by Jennifer Hart Yim | May 21, 2015 | Blog, Strategy, Supply Chain
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
Lindsey Marley completed dual undergraduate degrees in Business and History at Southern New Hampshire University. She is in her final semester of the MBA program at the University of New Hampshire. In her free time she enjoys traveling, reading, and spending time with her husband and their two dogs.
On November 24, 2012 there was a deadly fire at a garment manufacturing company which killed 112 people in Dhaka, Bangladesh. Another manufacturing facility in Dhaka collapsed on April 24, 2013 killing 142 people. The ready-made garment manufacturing industry in Bangladesh has grown to $19 billion dollars and is reported to be one of the most unsafe industries in the world. The consequences of corporations being lax in the sourcing of their products can have horrific consequences for people, the environment, and the company. Consumers in developed countries are demanding companies be more responsible in their sourcing as a result of the wealth of information found on the Internet about the production of goods and services.
Responsible Sourcing
The concept of responsible sourcing is in itself still being developed; however, responsible sourcing generally consists of two parts – people and the environment. There are several organizations which have provided guidelines to assist companies in developing their own code of conduct including:
One such industry-specific coalition, which was created in response to numerous tragedies such as those described above, is the Alliance for Bangladesh Worker Safety which was founded in 2013 by a group of North American apparel companies and retailers.
Alliance: A Global Response
The Alliance created a binding five-year agreement to improve worker safety among the largest importing companies of Bangladesh garments. Some of the most well-known participants include Limited, Carter’s Inc, Fruit of the Loom, Gap Inc, Kohl’s Department Stores, LL Bean, Macy’s, Target Corporation, and Wal-Mart Stores, Inc. The Alliance is accomplishing its mission through the use of a collective fund which was $42 million at the time of its creation.
The International Labour Organization has assisted the Alliance in the creation of an operational guide. The Alliance focuses on opening lines of communication between employees and management to ensure worker safety. Interviews with employees regarding existing safety practices and training are conducted and then safety discussions are coordinated between those employees and members of management. The Alliance also requires assessments be completed of garment manufacturing plants by independent engineers to certify worker safety and the structural soundness of facilities. After the initial evaluation and recommendations, the independent auditors return to confirm the changes previously discussed have been made as well as to assess the manufacturer’s ongoing compliance.
Had the Alliance been in place prior to the fire in 2012 the auditors would have found the illegally stored mounds of fabric and yarn, which accelerated the spread of flames, and required the materials to be stored in a more appropriate and safe manner. Another aspect of the fatal fire which could have been prevented was the allegation of factory managers directing employees to ignore the fire alarm. This wasted precious time for workers to exit the building safely. Ultimately, this lead many employees, trapped by the flames and smoke, to jump from upper floors to the rooftops of surrounding buildings or to their deaths. The tripartisan relationship that is created between the Alliance, employees, and management representatives is critical to ensure a clear, consistent message regarding basic employee safety. This communication helps to empower workers and could have encouraged them to challenge management’s direction to disregard the alarm when the fire broke out.
With regard to the building collapse of 2013, it was determined the four upper floors had been constructed illegally without permits. The three pronged scope of the Alliance (worker safety, fire safety, and structural soundness) again could have prevented this tragedy. In this situation, management at the garment manufacturing facility were aware of structural concerns before the collapse, but as in the case of the fire, ignored the risk and kept the factory open. Engineers working for the Alliance drill into factory walls to determine the structural integrity of the concrete and rebar used during construction to determine structural soundness.
Your Span of Control
These examples highlight the importance of maintaining a large span of control throughout your supply chain to ensure responsible sourcing. It is no small task to exercise this breadth of control for any company; however, companies can utilize the resources provided by the organizations listed above to develop their own requirements for responsible sourcing and supplier relationships. Companies can derive the maximum consumer exposure by enforcing responsible sourcing across their entire supply chain. It is also important to engrain this behavior into the culture particularly among employees who have the most interactions with the ultimate consumer.
