Very interesting topic Melissa! I agree with your suggestions to lobby for tariff reductions/open trade as well as the option to open new or purchase existing production sites outside of the UK or license production to an external party outside of the UK. I also agree with Angel’s comment regarding the option of moving the headquarters outside of the UK if the costs of moving it vs. paying the tariffs makes sense in the long run. An additional lever would obviously be raising prices but customers would not appreciate that especially since so many other alcoholic beverage companies will not be effected and will be able to maintain prices – all other things equal.
Thanks for sharing Kamau! I had not realized how thin Target’s margins are and it was interesting to hear what Target has been up to in regards to combating the 20% proposed border tax. I would question the US hourly figures as well as the supply of willing manufacturing workers in the US a little bit: GE Appliances recently brought jobs back to the US and pay around $16/hour average. In addition the job website signups fill up very quickly every time they set out to interview for hourly assembly positions (never a lack of people who want to work). This could be due to the region of the country though and this situation calls into question the issue of minimum wage in the US and what is enough to be considered a living wage.
Karen, thanks for the interesting article! It is refreshing to see a company putting their money where their mouth is in regards to sustainability and climate change by being mindful of choosing low impact raw materials and manufacturing processes, adequately conveying info about their cause to consumers, donating to environmental causes, and offering repair and recycling services to further combat climate change by reusing and/or reducing the amount of new products needed. Their Worn Wear programs are really neat: you can recycle gear you are tired of, purchase used products instead of brand new, and repair damaged products for a small fee or in some cases for free.
Thanks for writing about such an interesting company, hak! I am shocked that Huy Fong Foods still relies on one supplier for the key ingredient of their most popular product and that they make a years worth of product over a 10 week period each year. Talk about a ton of inventory! Single sourcing is a risky strategy in general (at my old job we had to have two or more suppliers unless there was a ridiculously good reason in which case we had to get sign offs from people really high up in the company and actively search for alternative suppliers though this might be due to the fact that the company I worked for was very large) and I would imagine this is particularly true in agriculture due to climate change and the nature of farming in general (crops being susceptible to so many natural factors).
I also think you bring up a good point about alternatives such as dry peppers or using peppers beyond just a day old or even perhaps finding similar peppers of a slightly different variety. I find it hard to believe that a 2 or 3 day old red jalapeno would taste much different from a 1 day old red jalapeno and if they were willing to use slightly older peppers they could diversify their suppliers a bit easier since jalapenos can be grown across the southern united states. I would also be surprised if many people could actually taste the difference between the sriracha made with current peppers vs. either an older pepper or a slightly different variety of pepper but that could just my cynicism talking!
Great post Ketty! I agree with Mohamad in regards to scalability. Having visited and utilized the GE Appliances 3D printing lab (which contains dozens of models, sizes, and types of 3D printing machines), I know 3D printing to be a rather slow process. It can take several hours to produce an item depending on the size (shoes are pretty large) and quality (I would imagine a custom shoe for a consumer would need to be higher quality/resolution so it would take longer to print). For the time being, until there are some technological advances, I do not see 3D printing being used for high volume, mass production. The huge benefits of 3D printing currently lie in the customization and speed to market of low volume items aspects. These aspects can be huge differentiators for millennial consumers since we tend to like things customized to our individual liking.
Hi Josh, great article! At GE Appliances we used 3D printing for a variety of applications and were contemplating using it for several others. We used it for prototypes to speed up the process of designing new models but we were unable to utilize it for actual production due to our high volume needs. After we used the prototypes to prove assemblies and fit we would end up sourcing out the production or purchasing tooling to produce the various parts in house.
We were also able to use 3D printing to make a variety of assembly aid tools in house using our 3D printing lab. We could make tools that would precisely fit our needs quickly (such as ergonomic assist tools and poke yoke tools), without having to consult with a contractor to produce tools old fashioned way. Both of the aforementioned applications allow for quick iterations until we got what we wanted, then we could invest in a more permanent solution, if applicable.
One application we were considering using 3D printing for was production of obsolete service parts. After models go obsolete, we still try to carry service parts for several years in case the end customer needs them for any reason (this is actually very profitable for GE Appliances). The problem is, after we no longer produce the part we would have to do one of many options: pay the supplier more money for smaller volume of parts, run overtime to run the parts when we could squeeze it in then store the parts, run a bunch of the parts then find somewhere to store them, etc. If the service forecasts are low enough and especially for larger parts that would take up a lot of room, 3D printing these parts could be an excellent solution.