TM's Profile

SAM, excellent question about how Rassini should face strategic decisions in the face of uncertainty. I think their approach so far has been very wise in that they have made decisions and investments that prepare them for a post tariff reality but also help improve their competitiveness in the short term. In addition to their expansion to other markets, efficiency gains, and shift of some production to the U.S. I think they need to develop an action plan and continue to monitor the situation on how they will respond to any new trade deals. It is likely Rassini has some time to prepare and perfect their action plan as many experts are estimating at least a year to enact a new trade deal. Additionally, there is significant risk that it will take much longer if the deal is not completed before Mexico holds presidential elections within the next year. (http://money.cnn.com/2017/08/16/news/economy/trump-nafta-steps/index.html)

I think Nissan and other UK automakers really have three options to address this Brexit problem.

(1) Accept the tariff on cars exported from the UK to Europe which is expected to be at least £1,500 (https://www.politico.eu/article/interview-uk-car-industry-will-stall-if-theresa-may-walks-away-from-deal/)

(2) Move the plant to mainland Europe as Colton suggests which would have a very high capital cost associated with it. Although this solves the tariff problem for cars to mainland Europe, it will have an offsetting cost as cars being made for the UK would then be struck with the tariff unless Nisan would decide to operate both facilities.

(3) Adapt their supply chain to meet expected or worst case trade rules. This is the option I would take as long as Nissan believes they can make these changes under £1,500 per vehicle. In order to be efficient in this process Nissan will need to search to find what production capabilities already exist within the UK and which components are priced most similarly to products made outside the UK. I would focus on parts that are a large quantity per vehicle as this should reduce the number of suppliers they need to add to their supply chain in order to meet their local content requirements.

I had not considered the impact of pollinators such as bees on companies like Häagen-Dazs. The declining bee population is definitely going to be an increasing concern in coming years. To your question about taking a stand against non sustainable agriculture I would say yes they should. To this point modern agriculture has been fairly slow to make changes stemming from issues such as overspray of pesticides. From my experience at a large agriculture equipment manufacturer I know that companies are coming out with products that help to minimize the amount of chemicals required and help place chemicals more precisely where they are needed through a combination of technology and new spray nozzles. However, these solutions can only reduce the risk of chemicals so far. To move the sustainable agriculture movement forward I think Häagen-Dazs has a couple of options. Häagen-Dazs could either lobby law makers to create more stringent regulations around chemical usage or they can adjust their supply chain to only purchasing organic products giving producers an incentive to use more sustainable practices.

It is excellent to hear that a large corporation such as Tesco is taking such an active role in minimizing their carbon footprint and impact on global climate change. Hopefully other companies will follow their lead and also realize some of the potential savings this strategy can bring such as the 200 million pounds in energy savings you highlighted. To your question of do we expect too much of our supermarkets I think the answer is absolutely yes. As consumers many of us expect the supermarket to have all of our favorite fruits and vegetables year round. However, this can be a dangerous expectation as it puts pressure on supermarkets to source food from global suppliers as opposed to local ones which leads to significant increases in greenhouse gas emissions from transportation and storage. A study found that local produce in the UK contributed 95% less greenhouse gas emissions than those sourced from elsewhere. (1) I think to have a truly sustainable marketplace we are going to need to have changes in both customer expectations and how companies meet those expectations.

(1) MariánMichalský, “Greenhouse gas emissions of imported and locally produced fruit and vegetable commodities: A quantitative assessment,” Science Direct, December 12, 2014 http://www.sciencedirect.com/science/article/pii/S1462901114002469

I think this is an interesting project that Uniqlo is undertaking. Their effort to digitize their supply chain from the factory to the consumer will certainly help them to lower their inventory levels and eliminate or reduce the number of items left over at the end of a season. Additionally, it should help them reduce their 6-12 month cycle from design to stores and make them more competitive against other fast fashion retailers such as H&M.

Additionally, I think you have correctly identified that their digitization efforts have not necessarily closed the gap of their distribution. Uniqlo ships products all over the world and depending on their shipment method it may take weeks to months with various levels of tracking accessibility. If Uniqlo wants to further reduce its time from design to consumer, they may need to explore more localized production or different forms of transportation.

To your question of how Uniqlo can detect drastic changes in future consumer preferences I think they are going to need to look outside of their supply chain. Their new digitization data will give them a good idea of what is selling well within their current portfolio and gradual shifts in consumer preferences but does not have the capability of indicating a leap in preferences. For this, I think they need to rely on their design department to be creative and test different products with consumers to find what resonates with them.

It will be interesting to see what Pfizer does in the future as they continue to implement the digitization of their supply chain. It seems Pfizer has every reason to be on the leading edge of this trend as they must bear the cost of spoilage from the large and increasing number of products that have strict temperature control requirements. I thoroughly agree that they must be proactive in tackling the challenges of integrating acquisitions into their own supply chain. From my experience with a manufacturer of large equipment that switched over it’s software for digitally managing inventory it can be an arduous process. They will need to have a highly skilled team prepared to integrate both the culture required for the higher level of monitoring in addition to the hardware and software.

To your question about how smaller pharma companies will react, I imagine in the short term they will use older, cheaper technologies until their supply chain partners fully adopt the IoT technologies. There are a wide variety of other technologies such as passive and active RFID that provide many of the same benefits and can help to efficiently digitize your supply chain in the near term. The main drawback is that it doesn’t provide the real-time feedback that the IoT solution does. Additionally, the passive tags do not give you the capability to track other measures such as temperature or pressure. (1)

1 Meola, Andrew, “How IoT logistics will revolutionize supply chain management,” Business Insider, December 21, 2016,
http://www.businessinsider.com/internet-of-things-logistics-supply-chain-management-2016-10