Factors Affecting Supply Chain Resilience

Factors Affecting Supply Chain Resilience

COVID-19 has exposed many vulnerabilities in our supply chains.  Of particular note are supply chains for food and personal protective equipment (PPE).

Most people take for granted that we can walk into a grocery store, and leave with a wide variety of food items.  However, in Spring 2020, this was not the case.  Many store shelves were bare, including some essentials such as flour and pasta.  Many farmers destroyed milk, eggs, and chickens, while other crops rotted in the field.

Similar problems have occurred across almost every supply chain.  Shortages of PPE occurred during the early stage of the pandemic. Most PPE production was concentrated in China.  The combination of disrupted production and transportation and increased demand created shortages.

Shipping containers have made worldwide transportation more efficient and reliable.  As a result, organizations have spread their supply chains throughout the world to increase their efficiencies.  This has also led to concentration of production, a reduction in the number of suppliers, and added a bottleneck, as seen in the recent blockage of the Suez Canal.

The food supply chain illustrates many problems brought on by a search for efficiencies.  To increase Continue reading

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Big Ship Creates Big Backlog

Big Ship Creates Big Backlog

When the Ever Given got stuck in the Suez Canal, its gigantic size became a gigantic problem.

To support an ever-expanding global trade, ship size has been increasing for decades. Today, the largest ships can carry between 18,000 and 24,000 containers.  A larger cargo makes perfect economic sense because the cost of shipping one container decreases as cargo capacity increases. However, when things go wrong, big ships mean big disruptions in an already strained global supply chain. It is estimated that the stranded ship held up 12% of global trade at an estimated cost of $9.6 billion a day. This financial and logistic threat, along with more elusive cost savings in the future, may signal the need for fresh ideas in global shipping.

 


Video Spotlight: The Ripple Effects of the Backlog


This post is based on The New York Times article, Why the World’s Container Ships Grew So Big, by N. Chokshi, March 30, 2021, and the YouTube video, Cargo Ship Freed from Suez Canal, but Shipping Backlog Could Last, by CBC News: The National, March 29, 2021. Image source: (c) Glow Images/SuperStock.

Discussion Questions:

1. Will the short-lived blockage have a major Continue reading

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Tequila and Bacardi: An Unsavory Cocktail?

Tequila and Bacardi: An Unsavory Cocktail?

Francisco Alcaraz was a master distiller of tequila whose scientific knowledge, passion, and unconditional commitment to quality contributed to producing Patrón, one of the best tequilas in the world.


Video spotlightPatrón Tequila: Our Story


Along the way, the business success of Patrón has attracted many investors, including Bacardi.

Will Bacardi’s business model of favoring industrial over artisanal production pose a risk to the quality reputation of Patrón?

 

This post is based on the Bloomberg article, Patrón Made Tequila Top-Shelf. Will Bacardi Dilute It?, by T. Genoways, July 31, 2018. Image source: C Squared Studios/Getty Images.

Discussion Questions:

1. According to the Kano model, what type of quality does Alcaraz want to produce? Will there be a shift if Bacardi wants to boost volume?

Guidance: Review basic quality, performance quality, and excitement quality. Given Alcaraz’s insistence on premium quality as opposed to volume, he aims at producing tequila that will deliver excitement quality. The blind taste test at Spago provides further evidence of this approach to quality. Discuss the potential for a “downgrade” to performance quality if Bacardi wants to boost volume.

2. What are the pros and cons of Bacardi’s production methods?

Guidance: Continue reading

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