Keeping an Eye on Supply Chain Trends in 2020

Keeping an Eye on Supply Chain Trends in 2020

February 6, 2020

The growth of online shopping has exerted new pressures on supply chain managers.  The outlook in 2020 is the increased application of technology to achieve faster and smarter performance in the supply chain.  This must be accomplished without raising costs or reducing variety and, at the same time, address the growing pressure for greener methods.


Video Spotlight: The Future of Supply Chain


This post is based on the Supply Chain Brief article, Top Five Supply Chain Trends to Watch in 2020, by Joe Harris, January 7, 2020; the Fortune article and video, Delivery Is Getting More Complex, but Will Soon Be Faster and Cheaper, by Hamid Moghadam, September 1, 2017; and the YouTube video, The Future of Supply Chain, by KPMG US, August 22, 2019. Image source: Design Pics / Kelly Redinger.

Discussion Questions:

1. What role will technology play in the years ahead, in improving supply chain performance?

Guidance: Technology will play multiple roles, including automating warehouse functions, artificial intelligence for warehouse planning and design, developing pre-fill order solutions to accelerate delivery, and designing packaging for material reduction, reuse and/or recyclability.

2. What consumer expectations are driving these changes in supply chain Continue reading

Facebook
Twitter
Thailand Makes Its Move in the Trade War

Thailand Makes Its Move in the Trade War

November 22, 2019

The continuing tariff war between China and the United States has forced companies to reconsider their reliance on Chinese sourcing.  Other countries throughout Southeast Asia are taking advantage of this opportunity to promote their own attractions as a base of operations.

Thailand is long experienced with foreign (in particular, U.S.) investment, but has taken further steps to attract new entrants.  It now takes only 4-1/2 days to set up a business.  Established sectors with long experience in Thailand include automotive and electronics.

New incentives over and above tax relief target “strategic investments toward future sectors” with additional concessions based on workforce and productivity investments.  FDI is already high for Southeast Asia at $227 billion in 2018, but this expanded incentive targets mid-size projects of $32 million + for near-term implementation (plans must be submitted by 2020).

One particular sector of interest is aerospace, which particularly targets U.S. investment.  Besides incentives, Thailand is promoting its central location in the region and 13 free trade agreements.  The commitment goes deeper with active involvement of the government, right up to the Prime Minister, as part of a long term approach to economic growth.

Our Video Spotlight is Continue reading

Facebook
Twitter
CostCo Vertically Integrates to Manage Rotisserie Chicken

CostCo Vertically Integrates to Manage Rotisserie Chicken

October 24, 2019

Costco is planning to vertically integrate by owning production of 40% of its rotisserie chicken supply chain.

Vertical integration is an effort to keep the price at $4.99 to attract customers.  The issue is that the main chicken suppliers are producing fewer whole birds, down from 50% of the supply in the 1980s to just around 15% of the supply today.

Bird size has also increased as the demand for chicken has increased.  Most whole chickens today are too big to fit on the Costco rotisserie production equipment.  Costco needs 6 pound birds and the typical whole chicken is now 7-8 pounds from suppliers.

Costco can control the size of the bird and plans to cut costs per bird by 35 cents by developing their own poultry complex.


Video Spotlight: This Is Why Costco Only Charges $5 For A Rotisserie Chicken


This post is based on the CNN article, Five things to know about Costco’s $4.99 rotisserie chickens, by Nathaniel Meyersohn, October 14, 2019, and the YouTube video, This Is Why Costco Only Charges $5 For A Rotisserie Chicken, by Mashed, February 5, 2019. Image source: Uwe Starke/Image Source

Discussion Questions:

1. After reading Continue reading

Facebook
Twitter