Communicating to Your Customers
Consumer communication is the final piece of the responsible sourcing puzzle which brings together the voluntarily socially responsible company with their expecting consumer base. Responsible sourcing without informing consumers is a waste of good public relations. Many companies bury the information about their responsible sourcing efforts on the corporate website where consumers have to hunt for the information. Some coalitions and third party companies provide the insignia to compliant participants as a means of notifying consumers of their membership, but that is not always an option. If possible, a company’s commitment to responsible sourcing should be quickly and clearly communicated on its product packaging, in its digital footprint, and in the way it conducts and manages its supply chain.
The fast food giant Chipotle consistently communicates its commitment to responsibly sourced ingredients in its signage, website, commercials, and in its direct to consumer communications at the individual locations. The pervasive nature of the company’s responsible sourcing efforts has been strongly rewarded by its ever-growing customer base. In a time where consumers are switching brands to support socially responsible companies, it is imperative to keep a company’s responsible sourcing objectives, actions, and accomplishments at the forefront of consumer’s minds.
by Jennifer Hart Yim | May 20, 2015 | Blog, Manufacturing & Distribution, Strategy, Supply Chain, Warehousing & Materials Handling
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
David Chadwick is an MBA student at the University of New Hampshire with a background in retail store management and electrical engineering.
If technology continues to advance, humans may be obsolete in the supply chain as a result of both automation and RFID utilization. Both technologies have been introduced into the supply chain over the past decade, resulting in a major shift in performance and costs. While automation is a process which can navigate product throughout facilities, RFID can improve efficiency dramatically as well as being the major driver for the elimination of human involvement in the supply chain.
RFID (Radio Frequency Identification) is a form of extremely low-power data communication between a RFID scanner and an RFID tag. The tags are placed on any number of items, ranging from individual parts to shipping labels. The RFID tag itself consists of a microchip and antennae, usually without a battery to power it. The tags can be printed using special printers, which wirelessly load the identifying information to the tags. The information on the tags can be used for a wide variety of tasks. When an item goes through the RFID scanners, information is read from the tag, which could include any amount of information, such as:
- Order ID number
- Product bin location
- Order status
- Serial numbers for individual product components
- Location logs
The information is not limited to just holding ID and serial numbers. Since the information can be updated and transferred through any RFID receiver when in range, it can be joined with other software to update databases, send information online, and more. The amount of information that RFID can provide can be matched with order management systems to track shipment and stock locations automatically as the products move through warehouses and trucks. Powerful receivers can also track the exact location of products within a warehouse in real time, instead of relying on time and location logs to determine the location. This has been a major benefit to UPS, who’ve had RFID tracking chips in their warehouses for over ten years.
The largest problem facing supply chain management today is the potential for the occurrence of devastating errors. These errors could lead to trucks leaving product behind, not stocking to capacity, losing product, or delivering to the wrong locations. There are numerous reasons for such errors to occur, but the most common factor in their inception is human error. Much of the errors faced result from manual inspection and control over product flow in warehouses by humans. Many systems still operate using written data tables and checklists, which can be written incorrectly. Despite major advancements in technology over the past decade, the digital world is being sourced by analog supply chains. This is an aspect which RFID control can create beneficial change.
RFID can lead to completely autonomous warehouses and distribution centers. This can be seen in current warehouses with high levels of automation, where picking machines transport bins of product to a central sorting area to be boxed, before returning to their location. Zebra uses this technique to ensure product location accuracy as a means of reducing lost merchandise. Zebra places a great deal of importance on product visibility and transparency as well as accuracy in locations. Implementation of RFID into this system can ensure that both the correct product and the correct quantities of product are collected at both points, thereby eliminating errors seen in traditional analog supply networks. Coupled with the potential for self-driving trucks and the ever expanding internet of things in the cloud, product information can be tracked at all stages of shipment and storage, increasing accuracy, efficiency, and accountability. Where warehouses and receiving departments had to endure a certain amount of shrinkage of products in the past, a fully utilized RFID-enabled supply network can determine exactly where product is at all times, ensuring that theft is discovered immediately and enforced.
While the reduction of human interaction in the supply chain and warehouses in general can be eliminated with enough technology, it is uncertain to what degree this technology will be implemented in all aspects of supply chain management. While there are huge benefits to operating in such a system, the major negatives include high initial costs and restructuring costs associated with implementing this network into existing, analog networks. Humanity may not be completely removed from the supply chain in the future, but this technology, as well as more advanced techniques for automation, will increase the efficiency and reduce the costs required to operate these newer supply chains dramatically while significantly reducing errors and inefficiencies.
by Jennifer Hart Yim | May 20, 2015 | Blog, Manufacturing & Distribution, Strategy, Supply Chain, Warehousing & Materials Handling
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
David Chadwick is an MBA student at the University of New Hampshire with a background in retail store management and electrical engineering.
