Arnold Braunschweiger

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On December 1, 2017, Arnold Braunschweiger commented on Could smart supply chain financing have saved Toys R Us from bankruptcy? :

Thank you for this really interesting essay Elle! I agree with the comment of AB that the death spiral for Toys R’ Us probably could not have been stopped anymore, even if supply chain financing would have been more accessible. Upon some research, I believe that a focus on the wrong competitors and bad managerial decisions already doomed Toys R Us years ago. The company succeeded in late 20th century as “category killer”, which means that they sold products of only one category (toys) to reach a size and economies of scale that general retailers can’t match. This strategy only worked until really massive retail chains like Walmart and Target became so large that their toy sections could compete with Toys R Us. This led to Toys R Us losing value and market share and ultimately to its purchase by KKR and Bain Capital in 2005. Toys R Us got restructured and kept trying to fend off Walmart and Target, while it didn’t react to another new trend: Online retail. Amazon increasingly started taking market share from brick and mortar retailers. Overwhelming competition and massive accumulated debt finally led to Toys R Us’ downfall. A detailed description of this process can be read in this article:

While I think that Toys R Us’ bankruptcy was inevitable, I agree that SCF can add a lot of value to supply chain management. I’m not sure, however, to which extent a bank would be willing to “consult” its customer on supply chain management. I think that Citi would have to essentially develop a new business besides its core business, banking. Additionally, banks will probably be slow to learn and adapt to new requirements in a role as supply chain advisor. If a fintech startup driven by industry experts acts quickly, it is probable that it develops superior competency as supply chain advisor and adds more value than a traditional bank like Citi.

On November 29, 2017, Arnold Braunschweiger commented on In the Eye of The Storm: An Energy Giant´s View on Climate Change :

I’d answer the question about what Exxon can do about its contribution to climate change in short, by saying that the company probably doesn’t have too many incentives to change their contribution to climate change. According to the International Energy Agency, demand for fossil fuels will continue to increase in the next decades, especially in the next 10 years:

Given that ExxonMobil is still mostly focused on the international oil & gas business, I assume that they will try to reap these business opportunities. Given this perspective, I think that ExxonMobil could leverage its resources to at least maximise all efforts to limit emissions by installing filter systems and improving its energy efficiency. As Lynn pointed out, the clock is ticking for ExxonMobil and the company claims to already invest in renewable energy resources. When reading the essay, however, its supply chain efforts rather indicate that ExxonMobil is trying to protect its oil and gas business model against the impact of climate change.

This essay about Nordstrom is a great example for the potential of supply chain digitalisation. Virtual Reality (VR) is highly promising for a luxury retail chain, because its customers are wealthy enough to be likely early adapters of VR applications. Usage of VR should enable Nordstrom to learn about individual customers and customer behavior patterns in certain regions. This should in turn allow the company to manufacture and pre-ship goods according to trends.
The essay, however, also mentions drop shipping that is already applied by Nordstrom. If the company learns more about customers using VR and increases automatic supply chain management, it can extend drop shipping to maximise inventory holding costs.

On November 28, 2017, Arnold Braunschweiger commented on Is ADM Ready to Feed a Warmer World? :

This essay clarified the importance of control and overview of weather for companies that depend on agricultural production. You mentioned that the agribusiness sector is the least digitised sector in the world. Potential for increased information exchange is huge, as companies like ADM could benefit tremendously from quick information availability about the impact of extreme weather events. In this regard, the supply chain of a company like ADM should benefit greatly from integration of weather forecasts and reports with feedback from farmers and suppliers. Additionally, a large company like ADM might look into the potential of weather modification in order to help large suppliers prevent extreme weather events before they destroy crops:

On November 28, 2017, Arnold Braunschweiger commented on Supply Chain as Source of Competitive Advantage :

This essay captures a broad range of digitalisation impacts on supply chain management. Immediate focus areas and the long march considerations show that information exchange, forecasts and coordination can benefit greatly from digitising supply chains. As supply chains become totally dependent on data and digitalisation, cyber security will become increasingly common. This article lays out just how critical this aspect is:
Companies should prepare plans to prevent and to react to such attacks. Strict implementation of protocols should help in prevention of attacks, while clear communication and quick reactions are critical to limit damage after a breach.
The question regarding emerging markets is interesting. While digitalisation of supply chains should theoretically be beneficial as well in such an environment, there are more potential sources for mistakes and problems than in industrialised countries. Government authorities in emerging markets might decide case by case, causing volatility that is hard to account for in digitalised supply chains. Transportation systems might break down more frequently, sourcing of supplies can be more difficult. These problems can be solved, but only if vertical integration of the supply chain is deep enough to enable a company to control as many of these volatile aspects as possible.

This is an excellent article that showcases how innovations in supply chain management can be introduced and pushed downstream effectively. In Barilla SpA, we learned that changes in the management of supply chains can sometimes be difficult to implement.
LL Bean first found a way to utilise available data itself by creating an 18-month forecast. In a second step, it shared relevant parts of information with suppliers who could immediately see the benefit for themselves as they could react to demand by LL Bean faster and more precisely. On the long run, suppliers should be able to reduce inventory holding costs and excess production. LL Bean can try to capture some of this value and decrease its costs. If trust between LL Bean and suppliers remains stable and suppliers keep believing in this system, this is a win-win situation. It only makes sense to further refine supply chain visibility by introducing more detailed measurement tools.