This ‘reshoring’ is exactly what the proponents of protectionism want to happen. By making it more expensive to bring goods from abroad, protectionism seeks to foster local production. Being a free-market advocate myself, it upsets me that it is working! As you mention, British car-makers are sourcing more parts from within the UK. This is common across all OEMs in Britain and in fact there is a Guardian article mentioning a potential Government investment of 100 to 140 million pounds to ‘repower the supply base’. This is concerning to me since eventually manufacturing plants in the UK will only chose their sourcing from a limited subset of the world’s market of component supplier (only those in the UK) which may not be as competitive. Additionally, the entire English auto-making industry may loose global competitiveness, from both increased production costs and retaliatory tariffs by trade partners, and stall altogether. Sure, they’ll be producing cars with a majority of British parts, but probably much fewer of these.
Very nicely written!
I really enjoyed reading about the competitive and business context of CemArgos. I think this illustrates very well how digitalization can be a powerful tool, in this case one that can bring about a turnaround for the company.
The author urges the company to aggressively embrace digitalization and to have a holistic and structured approach. This second point I think is paramount. In this holistic approach, companies must take a step back to make sure that they aren’t simply automating their current processes. They should be re-evaluating their business and reinventing their business model in light of technology. The McKinsey article cited below mentions that digitalization can lead to “cutting the number of steps required, reducing the number of documents, developing automated decision making, and dealing with regulatory and fraud issues.” I think CemArgos could benefit greatly from re-assessing their business model.
I don’t believe digitalization can further reduce the bullwhip effect in a significant way. As opposed to distribution models for other goods, the one for vehicles is actually quite short (few players). From prior work experience, I can say that a typical organization structure (at least in Latin America) consists of distributors (owning the dealerships), then country wide importers, and finally the production plants. The communication is constant between the parties and there is clear visibility of end demand. What sometimes causes the bullwhip effect is over or underestimation of future demand, which I don’t think could be solved with digitalization.
I did find very interesting the other implications explored by this article of this mega-trend on the industry.
The last paragraph is very thought provoking. JFK is definitely not sinking anytime soon, yet these incremental climate issues provoked by global warming are certainly a very real and immediate concern for numerous businesses and operations. To answer your question on who should bear the costs or responsibility of tackling these issues it should definitely be PANYNJ, or more generally whoever owns the business. They are the airport operators and to remain competitive, offering their customers a reliable cargo storage service, they need to improve their facilities. How and whether they chose to pass this on to their customers is up to them.
Also – loved the idea of the bullet train! I hope it becomes a reality someday.
I believe Ford made absolutely the right call in outsourcing its production – given that it is cheaper – and must disagree with the author when he/she states that this move was a risky one. The article states two main concerns about moving production away from the US: public shaming by the POTUS and a potential future big border tax. The first I don’t consider significantly impactful to Ford’s image, much less bottom line, and the second I find highly unlikely given how increasingly difficult it is for Trump to move his policies through Congress . For me the real question is why did Ford switch from Mexico to China?
 Trump’s Republicans have a tough Hill to Climb https://www.ft.com/content/0951d58a-096c-11e7-97d1-5e720a26771b
What’s the alternative? I think the key question here is how does the environmental impact of producing an electric vehicle (EV), including that of producing lithium batteries, compare to the impact of manufacturing a combustion powered vehicle. For a combustion vehicle, the engine assembly process is one of the most pollutant and energy intensive processes of its manufacturing. Producing lithium-ion batteries instead might have a softer environmental impact. That said, I do agree that Tesla should still be mindful of the sustainability of their lithium battery production. Nice essay!