If technology continues to advance, humans may be obsolete in the supply chain as a result of both automation and RFID utilization. Both technologies have been introduced into the supply chain over the past decade, resulting in a major shift in performance and costs. While automation is a process which can navigate product throughout facilities, RFID can improve efficiency dramatically as well as being the major driver for the elimination of human involvement in the supply chain.
RFID (Radio Frequency Identification) is a form of extremely low-power data communication between a RFID scanner and an RFID tag. The tags are placed on any number of items, ranging from individual parts to shipping labels. The RFID tag itself consists of a microchip and antennae, usually without a battery to power it. The tags can be printed using special printers, which wirelessly load the identifying information to the tags. The information on the tags can be used for a wide variety of tasks. When an item goes through the RFID scanners, information is read from the tag, which could include any amount of information, such as:
- Order ID number
- Product bin location
- Order status
- Serial numbers for individual product components
- Location logs
The information is not limited to just holding ID and serial numbers. Since the information can be updated and transferred through any RFID receiver when in range, it can be joined with other software to update databases, send information online, and more. The amount of information that RFID can provide can be matched with order management systems to track shipment and stock locations automatically as the products move through warehouses and trucks. Powerful receivers can also track the exact location of products within a warehouse in real time, instead of relying on time and location logs to determine the location. This has been a major benefit to UPS, who’ve had RFID tracking chips in their warehouses for over ten years.
The largest problem facing supply chain management today is the potential for the occurrence of devastating errors. These errors could lead to trucks leaving product behind, not stocking to capacity, losing product, or delivering to the wrong locations. There are numerous reasons for such errors to occur, but the most common factor in their inception is human error. Much of the errors faced result from manual inspection and control over product flow in warehouses by humans. Many systems still operate using written data tables and checklists, which can be written incorrectly. Despite major advancements in technology over the past decade, the digital world is being sourced by analog supply chains. This is an aspect which RFID control can create beneficial change.
RFID can lead to completely autonomous warehouses and distribution centers. This can be seen in current warehouses with high levels of automation, where picking machines transport bins of product to a central sorting area to be boxed, before returning to their location. Zebra uses this technique to ensure product location accuracy as a means of reducing lost merchandise. Zebra places a great deal of importance on product visibility and transparency as well as accuracy in locations. Implementation of RFID into this system can ensure that both the correct product and the correct quantities of product are collected at both points, thereby eliminating errors seen in traditional analog supply networks. Coupled with the potential for self-driving trucks and the ever expanding internet of things in the cloud, product information can be tracked at all stages of shipment and storage, increasing accuracy, efficiency, and accountability. Where warehouses and receiving departments had to endure a certain amount of shrinkage of products in the past, a fully utilized RFID-enabled supply network can determine exactly where product is at all times, ensuring that theft is discovered immediately and enforced.
While the reduction of human interaction in the supply chain and warehouses in general can be eliminated with enough technology, it is uncertain to what degree this technology will be implemented in all aspects of supply chain management. While there are huge benefits to operating in such a system, the major negatives include high initial costs and restructuring costs associated with implementing this network into existing, analog networks. Humanity may not be completely removed from the supply chain in the future, but this technology, as well as more advanced techniques for automation, will increase the efficiency and reduce the costs required to operate these newer supply chains dramatically while significantly reducing errors and inefficiencies.
by Jennifer Hart Yim | May 19, 2015 | Blog, Logistics, Strategy, Supply Chain
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
Nicole Brooks is an MBA candidate at the University of New Hampshire.
Amazon keeps on innovating.
Just when you think that Amazon offers it all, they keep surprising their customers with more unbelievable plans and ideas to better improve our lives. With a mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices,” Amazon continues to be innovative in an effort towards a bright future. For example, Amazon was an industry leader with the introduction of 1-day shipping, shifting consumers to expect this new luxury as the standard.
