Eddie Overy's Profile
Very interesting article! I agree that Airbus must keep its supply chain robust to avoid production delays and that should be one of their highest priorities. I also agree that Airbus should consider additional manufacturing capabilities in other parts of Europe.
I disagree that Airbus should definitely expand their production in China. Without seeing more data to support this conclusion, I’m skeptical because many of the components that go into final assembly appear to be quite large and heavy. I think that this would necessitate these larger components to be manufactured close to the final assembly location to keep transportation costs down.
I also think many of these same conclusions apply to the United States. Where possible, component production and final assembly/shipment should be localized. However, a thorough analysis should be done with scenario forecasts to consider the implications of potential transportation costs, tariff costs, and workforce resources.
Thanks for an interesting read Tristan! I would push back that Costco actually needs to digitalize their core business as online grocery sales only make up 1.9% of all grocery sales (see article below). I think that in the short-term they should focus on their core mission of providing low prices to customers in bulk. I don’t think they should ramp up online sales infrastructure in the short-term as this while squeeze their margins and could cause prices to rise in store to make up in the difference.
In the medium term when online grocery stores may actually become substantial, I think Costco should look for an acquisition that can enable them to quickly ramp up their online presence so that they then don’t see their sales erode. In particular, they should focus on building this presence and infrastructure in high metropolitan areas where car ownership is lower and therefore food delivery services are more widely used.
Thanks for writing about such an important topic! I do think retailers have the responsibility to focus on this issue, much like Tesco is doing. I think Tesco needs to do a better job, however, of working with consumers as waste must be considered end to end. For example, a couple points you highlighted that Tesco is doing to improve on this problem are donating more food to charity organizations and also packaging in larger bulk packages with a lower overall cost to the consumer. However, both of these “improvements” seem to pass the buck onto the consumer. Charities will definitely use some of the food but some may still go to waste and it’s important that this is measured and considered. Also, consumers may buy more in bulk but then have more waste because they didn’t need to buy so much. So while these improvements help some, I think it’s important to not overvalue the improvement and rather to look at the overall waste cradle to grave.
I do think that consumers should try to buy more locally as the distribution can cause a lot of losses throughout the whole process. It’s important that when buying local that the local processes are still efficient though. If the local production is not efficient, it could have a negative impact on climate change. I do think that Tesco must also look towards the future and invest in areas that might be better suited for production and distribution when taking into account changes from global warming, as well as trying to partner with organizations that invest in preventing climate change.
Thanks for the informative article Aimmy!
I agree that Target will have to make some changes in the future to survive in this increasingly digital world. I agree with 2 of the actions you mentioned that they are pursuing: Opening smaller store concepts and RFID. With the great recession and rise of ecommerce, Target has been hit doubly hard with customers moving to discount stores and Amazon. Opening smaller stores is a great way to combat against discount stores as they may be able to convince customers to enjoy the more convenient and satisfying experience of a mini-Target store than save a few dollars at a dollar store. Also, I think Target must embrace technology in their existing stores using RFID and other technologies to be more vigilant in their inventory management.
I don’t think that Target should move outside of its core to build many more distribution facilities, however. I think Target should integrate its online platform into its existing store presence. This would mean encouraging more in-store pickups. But also, I think Target should make it much easier to know online exactly which products are at the local store, how many are currently in stock, and exactly which aisle to find them. By having a Target app that could allow a user to walk in a store and easily visualize exactly where desired/recommended items are would help the time-sensitive consumer have a quicker and more enjoyable in store experience.
Great article Reed! Can the RAV4 still be profitable with Canadian assembly? While I do think Toyota should actively engage with Trump to ensure trade measures can help them remain profitable in the US, I don’t think Toyota should make any large moves such as building a RAV4 assembly plant in the US quite yet. I think that any potential regulations could take awhile to come into effect and with presidential elections every 4 years, it’s too difficult to make a long-term decision to build a plant based one president’s stance.
How long would it take to shift assembly to a domestic plant and will that even matter with 60% Japanese parts? Can parts be acquired within NAFTA countries instead of Japan? I would foresee it taking several years to shift assembly to a domestic plant and therefore don’t agree in pursuing that. They should start to qualify 2nd suppliers in Canada and the United States to hedge against potential trade changes, but but in the short-term, Japanese parts are high quality and very cost effective, and I don’t see trade changes happening quickly enough to press Toyota into making drastic changes. In fact, Toyota still says it’s more cost effective in the current trade environment to build a Camry in Japan and ship it over than produce in the US.