Blue Ocean

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On November 25, 2017, Blue Ocean commented on Walmart in the Face of Isolationism :

I found this article especially interesting as it provides an insightful peak into how isolationism is impacting the lower end of the supply chains beyond the U.S. manufacturers that are often singled out for criticism.

On what Walmart is doing to combat the prevailing changes taking place in its supply chain, I agree that their measures would effectively move some of their products to be made in American and therefore create new jobs in the U.S. However, the real question is how meaningful this can be and how much influence a retail would have on the up-chain manufacturers. Based on the fact that price is the key competitive advantage for Walmart over its global competitors, I believe it is likely that the overall impact of Walmart’s measures would be relatively insignificant and more about sufficing the current trend then enact deep and lasting changes.

On November 25, 2017, Blue Ocean commented on Made in America? Ford Motor Company’s Battles with Isolationism :

I found this article very interesting because Ford could be at the center of a powerful wave that is redefining the boundary of international supply chains.

On how Ford is reacting to the current administration protective measures, I do agree with the fact that U.S. manufacturers are adopting to this new age by both signaling one direction (With cancellation of the new Mexican plant) and simply just going the other when the economic incentive is just very clear (With the new light vehicle plant in China).

However, I do believe that the current administration rose to power on a influential underlying trend in the U.S. economy. If we look at historical data, over the past decades when globalization was taking place, although both import and export nations often mutually benefited with relative trade advantages, the parties in the developed market that benefited the most from this trend was the holders of capital instead of the labor population themselves. This means an equable means of sharing of wealth and success could be at the heart of the issue in developed market.

On November 25, 2017, Blue Ocean commented on Nike: Leading the Path to Fighting Climate Change :

It is certainly interesting to know that Nike is taking up such leadership role in terms of being the change agent in its supply chain to advocate for social responsibility and cleaner products. I believe in my experience and in the experience of other Nike users around me, the company social responsibility image is still somewhat impacted by the child labor allegations from the past.

In terms of the potential of the Nike program, I believe this will really depend on the potential chain reactions of others in its ecosystem. For example, if consumers apricate Nike’s approach and are willing to pay a premium on eco-friendly products, then this might cause competitors of Nike to follow and therefore leading to more positive changes. In addition, if developed market governments can enforce top down requirements for eco-friendly products, then industry wide changes would become more likely.

On November 25, 2017, Blue Ocean commented on Is Child Labour the Only Way Forward for Tesla? :

I found this article to be a very interesting read as I had no clue that Telsa is such a larger driver behind the demand for child labor in Democratic Republic of Congo.

In terms of the potential solutions, while I do agree that ultimately, the only long-term solution would be going up chain in terms of owning / controlling clean supply in North America, I believe in the short to median term, there might be other alternatives that Telsa can consider. The rationale for this is evident in the fact that 60% of the current supply is sufficed by Congo and that it would take years to develop new sites in North America. Therefore, it is unlikely that Tesla would be able to completely avoid sourcing from Congo at least in the short to median term.

Therefore, I believe more practical near-term approach might be to work closely with suppliers from Congo to ensure that child labor in minimized. Also to mitigate cost increases from potential price shock, Telsa might wish to consider hedging, effectively buying insurance against potential increases in the price of cobalt. I believe these maneuvers will allow Telsa to navigate its tricky supply chain dynamics in the short term and provide it the time needed to move up the supply chain in the longer term.

I found this article to be very interesting because I believe JD is currently at the center of a wave of transformational changes taking place in the retail industry in China, and that most of JD’s experience has more generalizable implications on the broader sector.

On the data side, I agree with growing importance of data where big data and artificial intelligence can really have strong impact in not only product design but also supply chain financing and other areas along the supply chain. For example, I’ve spent considerable time with Fintech firms in China to work out the details around ways to leveraging data to enhance the lending quality. Areas such as leveraging JD’s inventory info to make better lending decisions for small to median sized manufacturers and wholesalers and using the inventory data to lower overall logistics costs are just some prime examples of such trend.

In terms of the potential to create monopoly like platforms, I believe this is where the government need to step in to prevent the potential damage to other players along the supply chain and the end consumers. This is evident in the winner take all nature of the e-commerce sector and therefore government intervention is likely needed to prevent predatory actions by the dominate market players.

On November 25, 2017, Blue Ocean commented on Udacity and the evolving supply chain for highly technical labor :

I found this to be a fascinating read because it captures the powerful trend that is reshaping the higher education market and the broader labor supply chain.

Due to rapid advancement of technology and therefore the rapid changes of skilled labor need, qualified candidates are becoming ever more scare. A clear evidence of this trend can be found in the rapidly improving salary packages of engineering talents in the technology sector. Not only are these packages improving rapidly but it is also not uncommon to hear that tech giants are acquiring entire start-ups to get their hands on the most thought after human talents.

In terms of Udacity’s approach, I do agree that there’s tremendous amount of value created in shorten the 2 to 3 years training cycle down to 6 to 12 months and in the fact that these online programs cost quite a bit less than their traditional counterparts. However, I believe a major issue here is the quality of these Udacity trained personnel vs. others from more traditional schooling backgrounds. Due to the lack of hands-on learning and social interactions, it is highly unlikely that the online only option would become a meaningful replacement to traditional schools. Therefore, I believe it would be very interesting to envision a blended approach where platforms like Udacity can play their part to spread quality teachings while offline classrooms can be turned into project based learning arenas.