Will coordination between e-commerce retailers and carriers ensure on-time deliveries this Holiday season?

An article in the Wall Street Journal (October 1, 2014) titled “UPS, FedEx Want Retailers to Get Real on Holiday Shipping” describes pleas by the carriers FedEx and UPS to ecommerce retailers to stagger their promotions, avoid promising free overnight shipping, move sales to earlier in December and provide volume projections.  This is is response to the close to 2 million packages that did not arrive on time last year. But competition among retailers is bound to push deals until the very last minute on December 23, with volumes forecasted to increase by 14% this year.  Will threats to stop pickups once capacity limits are reached by carriers be sufficient to manage this year’s package volume surge ? Can customers be enticed to order early with appropriately chosen discounts rather than wait until the end ? Can “marketing and logistics be expected to work closely” this Christmas to enable it be a profitable holiday in addition to be a high package volume event ?

Posted in Capacity, Collaboration, competitiveness, consumer, Cost, delivery, Ecommerce, retailers | Tagged , , , , , | Leave a comment

The impact of California’s rules for a “Made in USA” label

An article in the Wall Street Journal (October 1, 2014) titled “‘Made in USA” Spurs Lawsuits” describes the California Law that even one rivet in a product with such a label that is not made in the USA constitutes false advertising.  Basketball hoops with just a few bolts and net imported, USA made helium tanks shipped with imported balloons, rubber rings and light bulbs in Maglite flashlights – are all termed a violation in California even when the Federal Trade Commission (FTC) permits the label on all products that are “virtually all” made in the USA.  Is California’s 100% requirement a reasonable requirement to ensure that the intent of the label is satisfied and the benefits accrued only to manufacturers who comply? Will the impact of California’s stringent requirement be a decrease in the number of US manufacturers if they cannot get the market benefit of such labels ? Should states be required to generate consistent requirements for labeling so as to eliminate the ambiguity in Federal labeling laws ?

Posted in California, Capacity, consumer, Cost, Global Contexts, labeling, Liability, Made in USA, product, Supply Chain Issues | Tagged , , , , | 1 Comment

Auto Demand and supply mismatch worries impact platinum prices

An article in the Wall Street Journal (September 29, 2014) titled “Platinum Skids on Car-Demand Worries” describes the recent price drop for platinum and traces the volatility of prices of the metal recently.  A strike in a South African mine created supply worries and drove up prices. But the flat to declining demand for autos in Europe and Japan, a sector that accounts for 38% of world demand for platinum, along with steady exports from Russia have created worries of oversupply, thus driving prices down. Will the low prices for platinum create a demand for the metal as investors switch from gold to platinum ? Will its use in the auto industry increase from countries like China ? Or will mines decrease their output to get the system back in sync ?

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Conscious Supply Chain Management at H&M

A report in Sustainable Brands (http://tinyurl.com/qg5gtn7) titled “H&M Unveils Conscious Denim, Signs Agreement for More Conscious Supply Chain Management” describes initiatives with the International Labor Organization (ILO), Solidaridad and Jeanologia to audit its water use, energy consumption, working conditions, fair wages, “capacity development for social organizations and skill development across the supply chain”. Garments produced will also have a Clevercare label to urge consumers to save water and energy during use. Is H&M’s focus on the entire supply chain, from production to use, a harbinger of the future for apparel supply chains ? Will the company be able to get its customers to pay a premium to cover the costs for these initiatives ? How might H&M be able to maintain a competitive advantage for its garments developed with a conscious supply chain given that the capability is obtained by working with known nonprofit entities whose services are available to all ?

Posted in Collaboration, competitiveness, consumer, Cost, Supply Chain Issues, Sustainability | Tagged , , , , , | 1 Comment

Adjusting distribution centers for omnichannel success at the retailer John Lewis

An article in CSCMP’s Supply Chain Quarterly (Quarter 2, 2014) titled “A Supply Chain Redesign for Omnichannel success” describes changes to the distribution center at the retailer John Lewis to ensure omnichannel success – a 7.2% sales increase in the 2013 season over the 2012 season with a 22.6% increase in online sales. The changes include reducing the number of distribution centers, coordinating the click and collect (at the store) with store shipments to ensure a smooth flow, and merging all items in an order to ensure the customer gets to pick up the entire order in the 41 retail locations. Given that the flows to the store are batched boxes or pallet loads while customer orders are for eaches, will the merging of these flows generate efficiency ? Should customers be encouraged get deliveries directly in their homes instead of store pickup to increase system efficiency ? Or will store sales increase as customers stop by to shop in the store when they come to pick up online orders ?

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The Ebola premium added to cocoa prices ?

An article in the Wall Street Journal (September 19, 2014) titled “Cocoa Prices Surge on Ebola Fears” describes concerns about the cocoa growing regions in West Africa, including Ghana and the Ivory Coast who grow 60% of the world’s supply, as the Ebola virus rages in Liberia, Sierra Leone and Guinea. Cocoa is grown in small farms and picked up by distributors in motorcycles for exports. As transport links decrease due to Ebola fears and the region get isolated, cocoa prices are expected to surge beyond the current 20% price increases. Will increasing cocoa prices cause a shift in product composition of chocolate to alternate formulations that decrease market demand for the long run ? Should local governments, who have most to lose from exports of this crop, figure out a mechanism to ensure stability of the supply chain ? Should the US air bridge that is current set up to provide assistance with treatment of the Ebola virus also be used to ensure stability of the supply chain that provides revenue for local governments or should this be the responsibility of chocolate manufacturers ?

Posted in Capacity, Cost, disruption, Supply Chain Issues | Tagged , , , , , , | 1 Comment

Did better scrubbers increase the demand for dirty coal from Illinois?

An article in Bloombergbusinessweek (September 15,2014) describers the surging demand for high sulphur Illinois coal coinciding with Clean Air rules that demanded scrubbers in power plants that even the emissions across all coal deposits. With lower costs and located closer to coal fired plants, Illinois coal demand has surged as the quality of scrubbers installed as increased. Is the use of poorer quality coal whose gases can be purged good for the environment ? Should inputs to power plants also be regulated or should emissions be checked while providing flexibility to power plants?

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