How to manage inditex´s unique supply chain design under climate change?
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A truly interesting topic. I do agree that an isolationist policy is very likely to negatively impact international students staying in the U.S. upon graduation. I think it is also worth to consider that, given the high economic growth and opportunities in developing countries, many international students are already considering to move back to their home country after graduation, regardless of the immigration policy in the U.S. It is very true though, under an isolationist policy, the portion of students that decide actively not to stay will very likely increase.
However, I will argue that this might not be a bad thing for HBS in the long run. More students leave the U.S. (due to a stricter immigration policy) to pursue careers internationally will also mean that the HBS network become much more wide spread (as opposed to concentrated in the U.S.) in the long run. As more and more global 500 companies are outside of the U.S., it might be a good thing that international students go back to their home countries (which might be an unexpected side effect of an isolationist policy) and lead the growing organisations in their home country – in which HBS will also benefit in the long run as a global institute.
As an international studying in the U.S., the challenge proposed here is a living and concerning reality. Being a tech and “asset-light” company, the sustainable, high-quality supply of talents is arguably the most important part of its supply chain. If Facebook wants to maintain its long term competitiveness, there is no other way than recruiting and maintaining its talents. Unlike other tech company, I would argue that the impact of isolationist is even higher for Facebook as the its company mission is to connect the world. An isolationist approach will be opposite to its company value and its customer promise. If this remained unsolved, there is a medium risk that not only the foreign employees and employee satisfaction at Facebook will be impacted, so will its customers who echoes with the value of the company. Therefore, I would recommend Facebook to seriously evaluate building or enlarging a European headquarter. One of such options could be Germany, where Berlin is an emerging tech hub, with high-skill workforce, and last but not least a national policy that welcomes highly educated immigrants.
Thank you for your essay on such an important topic. I found it shocking to know that 78% of providers are manually counting inventory somewhere in their supply chain. I think Mayo Clinic is a frontier is moderinizing its supply chain. Firstly, information collection and transparency are key in optimising supply chain. Though a relative standard technology for many other industries´ supply chain, the adoptation of it serves as the foundation for a systematic way of managing in replacement of manual counting. I think the implementation of Reveal particularly encouraging. As supply chain is a function of system, lead time and behavior. The fact that Mayo clinic is sharing such inventory data to its suppliers are overcoming a traditional mindset and legacy behaviour. A truly efficient supply chain is one that do not only look at isolated benefit of each player but rather optimising the whole chain (e.g. Toyota). Therefore, personally I would encourage Mayo clinic to potentially form a JV with a technology company that looks at how the whole supply chain can be optimized, once the low hanging fruit of supply chain optimisation of its own organisation is achieved. Questions like “who is the best one in the chain to best forecast demand? What more can technology do to reduce lead time of the overall chain?” As Zara has formed a partnership with Toyota to implement Just-in-time management for fast fashion, can U.S. healthcare system form similar Partnership? Will U.S healthcare supply chain be one of JIT, led by Mayo Clinic? This will be my recommendation for its longer term focus.
Very interesting article – this probes a new angel looking at climate change. Meanwhile, I wonder if this is an intellectual challenge posed by the Greenland government or something realistic in the mid term. From a supply chain perspective, here is how I will evaluate the feasibility of the Greenland´s proposal. Raw materials extraction – currently there is little to no infrastructure for natural resources extraction in Greenland, will companies invest in such large-scale infrastructure projects in an politically and economically under-developed territory? Second, from a logistic perspective – I wonder how easy it would be to ship raw materials from Greenland. Thirdly, from a demand forecast perspective, I wonder if oil & gas will still be the main energy source by 2030 as more and more countries are investing into alternative energy. I hope we can significantly reduce the use of fossil fuels before we melt more of Greenland. If so, such a low demand forecast will be difficult to trigger a whole-hearted development of a full supply chain.
Great essay – I particularly enjoyed reading about the interlink of its future business model (e-commerce direct distribution model) and its environmental implication. As I was researching about Inditex (Zara´s mother company) and its actions against climate change, my answer to your open challenge would be – in the global apparel industry, is sustainability even a competitive advantage or is it rather a norm? For example, the “close-loop”, factories & transportation standard, as well as the setting up sustainable index are now almost the standard “action plan” of each of the global apparel companies, such as Nike´s competitor Adidas and other fashion brand Zara and H&M. It is my view that such standard action plan and CSR will not be the differentiator anymore, nor shall Nike be the “industrial advocate” as there is sufficient good practice and adoption in the industry. Rather, I would encourage Nike to focus on practices that actually deliver double bottom-line innovation like you mention. To meet the fast changing fashion demand, Nike´s supply chain is under sufficient stretch – how can we have more practices that is not adding additional supply chain design parameters, but rather be a solution to some of the design challenge is what I would recommend to focus.
In addition, I think the essay focuses on mitigation part of the climate change, I would also encourage to discover how Nike is adapting impact of climate change to its supply chain. For example, with the increasing food and droughts, and hurricanes, what is Nike doing or what standard is Nike imposing on its partners for natural disaster recovery? Policies like these could help guarantee short lead time even under extreme conditions and minimize bullwhip effect.
With a record sales of more than 20 billion within a day, Singles day does pose a significant stretch for Alibaba´s supply chain. I agree with your point that “Alibaba´s has become a competitive disadvantage in recent years”. While I appreciate the “asset light” model and a focus its core business (e-commerce), I wonder if the acquisition of one company “CaiNiao” is sufficient to help it manage the complex supply chain of Alibaba. Firstly, how willing are the logistics supply to integrate to the “central” system? Particular in an era where data equals money. Secondly, given the wide and fragmented delivery network, how much integration needs to be done with the suppliers? Knowing that IT integration is expensive and often goes wrong, I would challenge the capital needed for such integration. Finally, on-time and quality delivery is an key success factor for e-commerce business, the lack of ownership and control might directly impact the customer experience.
To your open question “Are data-driven cloud platform and asset-light a winning strategy for Alibaba continue to maintain its market leadership?”, my personal view will be that this is insufficient. I will recommend Alibaba to strategically look at investment opportunities with delivery companies, or to consider develop 1-2 self-owned warehouse to cater for peak events like Singles day.