Amazon’s physical store and its link to web data

A news report on NPR (http://www.npr.org/2017/08/15/540076527/be-more-than-a-bookstore-a-brick-and-mortar-shop-s-key-to-success)describes an Amazon store in New York City that sells books but uses data captured on the webstore to suggest related books, offer Amazon prime discounts etc. The physical store thus serves as an extension to the web store and uses web data to enhance the in store experience, while offering immediate delivery. Should brick and mortar stores leverage the data collected on their web sites to enhance the competitiveness of their stores ? How should other independent bookstores who do not have a large web presence compete – should it by hosting events, such as book readings etc, like the Greenlight Bookstore described in the report ? What information can Amazon collect from the physical store that might help the webstore ?

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

“Drone hives” plan by Amazon for local deliveries ?

An article in USA Today (June 23, 2017) describes a patent awarded to Amazon that describes multi-story warehouses described as drone towers located close to cities. The patent describes these warehouses as locations where packages might be stored prior to customer delivery. Will such drone driven deliveries enable Amazon to reduce their reliance on package carriers and increase delivery flexibility ?  Can one imagine drones doing both deliveries and pick up of returns ? Would you expect drone to be more cost competitive in rural or urban areas ?

Posted in Capacity, consumer, Cost, delivery, logistics, Supply Chain Issues | Tagged , , | 1 Comment

Mass faintings at Cambodia factories producing shoes for Asics, Nike and Puma

An article in The Guardian (June 24, 2017) titled ‘Cambodian female workers in Nike, Puma and Asics factories suffer mass faintings” lists the 10 hours per day, 6 days per week schedule faced by workers with short term contracts that do not permit overtime refusal. The excessive heat (over 37 degrees centigrade), small fans just to remove dust etc, were all considered causes. But a medical sociologist, Robert Bartholomew, considers these faintings as partly psychological and a form of  ‘subconscious political resistance”.   Such disruptions cause lost productivity and plant closure, thus disrupting supply. Should the branded shoe manufacturers ensure adequate nutrition, ventilation, appropriate contracts etc for their subcontract workers, or is that the supplier’s responsibility ? Should the Cambodian government create local laws to ensure the welfare of its citizens while remaining competitive ? Should such incidents be publicized to ensure that factory owners suffer a cost from poor labor practices, and, if so, who should store and provide this information to potential buyers /

Posted in Capacity, consumer, Cost, Global Contexts, Liability, Operations Management, productivity | Tagged , , , | Leave a comment

Nintendo and Apple battle for components provided by supplier

An article in the Wall Street Journal (May 30, 2017) titled “Nintendo battles Apple for parts as Switch demand rises”, describes supplier parts NAND flash memory chips, liquid crystal displays and tiny motors used by both companies in their products.  Flash memory demand increase have been caused by growth in web services, demand for the iPhone 7, projected demand for the new iPhone and thus put pressure on availability of components to serve Nintendo’s products.  Will component price increased force rationing of parts and thus resolve the problem ? Will design changes by OEMs provide relief ? Or this is the result of competitive behavior by the OEMs to edge out the competition for downstream products ? Do you expect upstream manufacturers to add capacity to resolve this issue or stay content with higher prices for the limited capacity ?

Posted in Capacity, competitiveness, Cost, flash memory, manufacturer, Supply Chain Issues, technology | Tagged , , , | 1 Comment

Shoe Manufacturing moving from China to Ethiopia as costs increase

An article in the New York Times (June 1, 2017) titled “Chinese maker of Ivanka’s Shoes Looks for Cheaper labor”, describes the Chinese shoe manufacturer, Huajian International, moving some of their production from China to Ethiopia in response to decreased labor availability for factory work and increased wages in China. The 5,000 workers in Ethiopia are described as a trend that will expand as China sheds repetitive manufacturing jobs to other low wage countries. But will the high logistics costs to ship from Africa result in higher overall manufacturing costs ? Will increased automation and associated customization of shoes move their manufacturing back to the USA ? Or will ecommerce companies like Amazon enable direct shipping against customer orders from Africa to the USA?

Posted in Africa, Capacity, China, consumer, Cost, delivery, Global Contexts, logistics, Made in USA, shoes, supplier, Supply Chain Issues, technology, Uncategorized | Tagged , , , , , | Leave a comment

Are “slow growth chickens” the future ?

An article in the New York Times (May 1, 2017) titled “A Chicken that Grows Slower and tastes better” describes a plan by Perdue Farms to develop chickens that take 25% more time to mature, get more time to run around, have a potentially healthier life and thus taste better and cost 30% more to feed.  But these birds also have less wing muscles, with meat distributed over the rest of their body. With many chains such as Bon Appetit, Chipotle, Subway, Starbucks announcing plans for slow growth chicken purchases, a questions is how the supply will adjust.  Will the shift to slow growth chicken require “more land, water and feed” as claimed by a recent Eli Lilly report ? Will the reduced weight of chickens mean that the world’s food supply of chicken will be short of impending demand ? Will the Global Animal Partnership’s plan to only award its animal welfare certification to slow growth chicken provide the demand side requirement to impact supply ?

Posted in Capacity, chicken, consumer, Cost, disruption, Operations Management, productivity, Sustainability | Tagged , , , , | Leave a comment

Reducing Emergency Room queue time using telemedicine

An article in the Wall Street Journal (March 27, 2017) titled “Can Tech Speed up Emergency Room Care?” describes the increased use of remote care by emergency room doctors at New-York Presbyterian/Weill Cornell Medicine.  The Express care program offers emergency room patients the option to be connected to a doctor via teleconference, overseen on site by a nurse or physician’s assistant. The impact is to decreased wait time from 2 to 2.5 hours down to 35 to 40 minutes.  The article claims that around 30% of the emergency room visits involve suture removals, wound checks, rashes, eye pain etc, which are good candidates for telemedicine. In addition, doctors can remotely provide services to many hospitals, thus improving efficiency. If telemedicine can provide efficient, high quality service, should it be made a choice for the customer or chosen for the customer by the hospital ? Since telemedicine decreases costs, should patients be charged lower fees for such service or will the reduced queue time compensate ?

Posted in Capacity, consumer, Cost, productivity, queue, technology, Uncategorized | Tagged , , , | Leave a comment