Among 150 hotels, hospitals and universities, the University of Massachusetts Amherst is utilizing an innovative method to reduce food waste conjured by a company called LeanPath.
According to LeanPath, the issue of food waste is getting to be tremendously harmful for energy and water resources. Being the biggest source of waste in the United States, food waste accounts for $8 billion to $20 billion worth of waste annually. This is because about 4% to 10% of food bought is wasted rather than consumed.
What exactly is this waste? What LeanPath tracks is not exactly what we think of when we think of the term “food waste”. It is not the food our moms tell us to “finish because kids in Africa are starving”. The food waste that LeanPath targets is focused to tackle the root of the problem. It is the food that is wasted even before it reaches the plate. This can be anything from meat to vegetable trimmings. Imagine you are making mashed potatoes. How much of the potato are you really peeling? How much potato skin are you discarding? Leanpath can measure and put a dollar amount to all of these questions.
How does LeanPath help and what does it do exactly? Quite simply, LeanPath provides the means for establishments to track the food they are wasting. Employees can do this by weighing their waste on the scales provided by LeanPath. The employees enter in the type of food, size of container, type of meal and the reason it is being discarded in to the LeanPath machines. The machine then calculates the waste into a dollar amount using their special software. All of this would cost the establishment about 5,000 dollars. Though the software doesn’t provide the employees with solutions to reduce food waste, it provides them with useful charts and graphs that help the employees make these decisions. The employees and their managers then meet up once a month and brainstorm best practices to reduce the waste they are calculating on the LeanPath scales.
How effective has this been? Specifically, the University of Massachusetts Amherst has saved $300,000 dollars after it has started using LeanPath’s methods. I think that this is a great start to saving a lot of waste in the food industry. I do think LeanPath would be more effective if they gave practical solutions to reuse food that is intended to waste rather than giving facts and charts. With LeanPath’s program now, it looks like only the institutions that are most dedicated to sustainability will benefit from LeanPath’s products. This is why more commercial institutions like restaurants and food courts are not using LeanPath. Anyone can weigh the food waste but there needs to be an active desire to come up with solutions to reduce food waste in order to make this program more effective.
Can LeanPath eventually reach more commercial industries? Do you think it needs to alter its program to do so? If so, how?
More and more customers now are looking for companies to be transparent, but it’s kind of hard to be competitive and sustainable at the same time. Companies are now using value chain processes to get the job done fast. They are not only focusing on suppliers but also taking into account By-Product-Synergy, which is “taking waste from one part of the production process and using that waste in order to generate a new product.” But how can companies become more sustainable if only “80 percent of management uses just 20% of the available opportunities?!” The remaining 80 percent is where management needs to focus the rest of their energy.
It’s crucial for management to set goals and assess their risks, thereafter they can easily seek out opportunities for future improvement. The first step to become a transparent company is to implement a sustainability program, and of course to develop a strategy. The next step is to identify the companies “main processes and map data throughout the value chain.” By using life-cycle-assessment software, the companies will have a more clear idea of how to lower their costs.
A similar approach was taken by ThyssenKrupp (FWB: TKA), a German elevator company. Since ThyssenKrupp uses a considerable amount of steel in the manufacturing process, they thought the operational aspect had the greatest environmental impact. To their surprise, the “company’s elevators themselves left a greater carbon footprint then their manufacture or any of the company’s other operations.”
As a result, ThyssenKrupp dramatically changed their product line after implementing a sustainability program. They made the following changes to their products and services:
Elevators use LED lights which reduce energy consumption by 80%, and automatic fan and light shutoff which reduces CO2 emissions by 193,000 tons per year.
Getting rid of harmful chemicals used to manufacture the elevator.
Using petroleum based biodegradable fluid, with a vegetable-based option called “enviromax.”
Elevators are equipped with regenerative technology, meaning that the energy generated from the braking system is put back into the building.
In a way the article gives motivation to other companies who are taking their first steps towards becoming a transparent company. It gives them few ideas and pointers on “unlocking supply-chain opportunities.” It’s important for different industries to decipher various ways to be more environmental friendly. After all, there is more to being sustainable than just showing off your environmental initiatives.
Do you think ThyssenKrupp can take additional measures to make their company more sustainable? Or better yet, are there any companies that you want to see become transparent in the near future? How would they need to change there operations?
The HTC One, High Tech Computer Corporation’s leading phone is currently experiencing worldwide delays. As of April 24th, AT&T, Sprint, and T-Mobile are the sole wireless communications service providers that offer the cell phone for sale. Unfortunately, potential clients will be disappointed upon hearing that the phone will be delayed; potentially for several weeks. Originally the HTC One was scheduled to launch in mid-March, but supply issues have pushed back the release for over a month.
