DC, your piece highlights an example of how wide-reaching protectionism based policies can be. ArcelorMittal has operations globally, but their collaborators are also effected by the potential change in policy. I believe this moment is an opportunity for ArcelorMittal to create strategic alliances with both their customers and supplier, as well as potentially finding nonprofits that can rally around the same cause, creating a strong resistance against the isolationism driven policies. An isolationism based policy change would negatively impact all players that have a stake in global economic success. Joining forces will allow their cause to have a wider reach as well as bring about increased funding.
I was concerned when you mentioned ArcelorMittal’s first response was to petition in favor of the trade restrictions and increasing domestic investments. I believe this is a short-term view and may provide a window for their more globally conscious competitors to swoop in and take advantage of the opportunity, creating alliances today that may lead to strategic partnerships tomorrow.
UserError, you’ve painted a concerning picture for the Ford Motor Company in a post NAFTA world. The plan you outlined for Ford’s efforts to localize the supply chain for the “light truck” segment, sold mostly in the US seems like a sound plan. However, this is only one segment of their market. I’m inclined to believe this strategy will not work for their entire portfolio, because as you mentioned, they have a network of low cost supplier in Mexico.
For the remainder of their products, I think Ford needs to rethink their strategy in emerging markets. Most recently, Ford, along with their competitor, GM, withdrew from the Indian Market . It’s unclear what drove them to make this decision, but I believe moving forward, as Ford is challenged domestically, they must invest in both a supply chain and customer base in emerging markets such as India and China.
1.Reuters. (2017, May 18). GM Is Pulling Out of India. Retrieved from Fortune: http://fortune.com/2017/05/18/gm-india-withdrawal/
SEA, you pose an interesting suggestion about Starbucks diversifying their beverage portfolio. I agree that Starbucks’ profits may suffer in the near term as they identify either more resilient strains of coffee beans or new areas with ideal climates for growing coffee based on shifting weather patterns. Adding new beverage options or expanding the selection of teas could be a great way to ensure revenue during this transition and dip in coffee profitability.
Therefore, I was confused to see that Starbucks recently sold their Tazo tea business to Unilver (https://www.forbes.com/sites/ronaldholden/2017/11/02/starbucks-unloads-tazo-will-concentrate-on-teavana/#463cc3e747ba). However, it appears Starbucks has made this move to concentrate their efforts on their Teavana brand, partnering with Anheuser-Busch InBev to produce ready to drink options. I’m interested to see where this journey takes Starbucks. Will they decide to shift a focus from developing sustainable coffee beans if their tea business continues to grow? As a pumpkin spice latte lover, I hope not!
AH – very interesting piece about how technology can be used in the public sector to increase transparency and efficiencies. After driving in Boston for many years, I would love a way to interact with the city to understand where construction, traffic and pot holes may be. I’m curious how GeoHub interacts with users’ mobile devices to provide active feedback to the city and other commuters on current traffic patterns similar to Waze? This functionally could provide benefits to both drivers and the city, driving user adoption, which I imagine may be difficult with entrenched habits of map applications.
However, I’m worried users will be skeptical to share their data because of general distrust with data security, especially involving the government. I encourage the city of LA to focus on how to make this platform secure for their users and find ways to build trust. If secured appropriately, I envision this being an excellent way for a city to meaningfully engage with their citizens in a two-way conversation that leads to more efficient use of public resources. However, I’m not as optimistic about predictive policing. The police force’s interaction with the public is so highly scrutinized today that the LAPD should be extremely careful utilizing predictive tools.
JH, thanks for the great post! I think you highlighted the ways in which Bouqs has been able to use digital tools to remove the middle man in the flower business, delivering a better-quality product to their customers. What I worry about is customers need to have instant gratification. Although the flowers at the store may die sooner, they’re also available to me right now. How will Bouqs overcome this consumer behavior? I hope they won’t be sucked in to opening “pop up shops” or other brick and mortar stores, which would require them to hold inventory and compromise their value proposition. My suggestion for a competitive edge for Bouqs would be to form partnerships with a more geographically diverse set of farmers to decrease the time from customer order to delivery, as well as enable global expansion. If they are looking to enter the Asian markets for example, I suggest they create a network of Asian flower farmers. I believe their model could be most impactful for consumers in close proximity to the farmers.
