Chipotle’s issues seems to highlight a tension particularly prominent in the supply chains of food: diversification versus sustainability. Typically, to reduce reliance on specific sources and to mitigate exposure to localized risks, a company would look to diversify its suppliers. However, with food, companies are constrained by factors such as product perishability, and increasingly, expectations of sustainability. Sustainability in food can mean a lot of different things: non-GMO, humanely raised, fair trade certified, etc. Recently, sustainable ingredients have also come to imply ‘local’. Consumers have come to perceive locally sourced foods as healthier, not to mention more economically empowering to the community to which they belong, and have come to reflect this in their demand. To what extent can Chipotle satisfy consumer expectations of local sources and sustainability while managing their risk to climate change an geographic events?
I applaud Huawei’s efforts to encourage and enforce environmentally sustainable practices among its supply chain partners. To take it a step further, I would suggest that Huawei turn the lens on itself and see what they could do to promote green practices within its own organization.
During a recent TOM Field Trip, I found that Fidelity prides itself on its energy-efficient office buildings and data centers. Given that they are a financial services and institutional investment firm, one would think that their environmental impact would not be high, at least not as much as manufacturers. So, if they can implement these environment standards on their own practices, Huawei could too. To Japees’ point above, there are also industry certifications in this space (such as the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED®) and the Green Building Initiative’s Green Globes®) that could be highlighted in marketing materials as well.
This post reminded me of the challenges faced by United Interconnect, wherein their use of third party suppliers for their machinery resulted in information leakage of their proprietary design and technology. The solution we had identified then was to bring all this development in house, which it seems like FLIR is trying to do by vertically integrating its supply chain. Given the sensitive nature of FLIR’s offering – military product is certainly quite different from interconnectors! – I wonder how and to what extent FLIR should vertically integrate to protect its competitive edge. Should they prioritize vertical integration for their military-oriented products, or across the organization as a whole? What points in the supply chain should FLIR bring in-house, and how does this impact the ultimate cost of manufacturing their product?
I wonder if acquisition may be a possible strategy to mitigate the effects of higher tariffs due to Brexit. As you noted, Diageo currently issues licenses with companies to brew their products in the local market. As tariffs increase, and hinder supply in export markets, Diageo could consider filling gaps in those markets by acquiring local brands and producers that make a similar product. Of course, in doing so, they would limit their ability to capitalize on the brand equity of names such as ‘Guinness’, but would be able to maintain the presence held by the overall Diageo organization in these markets.
It seems to me that a key constraint in scaling the 3D-printed prosthetics across countries is the raw material inputs – both in terms of access and reception by the constituent population.
As you noted, 3D printing is currently specific to certain materials. So whether or not 3D PrintAbility will be able to penetrate a certain market will rely on ready supply of those materials, an obstacle possibly more pertinent to developing countries than in developed.
However, as Karen mentioned above, there is also a perception component to raw materials, particularly in developed markets where there is the luxury of choice. Do consumers have a preference between materials, for plastic prosthetics or for rubber? If they do, is the quality gap real or perceived? In addition to ensuring an adequate supply of raw materials, 3D PrintAbility may do well to consider a marketing campaign to educate customers and to help shape market reception and demand.
I agree with Nico above – as I read this blog entry, I was struck by the similarities between the vision of Cimpress and the intention behind lifung.com.
As Cimpress evolves, it is important to consider how their customer promise may change. In its current form, I would argue that Cimpress conveniently fulfills quality product (per custom order) at low prices, given the cost savings from aggregation. Customers submit their orders to Cimpress and Cimpress analyzes and determines the best way to deliver on their request. In the absence of Cimpress, customers would have to source their own suppliers and pay higher prices to have the products made.
However, as Cimpress expands their platform – and especially as they do so beyond branded merchants – Cimpress effectively becomes a two-sided platform, accountable to both the merchants on the platform as well as customers that require custom prints. What becomes of their customer promise? Is it still rapid delivery of custom orders at low cost – or does it become efficient search and matching between print demand and print merchants? Would Cimpress still be able to harness the cost benefits of scale and aggregation when they no longer own all the merchants on the platform, and do not have visibility or access to their data?