Very interesting read! I think that the ONS has a lot possibilities to improve the energy delivery efficiency, since the Brazilian energy market is still centralized (as compared to most of the mature energy markets).
Here are my thoughts on your two options:
1) Better supply prediction: I think that the prediction cycle should not be too difficult to manage, given that 60% of total energy generation come from hydro sources. As a comparison, Germany generates 25% of its energy demand from renewable energy (wind and solar). There are commercialized and proven programs on the market. For instance, the Wind Power Management System (WPMS), developed by ISET, is used operationally by three of the four German transmission system operators. I think that ONS can definitely benefit from knowledge sharing with countries with higher renewables affinity.
2) Active demand setting: Yes, you are right that household demand is more volatile than before. Given that the residential energy consumption in Brazil only make up to 10% of the total energy demand mix, I would focus on the industrial sector (30% of total energy demand). There, I think that ONS can benefit from more systematic incentive setting. For instance, in DSM (Demand Site Management) programs the energy provider and energy intensive industries (e.g., steel production) can agree on a set demand schedule (1 hour discretization) 24 hours ahead of time. In return for the predictable demand energy intensive industries can enjoy a more advantageous electricity price.
Great article, Kylie! When I worked at GE in Germany it was indeed one of the most pressing issues we had to deal with. I think that the organizational structure of GE is set-up to excel in an international environment. GE has a matrix organizational structural. Each division belongs to a region (e.g., Germany) and an industry (e.g., renewable energy). With its specific constellation GE is able to cater to country and industry specific needs. For instance, Germany’s renewable market is dominated by smaller wind turbines (for a conglomerate of households) whereas the renewable market in the US is dominated by large wind turbines (for large wind parks). By having the workforce and the sales force locally (e.g., in Germany) GE is able to reap two major benefits: 1) Cost benefits from minimizing transportation and 2) Knowledgeable sales force with local sales relations. Those benefits will definitely offset the tax benefits from manufacturing in the US. I think in the long-run manufacturing companies in general need to orient themselves more towards the sales market than their original country of origin.
Very interesting read. In addition to the previous comments, I think that Samsung can achieve mutual benefits by having a balanced mix of high-tech and low-tech production sites in the respective countries. For instance, Samsung has several assembly sites in China for home appliances. While Samsung can leverage the low-cost labor, China has no incentive to provide the competitive advantage that helps Samsung compete with its major producer Hai’er. On the other hand, China sees Samsung as a major strategic alliance in developing its semiconductor industry (right now Chinese manufacturers are more than 2 generations behind Samsung). In its turn a well-developed semiconductor industry is key to staying competitive in the mobile phone market that is lead by Huawei in China. Carefully balancing out this relationship, Samsung should definitely be able to leverage its technological leadership to maximize its cost benefits.
Very interesting read! While AR seems to be inevitable in logistic companies, because it increases labor efficiency in an aging labor force, there are two points I would like to raise.
First, in order to realize the full potential of AR in the short run DHL needs to make sure that its operating system is digitalized accordingly. In 2014 General Electric has launched an effort in Germany to equipment maintenance workers with AR glasses to facilitate their maintenance work. GE has failed to integrate the AR system into their old operating system . For certain operations workers needed to input information twice – once for the AR system and once for the GE operating system. As a result, the overall efficiency of the worker decreased while the efficiency for the actual maintenance work increased.
Second, in the long run I think that logistics companies should aim for full automation of the supply chain. For instance, DHL can draw inspiration from Amazon’s fully automated Kiva picking system.
Outstanding essay! An efficient supply chain becomes even more important today – in a market of consolidated OEMs with fragmented supplier bases.
I think you are absolutely right in saying that additional levers need to be pulled in order to somewhat build up a reliable supply chain for BMW. I would primarily see three additional levers:
1) Centralization of intelligence: With many suppliers interact with, BMW needs to find a common communication channel to centralize the information streams. It could for instance leverage the SupplyOn channel that major global automotive suppliers (including Bosch) have established. That platform in its turn serves as a single source of truth to BMW.
2) Closer interaction between steps of the value chain: BMW needs enable closer interaction between engineering and procurement in order to reduce procurement issues in the roots. For instance, engineering can eliminate the number of required critical parts in order to minimize procurement efforts and thus supply chain risks.
3) Organizational changes: On the C-level, BMW needs to make the CPO a “true member” of the senior management team. The CPO should not only report to the CEO, but also participate in key management processes and be a member of relevant cross-functional committees. On the employees-level, BMW needs to clearly separate strategic and transactional roles (putting more emphasis on the strategic roles).