Supply Chain Article

David Hart’s picture

By: David Hart

Climate plans are the order of the day in the presidential primary campaign because carbon pollution is a global threat of unique proportions. But it’s worth asking whether candidates’ plans are based in the reality of the climate, the economy, and the election.

All three dimensions must come together for any climate plan to achieve its goals—and this is especially true when the subject is electric vehicles (EVs). There is no point in putting forward an EV plan that is so aggressive that it cannot be implemented even under the most auspicious economic circumstances. Nor is there a point in advancing an EV plan that would not yield significant climate benefits. And, if such a plan might hurt a candidate’s chances in the election, it would be worse than pointless.

Following the lead of Governor Jay Inslee, who dropped out of the race earlier this fall, Senators Cory Booker, Bernie Sanders, and Elizabeth Warren said they would require all passenger cars sold in the United States to be zero-emissions by 2030, while Senator Kamala Harris and Mayor Pete Buttigieg set a 2035 deadline.

Thomas R. Cutler’s picture

By: Thomas R. Cutler

Quality control and inventory control are equally important to the ongoing success of all manufacturing businesses. Both form the basis of an efficient organization that operates at high productivity levels, minimizes waste, and delivers quality products to meet or exceed consumers’ expectations.

Until a about decade ago, there were layers of quality assurance and quality control steps before products reached the end user. Along with production controls, these steps included quality controls related to warehouse operations, logistics, and inventory verification at retail stores, in order to double-check product quality and order fulfilment accuracy.

Today, more than a million small manufacturers worldwide have forgone any retail sales in favor of a D2C (direct to consumer) model, cutting out warehouse operations and retail stores. The reason is simple: margins. A jewelry manufacturer, for example, selling a bracelet for $20 online, with hard costs of $2, can realize huge profit margins by eliminating the wholesale middleman. That same bracelet would have wholesaled to retailers for $8. But now, while product quality is still a customer expectation, consumers also expect quality delivery and customer service.

Larry Emond’s picture

By: Larry Emond

No matter where you’re located, you might think that Schneider Electric is a native company. It’s an easy assumption to make. The €25.7-billion energy, automation, and software solutions company is officially headquartered in France, but its strategy is to localize to the markets it’s in—and it’s in most of them.

Schneider’s localization strategy requires distributed leadership, so the company spreads its top 1,000 leadership roles around the world. Leaders stay in situ for years, which keeps culture universal and decision-making decentralized. This allows for precision responses in differentiated business ecosystems and attracts talent where it lives.

That helps Schneider Electric weather economic storms that drive competitors out of the market, but being the most local of global companies requires leaders who prize diversity and want to become local experts of the whole world—and Schneider’s chief human resources officer (CHRO) Olivier Blum says it’s a strategy that others may have to adopt. As he explains to Gallup’s managing partner Larry Emond in the following conversation, “People don’t want to work in the old model where all decisions have to go back to the global corporate. So localization? Companies really have no other choice.”

Dileep Thatte’s picture

By: Dileep Thatte

According to information from the Centers for Disease Control and Prevention (CDC), every year 48 million people in the United States get sick, 128,000 are hospitalized, and 3,000 die from foodborne diseases. That means one in six people in the United States get sick from contaminated food every 12 months. These statistics are important to take note of and address because the U.S. food supply also represents a huge economic asset, contributing almost $1 trillion to the national gross domestic product (GDP) each year.

William A. Levinson’s picture

By: William A. Levinson

How will the United States’ withdrawal from the Paris Agreement affect greenhouse gas emissions? Quality Digest editor in chief Dirk Dusharme and Mike Richman, principal at Richman Business Media Consulting, point out that most manufacturers already recognize that waste, including waste of energy as represented by carbon emissions, costs the supply chain money.1 This leads to my conclusion that withdrawal from the agreement will not have any significant effect on U.S. carbon emissions.

Involving relevant interested parties

It is a basic principle of ISO 9001:2015 that organizations must identify the needs and expectations of their relevant interested parties, but not all interested parties are relevant. The Paris Agreement offers little identifiable value to organizations, so it is not a relevant stakeholder. Neither are investment banks that had hoped to profit from cap-and-trade mandates.2 The supply chain should contain nothing that does not deliver value to the other supply chain participants.

Boris Liedtke’s picture

By: Boris Liedtke

In May 2019, a California jury found Monsanto’s weed killer, Roundup, to be a “substantial factor” in the cancer suffered by a couple and ordered the U.S. agrochemical company to pay them $2 billion in damages. This was the third and largest verdict against Monsanto, now owned by German pharmaceutical giant Bayer, over its decades-old product.

A judge slashed the award to $86.7 million in July 2019 after Bayer appealed, but it is cold comfort for the company. An estimated 13,400 similar Roundup cancer cases are pending in state and federal courts across the United States. European investors and Bayer’s management are in shock at the size of the settlements.

J. Stewart Black’s picture

By: J. Stewart Black

For growth-starved Western entrepreneurs, the Chinese market is appealing. Think about it: Since 1995, China’s economy has grown by a factor of 18.5, from $735 billion to $13.6 trillion (excluding Hong Kong). In terms of purchasing power parity, it is now the No. 1 economy in the world.

Accordingly, many foreign companies have gone out of their way to build supply chains within the country and go-to-market mechanisms in order to access its market. Across industries, U.S. firms have invested more than $276 billion in China since 1990. In 2018, foreign direct investments from all countries flowing into China reached $139 billion.

David Midgley’s picture

By: David Midgley

Ask any manager at a large organization why the purchasing department matters, and the first factor he will mention will probably be costs. But cost control, though a core competency, is far from the only way purchasing affects firm performance.

Every contract signed with a supplier represents a considerable amount of trust on the part of the buying firm. It’s the purchasing department’s job to ensure that trust is invested wisely, not squandered on the unworthy. Therefore, purchasing is obliged to be the organization’s eyes and ears within the supplier environment.

Krystle Morrison’s picture

By: Krystle Morrison

From carrying food in from the field, to shipping processed products, to assembling a supermarket display, packaging matters. As a follow-up to our exploration of emerging trends in food packaging, we’re taking a look at several innovative technologies that could change the future of packaging.

The search for sustainability

More than half of consumers say that environmental sustainability is at least somewhat important to their purchasing decisions, and 41 percent of those shoppers look for recyclable packaging. To benefit the environment and ultimately please consumers with sustainability practices, food brands, startups, and researchers are discovering new ways to package products with recyclable, reusable, or biodegradable materials. 

Søren Block Olsen’s picture

By: Søren Block Olsen

Manufacturers face constant challenges of rising expectations as customers and regulators demand better quality and greater traceability throughout the supply chain. Exacerbating matters are unpredictable tariffs, which necessitate faster responses to changing trade barriers and regulatory requirements. These factors must all be accomplished at lower costs while coping with already thin margins.

The solutions to these challenges already exist within current systems. Unlocking the value of data already in systems generates actionable insights from quality control and quality assurance for operations and plant-floor management.

Improving the entire manufacturing process allows manufacturers to optimally monitor costs, remaining within a range of profitability. If data (i.e., business intelligence) show information outside the acceptable range, it can be quickly adjusted.

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