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

Bird flu and global poultry supply chain impact

An article in the Wall Street Journal (March 22, 2017) titled “Bird-Flu Outbreak Brings Pain for Poultry Producers in Asia”, describes the emerging cases of H7N9 bird flu in China, with over 140 human deaths in China this year alone, and its impact. Poultry farmers in China are dumping product so that prices have dropped 13% and imports 24%.  But markets in South Korea have seem price increases due to low supplies. With China banning US imports over avian flu concerns, Thailand is expected to benefit from China market growth, with Chinese imports expected to grow by 10%, making it the second largest importer of poultry (Mexico is the largest).  How should US poultry producers manage the volatility caused avian flu ? With large stocks culled across the world (30 million in South Korea alone), how should producers plan their chicken inventory to optimize performance ?

Posted in Capacity, chicken, competitiveness, consumer, Cost, disruption, Global Contexts, Supply Chain Issues, Uncategorized | Tagged , , , , | Leave a comment

Agristats and possible chicken supply coordination

An article in Bloombergbusinessweek (February 15,2017) titled “Is the Chicken Industry Rigged” describes the increasing profits for chicken manufacturers and a lawsuit about possible coordination. The industry participants subscribe to an information sharing service, Agristats, owned by Eli Lilly, that provides data across the industry regarding individual plant details. The claim in the lawsuit is that such knowledge enables competitors to understand production rampup plans of each other, and thus coordinate actions without meeting. The class action lawsuit claims a resulting increase in prices from what they may have been. How much detail should the trade be permitted to share with each other to improve efficiency while not enabling collusion ? Should rational decisions from such shared data that improve profits be considered unacceptable or are they a portion of the efficiency benefits shared by the industry ? if, as the industry claims, prices went down during this period, is that evidence that such collusion did not take place ? Could prices have not gone down as much as feasible because of implicit coordination ?

Posted in Capacity, Collaboration, competitiveness, consumer, Cost, Liability, Operations Management, ordering, productivity | Tagged , , , , | Leave a comment

Smartphone ordering and long lines at Starbucks

An article in CNN Money (http://money.cnn.com/2017/01/27/investing/starbucks-long-lines-mobile-ordering-earnings/index.html) describes customer adoption of the Starbucks app to order and pay, but the consequent long wait to get their drinks.  The company expects over 30% of the orders at stores to move to mobile orders, but the long wait for delivery has been causing other customers to leave the store without purchase. The repeated reference to congestion in the earnings call on January 26, 2017 suggests the seriousness of the problem. Would offering mobile orders a delivery schedule for their drinks help smooth out queues ? Should customers be offered a delivery estimate before their mobile order to ensure fairness ?  Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ?

Posted in Capacity, Ecommerce, fairness, Operations Management, ordering, queue, Service Operations, Starbucks, technology, Uncategorized | Leave a comment

The costs and benefits of drop shipping to customers

An article in the Wall Street Journal (January 26, 2017) titled “Drop Shipping set to go mainstream as more retailers get on board” describes retailers use of shipping directly from suppliers to customers as a way to increase variety offered and reduce costs to compete with eretailers.  Retailers claim that shipping from suppliers relieves them of inventory costs for bulky items and large color assortments. But asking suppliers to ship to customers while retailers remain responsible create associated challenges for handling returns, fulfillment as well as lower retailer visibility.  Associated strategic concerns include evolving suppliers to become retail competitors as they get direct access to customers.  How should retailers manage this tradeoff associated with drop shipping ? Can customer information be entrusted to logistics providers and not suppliers to preserve retailer relationships with customers ? How can retailer visibility to fulfillment be preserved under drop shipping

Posted in Collaboration, consumer, Cost, delivery, Ecommerce, Operations Management, ordering, supplier, Supply Chain Issues | Leave a comment

Amazon’s patent for flying warehouses and delivery drones

An article in techcrunch.com (https://techcrunch.com/2016/12/28/amazon-patents-show-flying-warehouses-that-send-delivery-drones-to-your-door/) describes a patent filed by Amazon that describes a floating warehouse that can deliver product to customers via drones. By parking the warehouse close to large gatherings (such as sporting events) the patent claims quickly precise delivery. The patent also considers ensuring product freshness using temperature controlled drones. How much of a premium will customers have to pay to make the economics work for such deliveries ?   How important will it be to accurately forecast of demand at such locations to ensure profitability ? What other uses can you imagine for such a logistics approach ?

Posted in delivery, Ecommerce, logistics, Operations Management, ordering, Supply Chain Issues, technology, Uncategorized | Leave a comment