In the previous three year’s first quarter financial statements, the company has experienced a decrease in their growth rate: approximately 30% during the first quarter three years ago and down to 20% in the first quarter of last year. This has pushed Amazon to begin considering alternative paths of business if they want to continue experiencing growth. As such, they have started to diverge into the services industry and have developed a platform that is used to match buyers and sellers for essentially all types of goods.
Amazon’s latest innovations include but are not limited to:
Kiva Robots
For the 2014 holiday season, Amazon put their new Kiva robots to work. Over 15,000 were placed inside the US fulfillment centers to “make operations more efficient” during the expected high volume holiday rush. They essentially eliminated the need for people to walk through the aisles to collect the necessary items for a shipment. The Kiva robots are programmed to know the placement of items within the shelving system and bring forth the shelf with the next needed item for the packers. The company’s forward looking decisions are based on Amazon’s future vision for what the industry leader could do next to make itself stand out.
Drones
Despite being turned down by the U.S. Federal Aviation Administration (FAA) in the early months of 2015, Amazon still fully intends to be able to deliver packages to customers utilizing their developed and tested drone technology. The video that can be viewed through the Amazon Prime Air webpage provides customers with an idea of what the drone would look like and what the process would be from the order being received at the warehouse to the package being delivered to someone’s doorstep.
Amazon has named this drone delivery service “Prime Air”. Prime Air has the goal and potentially the capability to offer customers 30 minute delivery. Yes, within a 30 minute time span from receiving an order Amazon wants to process it and be able to deliver those items. Of course, there would be a high premium associated with this, but it would minimize the need for companies to have to make purchases ahead of time, which for small companies, could be very beneficial for their bottom line. Currently, drones are being tested and allowed commercially in Canada as well as a handful of European countries. In Canada, for example, drones are only subject to be used when it is light outside, the weather is good, and the controller can keep the drone in his/her sight.
Amazon Home Services
Amazon formally introduced the Home Services platform to their website last month. This platform essentially is set up in the same manner as their goods and products platform, however instead of being shipped a product at the end, the customer is booking a service, such as plumbers, electricians, TV installation services, etc. This platform allows customers to look at the various offerings and to more easily compare different businesses and contractors based on the value that they perceive the service would ultimately be providing. The different home services, similar to a typical Amazon offering, will also have comments and rankings to help distinguish the variety of offerings.
Amazon Business
In light of the increasing “do-it-yourselfer” trend, Amazon has opened a distribution channel for those seeking high-tech electronic components and parts. In the past, these components would be bought directly through suppliers, authorized distributors, or various parts catalogs. Amazon, which caters to those who prefer to do their shopping online, has expanded their offerings with the Amazon Business platform. Consumers have the ability to create business accounts with multiple user access, set-up and utilize an approval system, and can qualify for free two-day shipping, among other benefits. With this specific addition, Amazon is expanding their platform to further cater to information technology and electronic industries, creating more of a reason for businesses to consider Amazon a one-stop shopping destination.
Amazon Destinations
Also recently announced, Amazon will begin offering an Amazon Destination platform for customers to quickly and easily be able to compare local hotels for a getaway. This is not yet currently available to customers, but once it is, similar to the offering above, will give shoppers an all-encompassing inside look at what the various hotels in the area have to offer as far as rate and amenities upfront.
The Future
At this stage, Amazon is a mature company with a well-developed online shopping platform coupled with industry-leading delivery and logistics offerings. Now with the expansions into service offerings, Amazon has proved that there is no limit to what they can do. Their steps have been logical and it only makes sense that they now spread their platform to consist of more things everyday consumers are looking for. We can already get any item imaginable through their website, why not any service. As the service offerings expand, it would not be a far stretch to say that in the coming years we will be able to plan weddings, book vacations around the world, and even possibly compare medical procedures through Amazon.com.
It’s difficult to accurately predict what Amazon will be doing fifteen years from now, but whatever they are doing, will mostly likely continue to shape consumer expectations and impact the surrounding business and consumer markets in ways we had not thought of beforehand.
by Jennifer Hart Yim | May 19, 2015 | Blog, Logistics, Strategy, Supply Chain
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
Nicole Brooks is an MBA candidate at the University of New Hampshire.
Amazon keeps on innovating.
