VW variety and associated costs

An article in the Financial Times (November 20, 2015) titled “Volkswagen (VW) choked by cost and complexity”, claims the company has 117 different steering wheels for the Volkswagen Golf. Plans are afoot to decrease that to 43, with efficiency programs expected to decrease costs by 5 billion euros a year by 2017.  Similarly the company offers 541 versions of front seats -a number to be reduced to 259. Will reducing design flexibility for its engineers maintain sales for VW while decreasing costs? Will such efficiencies and consequent price reductions help restore faith in the brand? Will VW be able to compete with Toyota if it reduces product variations?

Posted in manufacturer, Supply Chain Issues, Uncategorized, Variety, vehicles | Tagged , , , , | Leave a comment

Ecommerce and time to market

An article in the Financial Times,  (November 20 2015) titled “Ecommerce offers a cheaper and faster way to market”, describes the growth of BAT i.e., Baidu, Alibaba and Tencent, in China. With Alibaba selling $14.3 billion worth of goods on November 11, Singles day, these ecommerce companies claim to offer a scalable retail channel.  Will the intense retail competition reduce prices to generate negligible margins? Will these channels invigorate counterfeit products that can coexist with branded manufacturers? Should manufacturers go direct to customers through these channels to control distribution?

Posted in consumer, Cost, delivery, Ecommerce, Global Contexts, Service Operations, ship, Supply Chain Issues, Uncategorized | Tagged , , , , | Leave a comment

Amazon’s logistics foray and UPS relationship

An article in the Wall Street Journal (December 23,2015) titled “Amazon Seeks to Ease Ties with UPS” describes the close relationship between the two companies evolving into one where Amazon is attempting to control it’s logistics costs, which increased from 10.4% to 11.7% in the past year. Amazon is described as hiring UPS managers, reserving aircraft for delivering, working with USPS and focusing on increasing service while decreasing costs. Will Amazon be successful in launching it’s own logistics alternative and decreasing costs? What can UPS do to retain the business? Should UPS invest in drones and other technologies so Amazon can decrease it’s role ?

Posted in Cost, Ecommerce, logistics, Supply Chain Issues, Uncategorized | Tagged , , , | Leave a comment

Will information sharing regarding subsea oilwell bolt failures improve performance?

An article in the Wall Street Journal  (July 9, 2016) titled “New Worries over Subsea Oil Wells” describes bolt failure costs for connector units in subsea wells. The bolts were supplied by GE, Schlumberger and National Oilwell, all competitors in the industry. A new regulation will force reporting of bolt failures and sharing of this data among competitors. But new contract offered by GE to its customers let them pay only for up-time of its equipment. Will information sharing among competitors help identify design or assembly flaws? Will the new risk sharing contracts force better designs?

Posted in disruption, product, Service Operations, Uncategorized | Tagged , , , , | Leave a comment

Calculating penalties for component design IP infringement

An article in the Wall Street Journal  (August, 4 2016) titled “Apple wins famed designer support in battle vs Samsung” describes the challenge of determining penalties for Samsung ‘ s violation of  Apple’s patents for display of apps and the smartphone front face. Samsung argues that “violating a cup holder patent should not entitle one to profits for the car”. But other designers argue that the components of the design should not be separated from the final product. Will upholding Apple’s contention that it is entitled to all smartphone profits diminish product innovation by increasing IP risk? How should courts assess the contribution of a component to the market size of an end product? Should the ease of component redesign be considered when determining penalties?

Posted in intellectual property, Liability, product, technology, Uncategorized | Tagged , , , , | Leave a comment

Should food delivery focused restaurants be structured differently ?

An article in Forbes (July 1, 2016) titled “How Food Delivery startup Maple Moves Fast by starting from Scratch” describes production choices made by Maple, a company focused on food delivery. The article claims that focusing on delivery and using artificial intelligence tools has enabled the company to ship 1200 meals per hour from one kitchen. By grouping meals based on promised delivery time, efficiency across the supply chain is optimized.  A focus on sales velocity of the dishes produced and consumer ratings of the dish influences service tracking and improvement. How should food production be designed to enable delivery responsiveness ? Will Maple’s start from scratch kitchen and menu design that is adaptive to consumer ratings enable long term survival or should the focus be on a chef’s meal design that attracts customers and gets them to adapt to longer waits ?

Posted in consumer, Operations Management, ordering, Prices, product, productivity, Uncategorized | Tagged , , | Leave a comment

Even faster fashion and its impact

An article in BBC.com (September 8, 2016) titled “Designers aim for even faster fashion” describes the option of ordering items shown on the runway as a new fashion trend offered by Burberry, Tom Ford and Tommy Hilfiger. This approach drops the role of fashion magazines and trend forecasters and rushes product directly to the customers. But other industry observers claim that this is the result of competitive pressure on fashion designers caused by H&M and Zara and online fashion companies like boohoo.com. Is there a downside to this rush to get the runway apparel to the customer without the discussion that might cause an adjustment to the fashion?  Will the feedback from the early adopters impact overall sales significantly, and, if so, might there be a benefit to delay satisfaction of their demand ?

Posted in competitiveness, consumer, delivery, Global Contexts, logistics, ordering, Service Operations, ship, Supply Chain Issues, Uncategorized | Tagged , , , | Leave a comment