It seems that offshore manufacturing is in the DNA of the Nike business model, as the labor costs have been so significantly differently. But what if automation changes that? What if a sneaker built by robots and a few skilled production line managers makes US truly competitive? Nike and primary competitor adidas seem to be investing heavily in developing products and automated manufacturing capacity . In fact, Adidas is building a factory in Atlanta this year . If were sitting in Beaverton watching the increasing trend toward Isolationism around the world I would be exploring blue prints for smaller more automated factories that could bring the production closer to the markets they serve and ofter protection from increasing tariffs. Just don’t tell Trump that it’s robots and not the american electorate that will be working the line.
I agree that relying too much on a successful reshoring campaign is a tough sell. Particularly with how much of their sales are Europe and ROW. If I were sitting in the Jaguar Land Rover board room I would be advocating to invest more in the ‘hedge’ strategy by preparing to add capacity outside of the UK. I hear the concern on it deteriorating the brand, but I wonder if it could follow a model similar to how Mercedes handles their luxury AMG line in the US. The AMG lines are marketed toward the heavily discerning consumers with high willingness to pay and the fact that they are manufactured by craftsman in historic factories in Germany is part of the brand. However, the bulk of cars sold by Mercedes Benz USA in the US market are manufactured in the US (they are expanding this capacity and just invested a billion in a new plant in Alabama). My hope would be that by expanding capacity outside UK with Slovakia and potential new locations you can scale up to meet to meet the demand of cost conscious customers who prioritize cost over the heritage of manufacturing location, and at the same time keep your high end vehicles manufactured in the UK where increased costs due to tariffs can be absorbed in the price as it is marketed to the more discerning customer with a desire to pay for the UK heritage.
Like many of the others commenters, I am a fan of Nespresso’s efforts to reduce their climate impact and I think they should continue those types of programs. But unfortunately those actions wont be able to fully slow the effects of climate change and I wonder if a proactive measure to adjust to a changing climate could be a technology assisted innovation for farmers and seed providers. I know GMO can be an evil world in some circles, but could deliberate efforts be taken to help develop a plant that is more resistant to temperature fluctuation? By providing a crop that can be grown in existing farms despite increased climate variability, perhaps they could avoid further deforestation and help farmers maintain their livelihood. The US National Coffee association hasn’t documented any use of GMO Coffee , but the Washington Post seems to think this is coming . I think it is definitely worth looking at.
Completely agree on the nuclear operational advantages. My vote is all in to get the eco advantages and the bonus of not having to refuel (and having a lot of extra space on the ship e.g. to carry more jet fuel for aircraft that enable much more flexibility)
From an admittedly uninformed position, Nuclear stands out to me as a highly compelling solution. It solves the environmental and oil market exposure problems, but it also seems to have many operational advantages as well. For example – high energy density, it simply takes up less room than massive fuel tanks and allows the excess space to be devoted to other things. It also provides immense flexibility to reroute when needed or engage in prolonged missions that would otherwise be slowed by refueling needs. I understand that upfront cost is a significant for nuclear. But it seems like something definitely worth considering in light of the environmental benefits being compounded by additional operational benefits.
The heritage foundation shares some of these arguments in favor of a more nuclear powered navy http://www.heritage.org/homeland-security/report/the-advantages-expanding-the-nuclear-navy
In terms of superior door-to-door information management, my mind heads to blockchain. As a good chunk of the other TOM Challenge essays seem to shouting that blockchain is coming to food and agriculture fast, I wonder if Stolt getting moving into a universal ledger system would enable to better integrate with customer supply chain information management and this integration could become a competitive advantage to give an edge over Hoyos group and others. It looks like Maersk has recovered from that pesky breech that had them working off of private cell phones, and is now working with IBM to integrate blockchain. Maybe Stolt can take advantage of lessons that partnership is learning.
Tommie C – I hear you on the concern of supplier concentration eliminating productive price competition; however, I think it this case it is about how significant the cost savings from closer partnerships with suppliers can be. Because there is a cost to developing and maintaining these more involved relationships with suppliers to gain these efficiencies, you can’t do it for 10,000 of them. I think you have to pick your battles, and focus your energy/capital. But I agree that keeping in mind competition and optionality is key to not letting the supplier pool grow too small.
To your first question – what happens if they capture all historical data across 50 states and have the ability to handle the influx of new information, at that point my strategy would be to maintain that asset and extract as much value as you can from customers. Perhaps they could provide additional innovations like analysis and insights extracted from the massive data bases that customers may be willing to pay for. But I’d be worried that would be in their core competency, and I’d be more excited about seeing them apply their refined model/skill to a different space. What about applying this to broader legal records and trying to put paralegals and legal associates out of jobs instead of just the land men in oil & gas? Judicata is an example of legal tech start up that is trying to offer a similar customer promise to the legal space https://angel.co/judicata. Legal tech has a decent amount of funding sloshing around (see https://angel.co/legal), but not established market leader as far as I can tell. Maybe Oseberg has discovered a winning model and can move across industry to expand and compete.