Great topic and analysis, thanks Amenda. I agree with both of your recommendations in terms of focusing on long term when making manufacturing sourcing/ investment decisions and separating operations based on asset type. The hard question is how to better predict future policy trends and make decisions minimizing adverse impacts on the short run while exchanging for long-term benefits. Just to add another perspective to the list above, personally I feel isolationism will also move relative powers among different countries around the globe, and it might be helpful to assess how the dynamics in relative power positions may change as a result of isolationisms, in an attempt of predicting long-term policy trends while making basing decisions of global manufacturing.
One of the most interesting topics I have read in TOM challenge. Thanks.
Thanks Vanessa. I also did a bit of research on a Chinese e-commerce, JD.com, which is developing a large drone delivery network within China. Although there are differences in terms of market opportunities and regulatory landscapes between China and US, both markets share quite a few common challenges. One potential solution to partially mitigate end-customers’ concerns over safety/ security in the near-term, with drones increasing overall supply chain efficiency, could be using drones between warehouses or between warehouse and local distribution center which locates closer to package receivers. The last mile may still require manual delivery, but once the drone network/system is fully developed/ tested, it can expand to the real “last mile”. Overall I agree, drone delivery for e-commerce has huge potential in future.
Thanks for putting together such an interesting article. While going through different posts, I tend to find myself more interested in topics related to sustainability and fashion. You raised several very good questions in the end of the article. I think both shifts in customer preferences and innovations in upstream supply chain are crucial in driving fundamental changes towards a more “green” fashion industry. Customers for luxury goods are less price-sensitive with higher financial affordability in general, which allows luxury companies to be able to pass-through additional raw material costs attributed to environmental protection without eating up too much margins. However, how to educate customers’ preferences is still challenging in certain circumstances. The solution is not easy but definitely worth exploring.
A very interesting article, thanks Lawren. Environmental sustainability is Reformation’s top customer promise since its establishment, which is great but also challenging for a fast-fashion company because it cannot pass higher upstream raw material costs to end-customers as easily as a luxury apparel company might do. As what we learnt from IKEA case, from long-term perspective, it is important to find a way of absorbing additional costs attributed to environmental sustainability without eating up margins nor increasing end-user prices. In my opinion, technology innovation of raw material production is also crucial.
Thanks Bill. It is great to learn about JD’s overall “smart supply chain” strategy in your article. Agreed with all your points – one concern I might have for JD is whether its current strategy of investing heavily in logistic infrastructure with reliance on in-house R&D capability is a better use of capital, given its increasing pressure of meeting profit targets. Instead, to some extents, JD may seek for partnership with other companies with expertise in relevant areas?