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T@HBS
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This post is really interesting, and in addition to some of your points, I could not stop thinking about the huge opportunity for efficiency gains grocery stores have, in addition to labor cost savings. Not only should this give grocery stores the ability to react much faster to market circumstances in terms of pricing, which should allow them to capture more value, but it should also allow them to test consumer behavior in a much easier way, considering all the technology you described is implemented. I would just be curious to get their insight on how they expect to attract more customers to the point of sale when the online shopping model for groceries is becoming increasingly more popular.
I really like the fact that, by trying to reinvent its business through digitalization, the Berliner Philharmoniker is making classical music available to a greater number of people. From your post, I had the impression that they already have the infrastructure in place (especially from Sony), so I believe scaling this up (entering new markets) would probably cost less than what it has cost so far, which is a positive. But maybe it is still not enough to bring them to breakeven, which makes me wonder if they should be rethinking their agreements with copyright holders and performers (could incentives be better aligned?), as well as working with other partners in “innovative” events (i.e.: beverage companies & open air events, or art expositions with the “appropriate” soundtrack, etc.). I think innovation can be extremely powerful considering competitors’ choice of business model and value proposition, especially as the Berliner Philharmoniker grows into markets that wouldn’t be traditional consumers of classical music. Let’s wait and see!
This is a great example of a company that is adding value to the entire chain, while reducing food waste, which is remarkable. I believe that further “digitalizing” its operations will be extremely helpful not only for the customer experience, but also to scale the business.
However, I wonder if there is an additional way to make the service available to people who unfortunately do not have access to the internet or to a smartphone, especially as BuffetGo enters other countries (at this point it seems that the technology is segregating the ones who would benefit the most from it – maybe the 13% of Americans that still experience food insecurity?). Could they partner with governments, so that people in real need can also benefit from this initiative? What other solutions could they explore?
In any case, kudos for the company. They’ve already achieved something that is already extraordinary. Let’s wait and see what comes next!
Thank you for this post! I was impressed by the magnitude of the change and how transformational digitalization will be for the population. It seems that the GoI has mobilized to use digitalization as a way of being more transparent and improving individuals’ lives, but I share ecanabarro’s concern about data security, as all these tools involve dealing with high-sensitive information.
I also saw a lot of value on the initiative of the Ministry of Commerce. Having worked for an exporter in the past, I was impressed by the “live” data on exports. This information can be a good indicator for companies to monitor and act upon, especially if they are granular as they seem to be.
I very much enjoy your post because it addresses logistics issues that not only companies in the delivery “system” have to deal with, but also every other company that produces some sort of good that needs to reach stores or consumers. Thanks for bringing that up!
I also agree that, despite not having the same availability of funding as other companies, USPS is positioned to start taking action regarding its own sustainability standards. As the owner of one of the largest civilian vehicle fleet in the world (https://about.usps.com/who-we-are/postal-facts/top-12-things-to-know.htm), it is highly responsible for its lower of standards and the impact it can have on global climate change! The company should definitely explore ways of incorporating more fuel efficiency practices, lower emissions in its operations and potentially go even beyond: why not having their partners together in this journey (sharing technologies, best practices or even finding ways of further optimizing logistics)?
I vastly agree with your comment, but would also like to see Unilever focusing on the downstream part of the process in a more pronounced way. For instance, are they willing to start the dialogue with consumers in a more vocal way, discussing impacts of food waste, not recycling packages, among other subjects, in an attempt to educate consumers (despite the risk of being perceived as “more expensive” for being sustainable)?
Also, are they able to further optimize their logistics platform (efficient truck loading, fewer trips from distribution center to retailers, direct distribution from factory to large players with sizeable orders)? Have they considered the use of electrical trucks when distributing their products (either own fleet or third-party providers)?
I would love to hear that the response is YES for all these questions!
I vastly agree with your comment, and would also be concerned if coffee supply continued to decrease, not only because of the impact on prices and availability for the company, but also because of the impacts on several families who depend on this business (planting/harvesting) to survive.
I just wonder whether Starbucks is going beyond the issues you mentioned to analyzing alternative ways of growing coffee: for instance, is there any chance coffee could be produced in large scale on a controlled environment, without raising costs significantly? Could the grain itself influence the amount of human actions needed that naturally increase emissions? Maybe genetically modified coffee could be an option to tackle this?
On a different front, Starbucks could also put efforts on dealing with other aspects of the supply chain, such as logistics. Most of the coffee needed where demand is located is imported from other regions – is transportation a priority (emissions can also be huge)? Is Starbucks also working with those players to reduce emissions across the entire chain?
In any case, Starbucks is well ahead in the game compared with other companies. Let’s just hope that it continues to lead the way and tackle such an important issue on its entirety.
I was not aware that Cemex was so committed to sustainability – and for so long – so your post is really clarifying to me. I was impressed not only by their ability to innovate on product development, but also on their relationships with suppliers. I applaud the fact that they have been recognizing suppliers that actively try to manage climate change, but I would like Cemex to go one step further: is the company prepared to enforce certain standards on its suppliers (i.e. emissions, energy efficiency, etc), just buying from those who comply (even if it implies a premium) and excluding those who don’t from its supply chain? In my view, actively working together with stakeholders can make a huge difference, and in this case it can have a much more widespread impact, given Cemex’ size and its importance in global markets.
I agree with your post in the sense that JBS needs to deepen its practices towards climate change. However, I tend to disagree on the logistics comment, as switching for an entirely third-party operation – assuming JBS would not just be “renting” the fleet, and yes letting the third party run the operations – could create more variability and increase the bullwhip effect, in my view.
It is my opinion that companies in this sector have to deal with several logistics challenges. Those range from the number of trips they need to make if they are distributing to small moms-and-pops or to large retailers, to the fact that trucks usually have to be technologically advanced to carry perishable products that require different levels of temperature to remain conserved.
I believe that passing that responsibility to third-parties, considering the complexity of the logistics chain in Brazil, as well as the lack of enough reliable players to hire, would be risky.
However, in order to optimize emissions the company could work on some of your solutions by optimizing its own logistics operation. That could be done not only by investing in systems that mathematically assign better ways to allocate products within trucks, according to mix, order, clients and even weight, among other factors, but also by optimizing sales and delivery routes, orienting drivers to utilize the most efficient ones (and making sure they adhere to the routes established by the company). On the later, the company could also work with clients to understand how often do they really need products, and if it would be more cost efficient for both parties to reduce the number of trips required to keep the customer satisfied. Another important consideration would be to have direct distribution from the plant to the customer’s distribution center (without stopping first at JBS’ own distribution center) if such customer’s order is large enough (i.e.: large retailers). All these actions would not only help reducing emissions, but would also tackle demand forecast, inventory management, variability, among other issues.