Section G TOM
Nice post! After reading “The Everything Store” a few years’ back, one of the striking things I took away about Amazon was the beauty of its fulfillment system (then comprised of a few dozen centers, which now total 70): the centers are spread around enough to be within a day’s shipping of any US address, yet large enough to handle the diversity of orders that could originate from any one customer in a technologically-savvy and cost-efficient way. The notion of Target “retrofitting 1800 stores” (as this paper suggests) to compete with Amazon through last mile robotic delivery seems fairly daunting to me, both from a cost and logistics perspective. I don’t know the intricacies of Target’s supply chain, but I wonder if there’s an ability to build fulfillment technology one step higher up the chain (at distribution centers) to reduce the costs and increase the speed through which Target can more effectively compete in ecommerce? This feels a lot more manageable, scalable, and effective than retrofitting 1800 stores to compete with Amazon in ecomm.
Great write-up! I would need to have a better understanding of the cost of biofuel relative to traditional oil to have a betterssense as to whether or not Alaska Airline can (or would) go all-in here and lead by even greater example on the emissions footprint front. Oil is the largest variable cost that affects airline profitability – and much of barrel prices are controlled by macro events outside of an airline’s control. If biofuels are substantially (or even slightly) more expensive than current fuel, it’s hard for me to see airlines transitioning to the former, given how high an input fuel cost is to profitability. Conditions I could see leading to an increase in biofuels in the fuel input mix of Alaska Airlines (or any airline) are: 1) a significant increase in the price of oil rendering biofuels cheaper (or considerably less expensive) in comparison, 2) biofuels comprising a small percentage of an airline’s fuel cost, or 3) airlines transitioning to biofuels to get out of the volatility of the oil market, or 4) proof that airlines can attract substantially incremental revenue by highlighting their sustainability practices. The latter of these seems the least likely, but as the impact of business operations on the climate continues to worsen, I hope that companies – and their employees – act soon.
Nice write up! While I completely agree that the cost of hydrogen is currently prohibitive for it to sustainably fuel a majority of cars in Japan, I think there’s potentially substantial benefit to take a loss to ensure these cars are up and running during the Olympic Games, when Tokyo has the attention of the world. This could do a significant amount to, like the Shinkansen back in the 1960s, impress the world and again highlight Japan as a forward-thinking automative power, and potentially: 1) attract additional outside investment to iterate on the current version and lower costs, and 2) encourage other countries to invest in hydrogen, thereby expanding the impact that Japan can have outside its (as Mengwen noted) relatively small walls.
Great write-up! This is a perfect case study of how the failure of an incumbent player to adopt to a disruptive force leveraging the power of supply-chain digitization can potentially bring about its demise. While I don’t know that CH Robinson can compete with Uber or Convoy from a technology front, it also seems like their only other long-term option – other than evolve technologically – is to die a slow death. This article raises the point that the company’s main differentiator is its relationships and intimate knowledge of its shippers. That’s all well and good, but as technology enables its competitors to offer: 1) better services and 2) more data/informed decisions, at a 3) cheaper price, the institutional knowledge that CH Robinson possesses starts to look a lot less attractive by comparison. If I were an exec at the company, I would seriously look into potential partnerships with up-and-coming automated freight companies (e.g. the next Convoy) to leverage the power of the company’s institutional partnerships with the product that is inevitably going to power the future of the industry.
Nice write up! On the topic of question 1, I don’t think Hyundai’s efforts are for naught as a result of the US leaving the Paris Climate Agreement: in fact, I think it makes their work all the more imperative. While the US’ removal from the agreement definitely creates a hole, it’s a hole that can be (at least partially) filled by a consortium of large and influential corporations taking onus on themselves (whether altruistic or to indirectly benefit revenue through social impact advertising) to reduce their carbon footprint. I’d be interested to see how these best-practice sharing agreements you suggest in your paper come into play here: on one hand, it seems like a great opportunity for businesses to band together to help the greater good; on the other hand, it seems like it could create an environment where one or two players could try to gain share by benefitting from the lower cost basis one has if not forced to comply with stricter climate standards. Even so, the aggregate impact on the climate of auto manufacturers adopting best practices seems to far outweigh the risk of some outliers not complying for their personal gain.
Great write-up! I think you’re right that the digitization of Blue Apron’s supply chain is crucial – and not just to compete with Amazon, but for it to simply survive. It’s 16% daily stock dip on news a few weeks back over increased costs associated with supply-chain issues in its NJ fulfillment center highlighted the huge risks in having human labor compete against Amazon’s extremely automated chain. This reminds me of some of the differences between the Santa Clara and Yokahama plants in tonight’s United case: in a world where Blue Apron is competing on quality and price, it’s requisite that they be able to compete with Amazon on cost, which they clearly can’t do in a profitable fashion with the current supply chain (both in the fulfillment center and beyond). Figuring this out in the very near future – and convincing investors that there’s an actionable plan in the offing – seems imperative to Blue Apron’s survival.