Great article, Jeff! In this case, we see that the increasing political support for isolationism, with the intention to keep job opportunities within the U.S., poses challenges for Ford’s international supply chain. From your research, isolationism seems to fail give the job opportunities back to the people in the states, but instead forces Ford to look for other opportunities to reduce its cost.
With current technology that allows easy communication and trading across countries, I believe politics cannot stop the megatrend of globalization. Globalization is not only a revolution in supply chain, but also reflects current customer demand. The demand for Ford in international market continues to grow. Globalizing and choosing manufacturing factories to be closer to consumers as well as supply chain serves as a competitive advantage for Ford. I think Ford should continue its strategy to shift production to China in order to capture the increasing demand in Asia market. On the other hand, domestically Ford should increase its operational efficiency, for example, increasing output rate or upgrading its design to be more economic on raw material, to compensate for higher labor cost and ensure sustainability for local production.
Great post, aninnymouse! As a sneaker fan, I really enjoyed reading about Nike’s manufacturing process of running shoes and how it is not incorporating automation and digital technology to improve its operational efficiency. I find it particularly amazing that the use of robots can reduce assembly time by over 90% – wow, I can’t stop thinking about Dennis’s comment in class the other day – robots are taking over the world!
I think Nike makes a smart move of investing in the robots and automation equipment supplier. The footwear industry has become increasingly competitive as customers now see running shoes not just as sportswear but also as fashion products. Nike’s top competitor, Addidas’s sales soars over 31% in the second quarter of 2017 by listening to customers and quickly delivering the design they like. The go-to-market time is the key to beat competition. Once Nike obtain improved operational efficiency, it will be able to transform customer experience to be more interactive and personalized. On the other hand, not only should Nike keep investing in reducing is production time, but it should also implement data analytics to better capture consumer preferences.
Thanks for sharing, Carolina! Climate change has a direct impact on agriculture around the world and it’s interesting to see how a Portuguese olive oil producer mitigates climate risk by incorporating technology and improving operational efficiency. I love the drip irrigation system. The technology improvement serves as a direct solution to fighting against drought. The rest of the strategies seem to focus on increasing margin from improved operations in order to cover the high cost of water required in the future and ensure sustainability in the long term. However, these strategies are not solving the root cause of climate change and I would argue the impact of these will be limited from a sustainability perspective.
Although I like your suggestion of cleansing and re-using production waste water to water the trees, I would be skeptical about the practicality of this strategy. One risk the company is trying to manage is the rising cost of water. Although production waste water seems like a cheap alternative, but the technology of cleansing the water and recycling it to meet agricultural standard is not only challenging but can cause potential safety concerns. It also incurs huge capital investment and R&D expense. Innovation in sourcing water is sustainable for the company and for the environment as a whole, but it can be very expensive. I would recommend HMG to partner with government and other agriculture companies to form alliance in finding clean and cheap water supply.
Cocoawhat?, thanks for the post! I was surprised when you mentioned that part of West Africa would become inadequate to produce cocoa by 2030 – climate change is having such immediate and serious impact on our day-to-day life! I am glad to see Hershey taking initiatives on the sustainability effort. I really like their strategy to work with local farmers to provide training and higher-yielding trees to ensure supply in the near future. Forming CocoaAction with other leading chocolate manufacturers is another smart move to increase industry awareness and reinforce collective effort across supply chain.
This may be completely out of the box – I am thinking if it is possible for Hershey to also explore ingredients other than cocoa that can be made into chocolate or chocolate alternatives to manage the risk of supply chain disruptions. After some brief research, I believe Carob can be a potential candidate to replace cocoa. According to Healthline, Carob can be used as an alternative to cocoa and in fact, is superior in nutrition and health benefits. The carob is a long-lived plant native to Mediterranean and is more resistant to dry weather. While Hershey is focusing on its effort to sustain cocoa production, I think they should also have a contingency plan to diversify the ingredients of its products and rely less on cocoa production. I would recommend Hershey to invest in the research and development of new products, for example, a healthy chocolate made from Carob, which not only reduce the risk of diminishing cocoa supply but also appeal to the trend of healthy eating.
Kaizen, thanks for sharing your research and thoughts on the supply chain issues of my favorite yogurt brand! I really enjoyed learning about the IT infrastructure Chobani put in place in respond to the trend of digitalization. In Food and Beverage industry, food safety and quality is consumers’ primary concerns. I can’t agree more that digitalizing and enforcing transparency along the supply chain serves not only as a operational leverage but also establishes brand reputation that can have a long-term impact.
As Chobani continues its growth, procurement and supplier sourcing will be much more complicated given its larger scale. I love the idea of E-procuring and integrating upstream suppliers and downstream distributers into their supply chain system. Taking a step further, I wonder if it would be a good idea to incorporate just-in-time distribution strategy, as we read in the pasta manufacturer Barilla case. As a dairy product with relatively short shelf-life, managing the time from production to consumers can be particularly important and challenging given Chobani’s customer promise of fresh and good quality yogurt. For example, If distributors choose to hold safety stocks more than necessary, or if there’s some logistics problems that will delay delivery, it can potentially lengthen the time to consumers and put Chobani’s customer promise at risk. With digitalized supply chain management, information visibility and data-sharing will enable JIT distribution to be more accurate and manageable.