Thanks for posting! To take the contrarian view, I wonder if there are overall positives that will develop out of Nike’s response to protectionist policies? For instance, US manufacturing could have some distinct advantages over offshore including: lower shipping costs, decreased lead time, less markdowns, and higher customer responsiveness. Additionally, by expanding their factory footprint in the US, it’s possible that Nike will develop more automated manufacturing processes in order to avoid paying the substantially higher US labor costs, and thus in doing so create long-term cost saving advantages within their supply chain. I’m curious to see how this discussion develops and whether protectionist policies have the intended effects of bringing jobs back to the US or simply lead to companies choosing alternative offshore countries and/or increasing automated factories in the US.
Great article and questions posed Chip! To touch on the advantages and disadvantages of the Silvercrest engine, my thoughts are as follows:
Smaller fuel efficient aircraft could provide a strategic advantage to airlines looking to serve business travelers on long-haul routes. Due to the lower number of seats they could likely achieve a higher load factor (% seats filled) which could bring their cost per seat down if business travelers are willing to pay more for the comfort and convenience provided by this aircraft. Additionally, the airline may be able to fly routes that would otherwise be unprofitable to serve with a larger aircraft.
The unique aspects of this aircraft could prove frustrating for an airline’s fleet management. Take for example maintenance – the MRO (maintenance, repair and overhaul) work for wide-body jets (e.g, A380s) would greatly differ from the Cessna. If an airline were to fly introduce a new type of aircraft for long-haul routes usually served by wide-bodies, they would also need to ensure they had the necessary support to maintain them. The diversification in fleet combined with the global nature of long-haul routes may prove to be quite a big headache to take on considering the lack of performance history for this aircraft.
Curious to see how this shapes out!
Thanks for posting Justin! To respond to your question regarding the willingness of companies to sacrifice profits to increase necessary investment, I think a case can be made regarding the company’s specific strategy and time horizon. Though solutions to increasing the efficiency of water use such as investment in manufacturing tech could lead to profitability declines in the short term due to the large capital expenditures required, in the longer term it seems as though more resource efficient manufacturing practices could drive down costs and become a profitable competitive advantage. A win for the company and the environment.
In terms of supporting local communities, I see a huge opportunity for Coke to invest in more public and private partnerships. For Coke this would effectively outsource some of the expertise required to make the most impact in the specific geography by providing capital to often underfunded organizations with a mission to increase sustainability.
Thanks for posting Maud! I found the Brexit scenarios you shared to be very interesting in the context of Airbus’ continued operations. Given the threat of rising costs and lead times it certainly makes sense for Airbus to look at options to diversify its manufacturing base away from the UK. That being said, though the COO claims that it would be very easy to set up a new plant elsewhere in the world, my fear is that the ramp up time, human capital challenges, and costs implied by this move would in reality prove much more difficult for their operations.
I’m curious to see how the mere threat of their movement away from the UK (and the 110k jobs that go with it) will shape the ultimate decision of how the company will be treated in an increasingly protectionist environment.
Great article! I appreciate the approach to sustainability discussed which began with increased scrutiny into the process of manufacturing and then seeped into the materials themselves. I’m curious to see how companies like Nike that are very performance based invest in innovation to make products that are both environmentally friendly and outperform competitors in function.
To your question regarding the likelihood of competitors following suit, I’m optimistic. As brands begin to realize sales uplift from their CSR activities and see cost savings from more energy efficient and environmentally friendly, I believe sustainability practices will become more widespread.
This article opened my eyes to the creativity that exists within the sustainability space. Thanks!
This is a fascinating application of RFID to help retailers eliminate food waste. I’m particularly interested in how retailers may seek to use the data for pricing and promotional activity to further optimize their sales.
To your question regarding the weight on manufacturers to include this technology within their products I think there could be a role for the government to step in both lending support and increasing regulation in order to make RFID an industry standard. I think this could add immense value across the supply chain by also giving the manufactures insight into product demand and better integrating their production with the retailer’s sales.
