Andrea Frederick's Profile

Uniqlo seems to be using its digital supply chain to its advantage. It’s clearly important for Uniqlo to be able to react quickly to changes in fashion and to their customers’ preferences. While Yanai is excited by artificial intelligence’s ability to “provide superior customer demand information,” I question how far that can go for Uniqlo. Of course, Uniqlo’s cloud-based platform has allowed their demand forecasts and supply chain to be proactive as opposed to entirely reactive. However, I wonder how “predictable” fashion really is, and therefore how predictable customer demand is. I’m not sure how much artificial intelligence would be useful to fashion designers. For example, if the red capri pants are rapidly being purchased, how would Uniqlo interpret this signal? Is the color red suddenly “in style,” or are capri pants riding a new wave of popularity? Having visibility into the supply chain can improve logistics, but I question how far it can go in terms of aiding designers.

Blockchain clearly addresses a major issue in the pharmaceutical industry: via normal visual inspection, it is often impossible to determine whether a drug is valid or counterfeit. Blockchain adds visibility and transparency at every step of the process.

However, I feel that some members of the supply chain will be more willing than other members to participate in this blockchain management system. I imagine that implementing this system would come at significant cost to distributors, for example, who might be working with tight margins. Will distributors be able to afford and manage the technology and labor required to manage the blockchain? Additionally, it might be challenging for distributors to manage drugs that are participating in this blockchain system alongside drugs or other products that are not participating in the system, as well as keep up with any changes in the blockchain technology.

Tabasco is facing a clear challenge as Avery Island is experiencing more frequent devastating weather events like hurricanes. Even if Avery Island continues to be “above water” for a reasonable amount of time, Tabasco needs to evaluate the costs vs. benefits of continuing their seed sourcing and other operations in this location. I’m sure that after a major natural disaster event, there is considerable damage done to the operations on Avery Island and significant costs are incurred. At some point, Tabasco will need to bite the bullet and shift operations to a more reliable location that experiences fewer extreme weather events. Unfortunately, their $5M investment in a levee might not protect them for as long as they expect.

Additionally, as government dollars are used again and again to bail out homes and businesses that are in the path of extreme weather events like hurricanes, there may be incentives offered to Tabasco to move their operations. However, I understand that part of their legacy and brand is captured in their history on Avery Island, which would be hard to walk away from.

Water is an important ingredient in beer, and it’s in the Brewers Association’s best interest (and the world’s best interest!) to consider the impacts of a diminishing clean water supply. In addition to improving the ratio of water usage to beer produced, I wonder if breweries could consider how to alternatively source their water, as the cost of fresh water will likely rise if climate impacts continue unabated.

Would it be feasible for brewers to invest in technology that could increase the availability and access to water? For example, a San Diego brewery has leveraged technological advancements to produce a beer that uses treated sewage water as a main ingredient [1]. Drinking former sewage water sounds like a crazy idea, and it may be too unappealing for the majority of consumers, but an investment in technology of this nature could potentially pay off for brewers in the long-term.

[1] David Moye, “San Diego Brewery Makes Beer From Treated Sewage Water,” The Huffington Post, March 20, 2017, https://www.huffingtonpost.com/entry/stone-brewing-toilet-to-tap_us_58cc60c7e4b0be71dcf4fc2f, accessed December 2017.

Given that Korea and China have a history of tense political negotiations, I agree with the author that Lotte should investigate opportunities to partner with local Chinese firms for their stores located in China. Just recently in the news, and perhaps as a gesture to thaw relations, China has relaxed a bit on its restrictions of tour groups traveling to South Korea [1]. However, I think that the Chinese government has clearly showed its hand to Lotte: When Korea doesn’t behave the way the Chinese government wants, then Korean businesses will suffer the consequences. I wonder if there’s something that Lotte could do to demonstrate that when their stores suffer (or are not allowed to operate), then the Chinese customer and employee base suffers. It would be beneficial for Lotte to diversify their customer base and store locations so as not to be as reliant on the Chinese consumer, given that access to the Chinese market is not guaranteed.
[1] CNBC, “China partly lifts ban on group tours to South Korea, online curbs stay”, https://www.cnbc.com/2017/11/28/china-partly-lifts-ban-on-group-tours-to-south-korea-online-curbs-stay.html, accessed November 2017.

Going forward, I think it will be tough for GM to optimally distribute the sourcing of its supplies between the US and Mexico, given that the specifics of the NAFTA renegotiation are still in the works. Additionally, the optimal distribution could change in just a few years if the agreement were subsequently renegotiated again. I agree with the author that GM is treading a fine line between appeasing the public (that demands more domestic jobs) and GM shareholders (who want to maximize profits and minimize costs).

However, I strongly recommend that GM spend some time scoping the level of effort to shift some of its supply bases out of Mexico. If GM were forced to shift the sourcing of some of its automotive parts because of changes to NAFTA, the company would need to: 1) determine which parts are easiest to transfer to the US (i.e. which parts require minimal time to decommission the Mexican operations and start up the American operations), and 2) evaluate the difference in costs on a per unit basis (i.e. are there parts for which the difference in variable costs between Mexico vs. US is minimal?). GM should have an action plan in place in case the proposed “50% US content” mandate for duty-free imports is finalized.