Amazon’s cashierless grocery store plans

An article in Business Insider (December 6,2016) titled “Amazon’s new grocery store highlights a huge hole in Donald Trump’s promise on jobs” describes plans by Amazon to open thousands of stores where customers can check into the store with their phones, shop and leave, with their Amazon account getting billed. The new cashierless stores have the potential to eliminate close to 857,000 jobs in grocery stores, and if replicated across other retailers, eliminate 3.5 million cashier jobs in the US.  Will the automation of cashiers and the benefit to customers generate new industries to absorb these cashiers ?  Will other customer services, such as cooking or chopping, which might add value to grocery items, become the new norm for grocery stores to add value ?

Posted in competitiveness, consumer, Cost, disruption, logistics, Operations Management, retailers, Service Operations, technology | Tagged , , | Leave a comment

Amazon uses trucks to move data to the cloud faster

An article in the Wall Street Journal (November 30, 2016) titled “Amazon Uses Trucks to Drive Data Faster” describes use of a 45 foot shipping container with 100 petabytes of data to move data from a company to the cloud service offered by Amazon. These trucks, called Snowmobiles, are expected to travel to a customer facility, extract the data, then travel to an Amazon facility and be uploaded to the cloud – a process that is faster than sending the data over the web, with the trucks costing 0.5 cents per gigabyte per month of use.  Will big data provide significant traffic to traditional logistics carriers like trucks in the future ? What might be the consequences of physical constraints like accidents on the leakage of data being carried ?

Posted in Capacity, logistics, truck | Tagged , , | Leave a comment

The Lock 52 bottleneck and potential impact

An article in the New York Times (November 23, 2016) titled “Choke Point of a Nation:The High Cost of an Aging River Lock” describes the 80 million tons of grain, coal, fuel and other products worth $22 billion in trade that flows on the Ohio river and depends on locks 52 and 53.  It takes 15 hours to pass through lock 52 and 48 hours to pass through lock 53 and thus 5 days to travel 100 miles along the river. Any failure of these locks would freeze water traffic and result in increased costs to move products, and thus higher consumer prices. A replacement dam’s completion has been delayed for over 20 years and is over budget by over $2 billion. How should the cost of such infrastructure, whose benefits are spread across the supply chain, be absorbed by the country? Should private infrastructure companies, who are permitted to recoup their costs through tools, be the solution ? Should the trade groups of users of the infrastructure be asked to develop solutions ?

Posted in Capacity, consumer, Cost, delivery, disruption, logistics | Tagged , | Leave a comment

The Danish “hygge” fashion trend in Britain

An article in the Guardian (November 22, 2016) titled “The hygge conspiracy” describes the marketing of the Danish concept of “hygge”, which implies cosiness, as a fashion trend. Cashmere cardigans, sewing patterns, wallpaper etc are all linked to this concept and marketed as a fashion trend, with an avalanche of books on the subject to suggest associated linkages to cosiness. Can fashion trends be created, by offering an ecosystem of products, from books to products, and thus improving sales forecasts?  Since the actual concept of hygge in Denmark differs from its use in British, will the gap cause a backlash and thus a demand drop ?   Will authenticity of the concept require that the associated products succeed in Denmark before being offered in Britain?

Posted in consumer, Global Contexts, labeling, product, Service Operations | Tagged , , , | Leave a comment

Including weather forecasts to improve fashion product profitability

An article in the Wall Street Journal (November 27,2016) titled “The Next Fashion Trend:Weather Forecasting” describes the impact of weather on fashion sales and thus the need for the fashion industry to learn about weather forecasting. It claims that the average temperature last winter was 4.6 degrees above average and thus decreased demand for heavy coats and impacted J.C.Penney’s apparel sales. In response, designer Michael Kors includes a range of fabric weights to cover the possible clothing types that may be demanded in response to weather. Others choose layered options that can adjust to the weather. Which of these options i.e., offer a broader range of weights or offer a layered solution is likely to be the best for the retailer ? Should domestic, quick response yet higher cost sourcing be included as a way to compete ? How might forecasting be linked to product uptake over smaller intervals to ensure profitability ?

Posted in Capacity, consumer, Cost, logistics, Made in USA, Supply Chain Issues, technology | Tagged , , , | Leave a comment

Voting lines in New York City, machine failures, repair personnel and backup

An article in the New York Times (November 8, 2016) describes the long lines to vote in New York City. The article describes 50 repair personnel allocated to repair machines in 1200 stations, but also stuck in traffic as they go between stations.  Some voting locations with long lines offered emergency ballots that will be counted later. Some voters gave up after lines persisted, hoping to vote after work.   Given the sporadic use of voting equipment, what can be done to ensure their smooth functioning on election day ? Should backup capacity of machines be planned, anticipating past machine malfunctions ?  Should states that only permit voting on election day start moving to increase the window over which voting can occur by permitting early voting ?   How can election execution cost be balanced with a need to provide access to voting to all citizens ?

Posted in Capacity, Operations Management, technology | Tagged , | 2 Comments’s 43% increase in shipping costs

An article in the Wall Street Journal (October 28 2016) titled “Amazon’s Shipping Costs Likely to Surge With Holiday Orders” describes a 43% increase in shipping costs in the third quarter of this year as reported by The article suggests worries that the flat $99 annual charge for Prime members with free shipping rapidly (even within an hour) and the rising costs faced by the company is cause for concern.  In response the company has increased the number of warehouses, invested in ownership of delivery assets (including 40 airplanes) and increased use of the US Postal service while anticipating that it will ship 700  million packages between Thanksgiving and New Years Eve. Will the revenue growth and margin compensate for the increased shipping costs ? Can Amazon drive down costs by owning delivery assets or are they a tool to negotiate lower shipping costs with UPS and FedEx ? Or will Amazon be forced to increase its fees for Prime services to cover costs ? Will retailers with physical stores have an opportunity to partner with Amazon to create a win-win solution ?

Posted in Collaboration, competitiveness, consumer, Cost, Ecommerce, logistics, ordering, truck | Tagged | Leave a comment