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On December 1, 2017, POMA commented on US Foods: B2B e-Commerce in Foodservice Distribution :

One added value that distributors could add to their customers is helping them reduce waste and therefor costs. For example, US Foods can add additional features to its online platform that would allow restaurants to input how much produce they are throwing away throughout the week due to spoilage. The online platform can then make suggestions to restaurants on how much to order. Although this will cause a reduction in sales volume, distributors can charge a premium for using the system recouping some of the lost profits. In addition, the distributors can make the delivery of produce automatic, where the same basket of goods would be delivered every predetermined number of days. Restaurants will have the option to modify the orders to increase/decrease the order size or add certain items. By eliminating the need to reorder produce used regularly, the distributor is helping the restaurants minimize indirect labor.

I see very little negative impact for players up the supply chain from this innovation. I believe that the digitalization of produce ordering will save both time and money for restaurants.

Although the concept of indoor farming seems unnatural and something from a distant future, large-scale use of indoor farming might prove to be not only more sustainable but also the only means by which the world will be able to feed its growing population.

As the environment changes, it is not only getting hotter, but it is getting more unpredictable. The same region can be affected by extreme heat followed by extreme cold [1]. Growing crops will become increasingly difficult in such an environment, even in regions that are not characterized by drought or extreme cold. As world population grows, it will put pressure on land resources and prices, which will be driven higher by lower supply and higher demand.

Indoor farming has the potential to alleviate some of the problems on the food supply chain caused by climate change and growing population. Indoor farming provides a controlled environment, which can produce more crops per a given space than traditional farming. This will help alleviate the supply shortages in the food supply chain and expand the regions of the world where we can grow food. Indoor farming can also be set up near cities, in varying size facilities. This will allow produce to be grown closer to its end customer, reducing transportion cost and well as food waste. A reduction of food waste can lead to more supply availability for supply starved areas of the world as well as lower prices/overall spend for end customers as produce will reach customers much sooner leading to longer shelf life once purchased.

[1] https://www.livescience.com/37363-how-predict-weather.html

On November 30, 2017, POMA commented on Ohio’s Big Bet on the Future of Transportation :

Being a Michigan Wolverine, I am not a fan of the Buckeyes, but I do have to commend Ohio on its efforts regarding autonomous vehicles. Not only has it taken the lead in advancing this technology, and perhaps somewhat transforming its image into a more tech savvy state, but it has found a way to do so at a minimal cost, through partnerships and grants, and to position itself as the leader in this disruptive technology which in only a matter of time will become the norm. Ohio has made a play to become the hub of autonomous vehicle innovation, potentially leading to future job creation and investment into the state.

Ohio should not jump the gun on creating policies and regulation. This initiative has been set up as an experiment and the policies should be data driven. Similar to what many of us did for the Shad exercise, Ohio may need to reiterate its policies and regulations until it finds something that works and is scalable across states and countries.

Although I agree that truck driver are not at risk of loosing their job in the next year or two, autonomous vehicle technology is advancing and will likely be a real threat to job security within 5 years. However, what I question is how well this technology can work in cities and areas not covered by major highways. Will humans still be required to drive large trucks in and out of cities? If so, perhaps a group existing truck drivers can be reassigned to such roles. Without this sort of need, I do not expect truck drivers to have much of a role in our future economy.

On November 30, 2017, POMA commented on Apple combats with Protectionism in India :

Being a proponent of globalization and free trade, this essay made me see that some isolationism might benefit emerging economies. From the perspective of the Indian government, its policies aid the country’s growth in skilled labor and technological improvements. Even though India might not have a competitive advantage in these areas now, if companies are forced to produce products domestically, in time, its technological know how and skilled labor resources will improve.

Given the large size of the Indian market, the added costs of inputs and investing in technological and human development do not seem to be greater than the economical benefit of producing in India due to a reduction of taxes, cost savings from distribution control and increased demand. Given the small size of Apple’s market share, the benefits of becoming a market leader in India are enormous. Over time, as skill level rises, Apple will likely be able to reduce its production costs.

On November 30, 2017, POMA commented on Nissan: Supply Chain Uncertainty in the Age of Brexit :

Based on the reaction of the EU nations to Brexit, it seems unlikely that an agreement with no tariffs on automotive vehicles will be reached. Even if a free trade agreement is passed on the completed vehicle, it is unlikely that all the components which Nissan currently imports into the U.K. will also be under the same trade agreement terms. This would lead Nissan to experience higher input costs which it will either need to absorb or pass on to the customer, likely negatively affecting demand.

It is even more unlikely that the U.K. will be able to negotiate an agreement which allows for free trade and amends the majority origination component role. In this case, Nissan will need to find alternative component manufacturers in the U.K.

Given the two alternatives, it appears that Nissan might be forced, or might be incentivized economically, due to tariffs, to source its components from inside the U.K. Understanding this, and given the long lead time to source new component manufacturers or relocate them inside the U.K., Nissan needs to begin its component rationalization immediately to ensure a smooth transition no matter what agreement is reached between the U.K. and the EU.

On November 30, 2017, POMA commented on Retail’s role in eliminating Global Food Waste :

Tesco is leading the charge in reducing food waste. As the climate changes and food prices rice, customers will flock to lower cost retailers. If Tesco is successful in reducing food waste, and in turn its costs, it can gain a competitive advantage which can make it a market leader. Tesco should view its efforts to reduce waste as an investment into its future.

The biggest challenge facing Tesco and the UN is changing consumers’ preferences. However, there are ways Tesco can incentivize its customers to change their purchasing behavior without changing their views. Most food shoppers purchase the same list of groceries on a regular basis. If Tesco could access this customer data, along with expected purchase dates, it could manage its inventory more efficiently. One such way Tesco could do this is through a mobile app or online platform. Customers could input the items they purchase on a regular basis and choose a day for pick up on a weekly/bi-weekly basis. This method is letting the customer predict his/hers own demand. This would allow Tesco to stock less inventory as it would have better visibility over into product demand. This system could be implemented through multiple methods. One such method would be for customers to pay for groceries online and then have them be ready for pick-up at the store. With this kind of system customers would be able to add additional items to their list up to the day of the pick-up, however, these additional items would not be offered at a discount. Alternatively, Tesco could implement this by having customers come into store, do their own shopping, and at check out provide a bar code which would allow them to receive the items they programmed into the system at a lower price. In this system, customers would purchase their groceries at check-out. This approach disrupts the current grocery shopping experience less, but poses some risks around customers who use the online/mobile system but do not complete the purchase in person.