Bob: I agree with you that Target needs to take the digitization initiatives it’s rolling out in the warehouses to broader integration of the supply chain and the sales & marketing function. Your suggestion of a demand forecast and inventory refill system that’s based on customer browsing of the Target website is interesting. But I am afraid it does not go far enough to create an individualized omni-channel shopping experience for each customer. One possible strategy is to entice shoppers to create online profiles with coupons to start accumulate more detailed purchasing behavior of Target customers. Based on those purchasing patterns, Target could send reminders to shoppers to replenish groceries when it predicts stock has run low, recommend new products that match previous tastes, and offer in-store pick-up for online orders. By applying digitization to both the back-end logistics and front-end customer interaction, Target can serve its customers in a more personalized and efficient way to increase customer retention.
I agree with your opening argument that sustainability initiatives may help companies’ top and bottom line due to consumers’ increasing awareness of climate change and endorsement of socially responsible products. While consumer acceptance is an important factor, I think sustainable sourcing of raw materials also saves money for General Mills in the long run. By promoting sustainable agriculture along its vast supply chain, Mills can ensure the farms that supply its factories optimize for long-term production volume, thereby reducing the likelihood of surging input prices driven by climate-induced shortages.
I really like your recommendations about eliminating high-risk ingredients, partnering with NGOs, and educating consumers. An additional proposal would be to gather other large purchasers of global agricultural products to set industry standards regarding sustainable sourcing. This could potentially promulgate Mills’ climate best practices to a wider range of actors. It also alleviates some concern that Mills may lose out to competitors seeking cost advantages through irresponsible sourcing practices, if the whole industry agrees to the same set of standards.
Jeff: thanks for the thoughtful article! I found it interesting that Ford decided to shift light vehicle production to China despite President Trump’s isolationist trade stance. It shows that political rhetoric alone is not enough to keep or create the much needed manufacturing jobs in America in a world where companies are competing against each other on a global scale. Mere trade barriers do not address the root cause of why American jobs are being offshored in the first place. For example, this Forbes article highlights how American automakers lost competitive advantage against Japanese players partly due to their legacy defined benefit pension obligations.  What’s needed to bring jobs back are more profound policies to improve cost competitiveness of producing in America – lower taxes, better technical education and worker training programs, and perhaps some moderation on the power of unions. All these entail tough domestic choices tending to pit one group of constituents against another within America, and will therefore cost politicians votes. Anti-trade policies just happen to offend no domestic voters because they place the blame on foreign exporters.
I am less optimistic than Jeff in believing that autonomous vehicles will render the trade debate moot by bringing jobs to American innovation centers like Pittsburg and San Francsico. Chinese companies like Baidu are competing head-on with U.S. tech and auto companies in the race towards autonomous driving.  There is no guarantee that Ford will be able to produce autonomous vehicles more cheaply in America than outsourcing/offshoring manufacturing to a different country, which will raise the same problem for domestic jobs.
 Joann Muller, “Ford’s Leaky Pension Boat Is A Multi-Billion Dollar Problem,” Forbes, https://www.forbes.com/sites/joannmuller/2013/01/31/fords-leaky-pension-boat/#684923d34ef4.
 Darrell Etherington, “Baidu Plans to Mass Produce Level 4 Self-Driving Cars with BAIC by 2021,” Techcrunch, https://techcrunch.com/2017/10/13/baidu-plans-to-mass-produce-level-4-self-driving-cars-with-baic-by-2021/.
Juan Torres – thanks for the interesting article. I wonder whether WalMart will be better off partnering with third-party firms to solve the last mile challenge given it is traditionally not WalMart’s core competency to do door-to-door delivery. I am concerned about using WalMart staff for delivery as they tend to receive low pays, and the company may not be able to sign up enough volunteers to handle a meaningful volume of deliveries. The partnership with ridesharing apps looks more promising. I wonder whether WalMart should extend the partnership to restaurant delivery apps like Caviar as grocery delivery is similar enough to food delivery. As to your question about whether WalMart is doing enough to keep abreast with tech developments, I think the real challenge may lie in the actual or perceived culture of WalMart as a steady and slow-moving organization. It may be tough for WalMart to attract the kind of tech talents it needs to adapt to the new retail environment.
I want to build on the author’s comment towards the end that Nike should consider becoming a change agent for the whole apparel industry rather than limiting sustainability practices to its own supply chain. I think a potential way to achieve that is for Nike to organize an industry alliance with other major apparel brands where all members voluntarily agree to certain sustainability standards set by the alliance. This setup has several advantages. First, it effectively acts as a self-policing body to promote sustainability standards for the apparel industry. Second, it can facilitate exchange of best practices among industry players. Third, it promulgates a common set of standards so no single company within the alliance will risk losing cost competitiveness in the production process.
This is super interesting, Eleonora! Like several other commentators above, I am intrigued by your question regarding the necessity of isolationist policies to bring jobs back to America. With cheaper energy costs unleashed by the shale gas revolution in this country and rising labor costs in Asia, America is gradually closing its cost competitiveness gap with offshore production locations. One negative implication of isolationist policies you did not have a chance to raise is retaliation. In a world where American high-tech products and professional services are still much coveted in overseas markets, any unilateral action by the Trump Administration to raise trade barriers may trigger reciprocal trade restrictions on American companies doing business abroad. Given the increasing importance of China and other emerging economies as end markets for American goods, a trade war initiated by the US may well end up in a lose-lose situation. If the Chinese start to reciprocate by levying 50% tax on iPhones, Chinese buyers may switch to domestic brands like Xiaomi, causing job losses in the US tech sector. After all, trade occurs when both parties receive a benefit. Trying to artificially restrict trade takes away from the mutual benefit.
I agree with the author that automation and digitization holds great potential to improve the productivity of mining companies. Given the high fixed costs associated with mine operation, any improvement in production yield and asset utilization in a given unit of time with a given amount of equipment will flow directly to the bottom line. Self-driving vehicles and sensor-equipped technologies, as the author points out, achieves better efficiency in the production process. However the efficiency gains need not be limited to mine production. What I find most exciting about the author’s article is the potential to use data to integrate miners’ sales & marketing operations with its production to adjust output rate and product mix according to market demand. I agree this will be the natural next step for Rio Tinto to take its current technology. As to concerns about local job creation, I think this is not a unique problem posed by higher-tech mining, but a more general issue our society will face with the rise of Artificial Intelligence and automation which also permeates to many other sectors. I suspect the right channel to tackle this issue is a complete rethinking of our current income distribution system – after all when machines are productive enough, we no longer need to employ all humans to maintain the same level of societal wealth. The question is how to redistribute the productivity gains from the technology owners and operators to the remaining population. A minimum guaranteed income scheme as proposed in several Scandinavian countries may be a good start.