Thanks for the interesting read Justin! In this thread, there has been a lot of discussion about the United States’ defense tactics regarding this issue. It’s evident that Mexico is currently very dependent on a supply of natural gas from the U.S. As Grant mentioned, I’m curious to how Mexico is thinking about this issue and hedging for it on their side. However, in recent years, Mexico has been investing more in alternative energy supplies, including wind and solar.
In a recent study by GTM research, Mexico was identified as one of next five countries to surpass 1 gigawatt threshold of solar energy installed annually. Wind power is also on the rise. Enel just announced this week that it won the right to develop four new wind farms in Mexico that will generate 593MW. As Mexico’s supply of other energy sources increases, it may lead to reduced dependence on the U.S. natural gas supply.
GTM Research, “Here Are Solar’s Next Gigawatt-Scale Markets,” https://www.greentechmedia.com/articles/read/here-are-solars-next-gigawatt-scale-markets#gs.fwteTJs
RE News, “Enel Secures 593MW in Mexico,” http://renews.biz/109246/enel-secures-593mw-in-mexico/
Amanda, thanks for highlighting the impact of isolationism on Ford! In addition to the manufacturing challenges that are discussed in your article and many of the existing comments, I think it’s interesting to think about the final step of Ford’s supply chain – selling to the the end consumer.
Ford, among many other major car manufacturers, are having difficulty remaining competitive in certain international markets. For example, Ford pulled out of the Japanese market last year. While it’s true that trade and protectionist policies had an impact on Ford’s ability to compete with domestic auto makers in Japan, the article below emphasizes that isolationism is not the sole reason.
Foreign auto makers, including Ford, have been unable to adapt to differences in Japanese customer preferences related to cars. In Japan, the purchasing process is extremely service-orientated. It is not uncommon for a salesperson to come to a customer’s home to test drive potential cars. Furthermore, Japanese car owners expect more free services from their dealer. Domestic dealers will often pick up and return a car to its owner when service is necessary.
Therefore, as Ford continues to reflect on how isolationism is impacting the various areas of its supply chain, it’s important for the firm to still keep cultural differences in mind for both manufacturing and selling in various global markets.
Source: The Atlantic, “Why Aren’t U.S. Cars Popular in Japan?” https://www.theatlantic.com/business/archive/2017/11/us-cars-japan/544991/
Thanks for sharing Alex. As a former Denver resident, I was curious to see how craft breweries are dealing with these issues in similar, or different, ways than Anheuser-Busch. The article below references another way in which craft breweries are impacted by climate change at a higher magnitude than ABI – massive storms that destroy their production and storefront facilities. These small businesses have been tasked with the challenge of developing stronger infrastructure to withhold unpredictable hurricanes and other weather events. While ABI may at times be affected by irregular storms, I suspect that it is at a much smaller level due to the magnitude of their facilities. That being said, downstream partners in their supply chain, such as liquor stores, may also be impacted by these storms.
Similar to ABI, craft brewers also recognize the significant threat to raw materials, including water, and are taking action to combat climate change at a greater scale. A number of breweries have signed the Brewery Climate Declaration to help draw increased attention to the severity of climate change in the beer industry and become accountable for reducing their carbon footprint.
It’s great to see that craft breweries are taking initiative; however, given the scale of ABI’s operations, I agree with that Drew that ABI needs to be a leading force in addressing climate change for the industry. I hope that ABI will look for ways to share best practices with craft breweries so that this entire industry can battle climate change on a unified front.
Source: HuffPost, “These Storms Are Just Crazy: Craft Brewers Feel The Affects of Climate Change.” https://www.huffingtonpost.com/entry/craft-beer-trump-climate_us_5a1419ace4b0c335e9973a91
This is super interesting article Ivneet! I had not realized the scale of this issue. Another element to consider is how effectively digital traceability can be implemented on a global scale – in particular, the speed and complexity of doing so in developed vs. developing countries.
The World Health Organization just released an article last week reporting that an estimated “1 in 10 medical products circulating in low- and middle-income countries is either substandard or falsified.” Certain countries, including the United States with its Drug Supply Chain Security Act (DSCSA), are beginning to introduce laws that require the digital tracking of medication from production to scale. However, these traceability systems may be much more challenging to implement in developing countries.
My hope is that as large pharma companies develop robust digital traceability systems, they will take a holistic approach to eliminating counterfeit drugs across the globe, rather than focusing primarily on top revenue-driving countries. To do this, they will need to partner with developing companies, most likely at the expense of profit, to help these countries build the necessary digital infrastructure and processes.
Source: NPR, “Fake drugs are a major global problem, WHO reports,” https://www.npr.org/sections/goatsandsoda/2017/11/29/567229552/bad-drugs-are-a-major-global-problem-who-reports
Thanks for highlighting these issues! I completely agree that while the Pixel is an incredible product, Google has encountered a number of challenges in successfully penetrating the smartphone market. Their supply chain management issues have definitely played a major role.
Another element of the supply chain that Google needs to focus more attention on is the role of cellular carriers. A report from strategy& emphasizes the importance of prescriptive supply chain analytics, including real-time demand information, in a digital supply chain. As Google continues to strengthen partnerships with carriers, they need to consider how to best integrate these partners into their digital supply chain.
Carriers hold very valuable data on customer preferences and demand; however, similar to the concerns expressed in the comment above, I presume that the carriers will be hesitant to share certain data points with Google. Nonetheless, a certain level of information flow between the two is essential to take advantage of perspective supply chain analytics. If they fail to align carriers to their internal digitization initiatives, consumers will continue to face issues in receiving the Pixel phone when and where they want it.
Source: strategy&, “Industry 4.0: How digitization makes the supply chain more efficient, agile, and customer-focused,” https://www.strategyand.pwc.com/reports/industry4.0
Thanks for the great read! I love reading about the business models of companies that promote healthy habits and sustainability. However, I am a bit skeptical about the viability of local supply chains in reducing GHG emissions and challenge your point that food miles and GHG emissions are directly correlated.
In a German study published last year, researchers investigated if commodity foods produced locally resulted in lower GHG emissions than food sourced from another continent. The study analyzed the difference between choosing to optimize (1) distance between production and consumption or (2) total CO2e emissions during cultivation, processing, and transportation. Results showed that the latter scenario produced significantly lower emissions. Reason being, the percentage of the total emissions that was caused by transportation was quite small. Therefore, to minimize total emissions, it is better to select the global region that can cultivate, process, and transport the crop with lowest emissions.
This being said, this study looked specifically at commodities (wheat, sugar, oil, barley, maize); however, Sweetgreen’s inventory includes many unique, seasonal ingredients that may not produce the same conclusion in this study. Futhermore, there are unfortunately many factors that prevent a global production model that optimizes for GHG emissions from being instituted – including natural security concerns and positive consumer preferences around local sourcing.
Source: Kreidenweis, Ulrich, et. al. “Regional or global? The question of low-emission food sourcing
addressed with spatial optimization modelling” Environmental Modelling & Software. https://www.sciencedirect.com/science/article/pii/S1364815216301153