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Happy Meals, Smartphones and the Supply Chain

Posted 11-09-2010 at 02:25 PM by Albert Fong (Al's Supply Chain Corner)

From the ban on McDonald’s Happy Meals to smartphones evolving into a shopper’s best pricing tool, a lot of things are changing right in our own backyard. Regardless of where you are in the supply chain, the business environment is constantly changing as a result of technology, public policy, consumer preferences and economic health among others. That doesn’t even include risks that keep most of us up at night…hopefully not all night.

For example, San Francisco recently passed an ordinance that bans using toys to entice kids to buy meals (i.e. Happy Meals). If you’re like me, I can’t remember a time without Happy Meals. Not that I ate them every chance I had, but the term “Happy Meal” is arguably as American as apple pie. If you’re McDonald’s, this ordinance potentially puts a damper on future sales since other cities and locales will likely consider similar initiatives.

Those Happy Meal toys with the promotional tie-ins will likely find homes...
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Politics: A Supply Chain Risk We Take for Granted

Posted 10-20-2010 at 01:21 PM by Albert Fong (Al's Supply Chain Corner)

Back in July, I wrote about rare earth minerals (REE) and their importance to the high-tech industry. From cell phones, laptops and almost any type of electronics you can imagine, REEs make them work. China controls the largest source of these materials in the world, and thus with control comes risk—risk to the demand base.

As we approach the November elections, I’m reminded of the ramifications of politics both domestically and abroad. In September, China stopped all shipments of REEs to Japan in retaliation for Japan’s detention of a Chinese fishing boat captain. And earlier today, rumors swirled that REE shipments were also being cut to the U.S. and the European Union because of environmental concerns. It certainly highlights the fragility of any supply chain and the risks involved regardless of how much planning is involved. Because of China’s near monopoly of REE (the country holds 95% of the world’s reserves), countries such as Japan and the U.S. potentially...
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Taming the Animal Known as the Economy

Posted 10-08-2010 at 11:41 AM by Albert Fong (Al's Supply Chain Corner)

The economy is a strange animal these days full of uncertainty and prone to dramatic mood swings. Ask any number of financial and industry experts, and you’re likely to hear a wide range of different perspectives (or guesses as I like to call them). For example, the retail area is full of cautious optimism with some retailers seeing growth as small as it may be, while others are still in a holding pattern. Retailers such as Macy’s and Best Buy reported positive quarters while others such as the Gap aren’t. The same mixed bag also applies to 3PLs who are trying to find a balance between inventory and consumer demand. Just last week, Armstrong & Associates estimated that the 3PL industry will see a 13.4% increase from last year (a gross revenue of $121 billion).

One thing that experts agree on is that businesses can’t remain on the sidelines indefinitely. While the financial numbers provide a potpourri of good and bad, they do show that the economy is stabilizing,...
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The Supply Chain’s Image Problem

Posted 10-01-2010 at 12:38 PM by Albert Fong (Al's Supply Chain Corner)

This past week I attended CSCMP’s annual conference in San Diego, one of the industry’s top events for everything and anything supply chain. One of the differences with this conference is its educational focus where the gathering is more about learning and exchanging ideas rather than selling the latest wares. A fair amount of visitors to the RedPrairie booth were college students intent on networking and hearing about the innovations in our world (robot pickers anyone?)

One particular grad student stands out (and not just because her thesis is on cloud computing in the supply chain). She asked a rather pointed question—“Why doesn’t the supply chain get much respect outside of the business world?” Jokingly I told her, the supply chain doesn’t get much respect from the business world either.

There’s certainly an ounce of truth to my response, although businesses today are more cognizant of the financial benefits of a strong supply chain and logistics...
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Today’s Big Economic Hurdle – An Unwillingness to Change

Posted 09-20-2010 at 12:22 PM by Albert Fong (Al's Supply Chain Corner)

With the U.S. dealing with its own share of economic issues, it’s easy to forget that we’re not alone in this global economy. Other nations are dealing with the same uncertainty and forced to jump through similar hurdles. The supply chain is no different, and while the infrastructure here in the states could stand some improvements, countries in the midst of significant changes face major growing pains. One thing is for sure…while the resources may be available on paper, changing attitudes can often be a difficult and even insurmountable hurdle.

For example, India is a nation where growth can be severely limited by its infrastructure. According to a report by McKinsey & Co., India has $45 billion in losses annually because of inefficient logistics. That’s a staggering amount until you realize that those losses could more than double to $140 billion in the next decade. Right now, 57% of the country’s freight is done by roads, 36% by railways, 6% by waterways,...
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