Just when you think that Amazon offers it all, they keep surprising their customers with more unbelievable plans and ideas to better improve our lives. With a mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices,” Amazon continues to be innovative in an effort towards a bright future. For example, Amazon was an industry leader with the introduction of 1-day shipping, shifting consumers to expect this new luxury as the standard.
In the previous three year’s first quarter financial statements, the company has experienced a decrease in their growth rate: approximately 30% during the first quarter three years ago and down to 20% in the first quarter of last year. This has pushed Amazon to begin considering alternative paths of business if they want to continue experiencing growth. As such, they have started to diverge into the services industry and have developed a platform that is used to match buyers and sellers for essentially all types of goods.
Amazon’s latest innovations include but are not limited to:
Kiva Robots
For the 2014 holiday season, Amazon put their new Kiva robots to work. Over 15,000 were placed inside the US fulfillment centers to “make operations more efficient” during the expected high volume holiday rush. They essentially eliminated the need for people to walk through the aisles to collect the necessary items for a shipment. The Kiva robots are programmed to know the placement of items within the shelving system and bring forth the shelf with the next needed item for the packers. The company’s forward looking decisions are based on Amazon’s future vision for what the industry leader could do next to make itself stand out.
Drones
Despite being turned down by the U.S. Federal Aviation Administration (FAA) in the early months of 2015, Amazon still fully intends to be able to deliver packages to customers utilizing their developed and tested drone technology. The video that can be viewed through the Amazon Prime Air webpage provides customers with an idea of what the drone would look like and what the process would be from the order being received at the warehouse to the package being delivered to someone’s doorstep.
Amazon has named this drone delivery service “Prime Air”. Prime Air has the goal and potentially the capability to offer customers 30 minute delivery. Yes, within a 30 minute time span from receiving an order Amazon wants to process it and be able to deliver those items. Of course, there would be a high premium associated with this, but it would minimize the need for companies to have to make purchases ahead of time, which for small companies, could be very beneficial for their bottom line. Currently, drones are being tested and allowed commercially in Canada as well as a handful of European countries. In Canada, for example, drones are only subject to be used when it is light outside, the weather is good, and the controller can keep the drone in his/her sight.
Amazon Home Services
Amazon formally introduced the Home Services platform to their website last month. This platform essentially is set up in the same manner as their goods and products platform, however instead of being shipped a product at the end, the customer is booking a service, such as plumbers, electricians, TV installation services, etc. This platform allows customers to look at the various offerings and to more easily compare different businesses and contractors based on the value that they perceive the service would ultimately be providing. The different home services, similar to a typical Amazon offering, will also have comments and rankings to help distinguish the variety of offerings.
Amazon Business
In light of the increasing “do-it-yourselfer” trend, Amazon has opened a distribution channel for those seeking high-tech electronic components and parts. In the past, these components would be bought directly through suppliers, authorized distributors, or various parts catalogs. Amazon, which caters to those who prefer to do their shopping online, has expanded their offerings with the Amazon Business platform. Consumers have the ability to create business accounts with multiple user access, set-up and utilize an approval system, and can qualify for free two-day shipping, among other benefits. With this specific addition, Amazon is expanding their platform to further cater to information technology and electronic industries, creating more of a reason for businesses to consider Amazon a one-stop shopping destination.
Amazon Destinations
Also recently announced, Amazon will begin offering an Amazon Destination platform for customers to quickly and easily be able to compare local hotels for a getaway. This is not yet currently available to customers, but once it is, similar to the offering above, will give shoppers an all-encompassing inside look at what the various hotels in the area have to offer as far as rate and amenities upfront.
The Future
At this stage, Amazon is a mature company with a well-developed online shopping platform coupled with industry-leading delivery and logistics offerings. Now with the expansions into service offerings, Amazon has proved that there is no limit to what they can do. Their steps have been logical and it only makes sense that they now spread their platform to consist of more things everyday consumers are looking for. We can already get any item imaginable through their website, why not any service. As the service offerings expand, it would not be a far stretch to say that in the coming years we will be able to plan weddings, book vacations around the world, and even possibly compare medical procedures through Amazon.com.
It’s difficult to accurately predict what Amazon will be doing fifteen years from now, but whatever they are doing, will mostly likely continue to shape consumer expectations and impact the surrounding business and consumer markets in ways we had not thought of beforehand.