I think andrea.nichols brings up a salient point about the product loss during transportation. After further review of figure outlining the cold supply chain, it appears that the product experiences the most drastic temperature swings while in trucks or plane, ranging from -5 oC upwards of 50 oC on a truck or 80 oC on a plane. No wonder the ice cream is being damaged! Unless Nestle has been spending money in R&D working to create ice cream with a much higher melting point, I suggest they focus their efforts on ensuring temperature controlled transportation methods.
You mentioned that they were working on RFID cold sensors to be used throughout their supply chain. I’m curious what actions this information is driving while the product is in transportation? I can appreciate that in the fragmented ice cream market, Nestle does not own all of the trucks at every point in the delivery process. Perhaps, Nestle could create temperature controlled boxes that store the product while maintaining an acceptable temperature range. While I don’t imagine this to be a simple solution, I do believe an investment of this nature would generate material cost savings for Nestle.
Wow, great piece kaizen! I think you specifically called out a crucial aspect of digital supply chains with respect to system integration. Although many companies have supply chains with digital systems in place, if their are walls in between the systems, any connection point offers the opportunity for a digital break down, and communication to fail. I agree though that relying too heavily on predictive data to drive product mix could be detrimental to their operations as well as their consumer perception. I’m most concerned with where their gathering the inputs for the predictions.
If it’s just based on historical purchasing patterns, the predictions may not accurately describe future behavior. Predictions could be improved if Chobani is using a mix of historical data, along with considering what flavor profiles are selling in tangent consumer markets, such as the popular flavors of coffee or even cake. However, this runs the risk of flavors not translating to yogurt well, leaving Chobani with excess unwanted inventory, or even alienating long time customers who prefer seeing traditional flavors on the shelf. I believe Chobani has to find the right balance of catering to their traditional customers while acting swiftly on more adventurous flavor profiles to stay ahead of competition. However, I believe this balance with be difficult to find with limited shelf space and pressure to reduce inventory throughout their supply chain.
I agree with Shalei that while physical brick and mortar stores might transition to smaller spaces or decrease in store count, they will be here to stay for the time being. However, I believe the main trade off Target has to consider is that the in-store experiences is curated to drive sales, but at the cost of efficiency. Target’s in-store experience increases the time customers spend in the stores and creates an unconscious need for superfluous items. If Target streamlines their shopping experience, do they risk losing sales?
Previously, Target had utilized a mobile phone application that engaged with their customers while shopping in store by providing additional discounts and providing points towards a customer loyalty program. The app design supported the consumer behavior of meandering around stores and “discovering” additional deals. This app has now transitioned to provide a map of the store, guiding the consumer to specific products and deals. This transition seems to provide Target with operational efficiencies, potentially needing less staff to guide customer and more predictable sales that then drive back end efficiencies. Additionally, the customer perceives a more efficient shopping experience. However, I can’t help but wonder if their overall revenue might decrease due to these efficiencies and shifted customer shopping patterns? I believe the Target should incorporate suggestions for the customer based on their shopping history in the app to continue to drive a discovery based shopping experience, while engaging digitally with their consumers.
I agree that Hershey is in a pivotal place in terms of threat to their future cocoa supply based on climate change concerns. Your suggestions outline in this article make some great points on how Hershey can collaborate with current farmers to increase yields with the current state of cocoa production. However, like you mentioned, it doesn’t seem like this tactic will be effective enough to close the gap in terms of future cocoa supply. Rather than focus on gaining more collaborators to further improve their current processes, my suggestion would be for Hershey to utilize the climate modeling you mentioned to consider looking globally for locations that may be suitable for cocoa growth in the next ten to twenty years. There may be additional locations that, based on shifting weather patterns, will become hot and humid similar to current West African climates. I suggest Hershey locate these areas and form strategic partnerships will farmers to start growing cocoa in these regions, while sharing the yield improvement learnings from West Africa. I believe this strategy will lead to long term security of cocoa supply.