Thanks for the thoughtful post Lia! I find it very interesting to think about the challenges you raised in the context of international expansion.
Firstly, from a product development standpoint, I’m curious as to how they are beginning to manage the production of clothing for different seasons as they seek to distribute to different parts of the world. E.g., Would the Australian winter collection simply follow the US production months later utilizing the same specs and fabric procurement? How does the difference in scale between countries influence this decision?
Secondly, I think this also poses an interesting question on the strategic location of their suppliers and the possibility for consolidation. Likely they ought to be optimizing to have suppliers as close to the country of final sale as possible after solving for country specific manufacturing costs. This being said, to your point on diversification of supplier place, there are also added expenses in not consolidating sourcing of goods to capture economies of scale.
This is a great read! Thanks for sharing your take.
I’m curious as to your thoughts on how competition in the healthy fast-casual market may help Sweetgreen’s supply chain through increasing demand on suppliers? As you point out in your paper, Sweetgreen is currently making investments in helping local suppliers develop their capabilities in the lead up to launch. In the future, as more restaurants look to leverage a similar supplier base do you think this could de-risk Sweetgreen’s supply chain or do you think it will add competition on the small pool of suppliers that currently exists?
Thanks for the interesting take on the future of grocery! You raised an interesting point on how Kroger (and other traditional grocers) will need to change their strategy of physical store footprint and distribution in order to meet the changing demands of consumers. I’m curious to know what you think this might look like – i.e., maintaining same stores as today with more e-commerce offering or closing stores to favor non-customer facing distribution centers? I could certainly see a pivot to smaller store locations in urban areas with a streamlined SKU count and in-store / mobile capabilities of having items sent to the front of store for pickup or shipment direct to home.
Another supply chain related question in my mind is how both traditional and online grocers will approach fresh products (e.g., fruits and veg) in the future. This is a high selling category for grocers that draws people into stores because people like to inspect before purchase. However it’s also a category that experiences higher waste due to the perishability. I’d be curious to see how stores can use data to address their approach to this category specifically.
Thanks for posting this Ian. Your paper provides an interesting dialogue as food delivery startups fight for market share in today’s competitive landscape. I found it interesting that Maple’s business model was so heavily dependent on assumptions of achieving economies of scale. To your point, it seems as though it would have been much more sustainable to grow from a simplified menu and offering within the NY metro and then to expand after gaining a user-base. It also seems as though they could have reduced waste through a stronger focus in building a supply chain with less perishable foods and/or employed more data in making decisions on quantities to purchase. Interested to see what Deliveroo chooses to integrate from Maple’s supply chain and broader operations post acquisition.
I’m in favor of Ocado’s strategy to help others digitalize their supply chains – specifically for traditional brick-and-mortar grocery chains. I think they could create mutual value in serving as an additional step in the value chain to traditional grocers as a last-mile-provider. This would allow Ocado to gain competitive data and potentially expand their own offerings in the future. Additionally, with their business currently struggling to make a profit, the revenue stream created through partnerships and/or consulting services could stabilize their finances and fuel growth.
The question of whether a software developer can create commercially viable educational platforms while simultaneously operating its own physical schools is an interesting one. The rise of Massive Open Online Courses (MOOCs) including iTunes U, Udemy, Coursera, Udacity, and Kahn Academy has certainly proven the market, though critics remain adamant that the experience within a physical classroom simply cannot be replaced due to the value of human interaction and inherent difficulty in replicating social learning behavior online.
I’d be curious to see how AltSchool may be able to leverage its existing US classrooms and software to reach less developed nations to create global peer learning opportunities (e.g., a classroom in California with a sister classroom in Myanmar funded by US revenue streams). While I tend to agree that it is difficult to fully replace classrooms with online learning, I do think AltSchool’s platform could be used to enhance classroom learning at scale in order to impact areas where better educational opportunities are most needed.