $500 phones on faith, purely on the strength of the firm’s design credentials, is not an indicator that Tesla or any other automaker can. Tesla has proven it can create massive hype, but it has yet to show it can embrace the unsexy and extremely challenging task of building complex cars at mainstream scale with competitive quality. Instead of trying to be Apple, Tesla should be focused on developing the skills that will allow it to thrive in the brutally competitive, 90 million car-per-year market for boring, reliable transportation.
April 10, 2016
Eight Technologies Revolutionizing Supply Chains (Forbes)
These are the eight most-mentioned technologies supply chain professionals anticipate will revolutionize supply chains in the next ten years:
1. Predictive Analytics
2. Robotics and Automation
3. Sensors and automatic identification
4. Wearables and mobile technology
5. Driverless vehicles and drones
6. Inventory and network optimization tools
7. Cloud computing and storage
8. 3D printing
The first differentiator is that Home Depot has the biggest full-service home improvement store presence in the U.S.
The second is that the company has invested heavily in supply chain and logistics technology. Back in 2012, Home Depot purchased a data analysis and pricing company to help make merchandise decisions and product price reduction decisions. Over the last two years, the home improvement store has also rolled out tools for its associates to be able to locate items in stores more quickly, introduced new customer ordering options like in-store scheduled pick-up, and integrated third-party company installers into the company’s communication system to enhance responsiveness to customers. In 2015, Home Depot also announced that a new supply chain synchronization system it had been piloting would be extended to new markets to increase sales efficiency and increase product delivery times.