Over the prior year, HTC’s profits have dropped to a record low $2.83 million. This accounts for a 98% drop in profits. The HTC One is the paramount flagship model and in order to turn around the company, it must sell well. In March alone, HTC moved only 300,000 phones to nationwide retailers in three countries as supply bottleneck issues arose. HTC indicated a shortage of camera components as the problem responsible for the mass delays. By the end of April, J.P. Morgan Securities’ supply chain checks forecast 1.2 million phones shipping as well as 2.0 million in May.
Oddly enough, the main competitor of the HTC One, the Samsung Galaxy S4, will also be delayed until April 29th on T-Mobile. The Galaxy S4 will be launching on six carriers, however only T-Mobile has set a definitive launch date. In order to cope with the anticipated sales forecasts, Samsung is currently producing 10 million units monthly. T-Mobile will likely be the first carrier to launch with the Galaxy S4 but is already experiencing delays before pre-ordering is available. Once the five other carriers set their release dates, demand will go up and Samsung may not have enough available phones for the amount demanded.
Anticipated sales forecasts generated for both HTC and Samsung may not be realistic over the next several months as both corporations are struggling to produce enough inventory for the demand. This, however, brings up a question of quality. If HTC and Samsung are rushing to mass produce these phones to clear the backorders, will the quality of the phones suffer, or will crashing methods have to be implemented to speed up project length?
In our class we discussed bottleneck situations and how that may jeopardize the timeliness of the process but this article also brings up forecasting models. Unfortunately forecasts are just predictions. When unanticipated situations arise, these forecasts may not be accurate; as exemplified in HTC’s case. Stock markets also rely heavily on forecasts, thus a company may decrease or increase in value today pertaining an act that will be committed in the future. Only time will tell how long consumers will have to wait for their phones as both companies are working relentlessly to produce more phones.
Do you believe that HTC and Samsung should have prepared better for this problem and stockpiled phones ahead of time to avoid this situation?
Which company do you feel will tackle this issue most effectively?
Due to the poor economy, the oil industry is having a rough time enduring transportation costs from country to country. For decades, oil tankers have been the main source of transportation, carrying up to two million barrels of oil between the Middle East, Asia, and the United States. Unfortunately for the oil tanking business, operation costs over the past few years have been much more expensive than they have been in the past. This increase in price makes the shipping of the popular and much demanded natural resource nearly impossible and not worth it. Unlike what is usually the case, globalization in this situation for example is more costly to this particular industry than it would be to drill into our own soil. The only problem is that we find a larger supply of oil in foreign countries than we do our own.
To get an idea of how much this is costing the oil firms, analysts look at the forecasts from previous years. This collection of data has shown that the industry has lost more than $26 billion dollars in the past four years, and operation costs are higher than ever. To operate one of these extremely large vessels, it costs anywhere from ten to twelve thousand dollars per day. In 2007, operation costs peaked at $309,601 per day. That is unbelievable! Because these carriers are only making roughly $7,000 a day, there is a huge deficit. While such oil companies continue to lose so much money daily, they cannot possibly stay in business. The supply chain is not working in favor of firms; therefore, sustainability of the business comes into question. So what should these oil tanking firms do? How can they cut costs? Is it possible to adjust the supply chain or is it a lost cause?
I think that at such a loss like this, the amount of ships in operation should decrease drastically, causing less expenses to be paid. That is the only way they can keep their heads above water, although they are already sinking in debt. New York’s Overseas Shipholding Group filed for bankruptcy last year, and I am sure they will not be the last to do so. I feel for these dying companies because many of them entered into contracts before the economic crisis occurred, and now they are stuck in a failing industry, losing more than they gained from the contracts to begin with.
Other possible options for consumers that effect the oil firms is innovation. It is not uncommon to see on TV or read in the newspaper alternatives to oil resources. At the Chicago Auto Show every year, concept cars are on display that use battery powered systems to replace oil. These are more cost efficient and do not require the use of oil tankers. What do you think will be the result of the oil industry failing? How do you think consumers should react to this? How do you think the government should react to this?
Fuel consumption represents nearly 37% of average per-mile trucking costs. In today’s time, with the advancement of technology, more and more companies are tapping in to technologies that allow for better risk management to improve efficiency and lower the risk of avoidable scenarios that were once considered “the cost of doing business.” Many large companies such as Procter & Gamble and Whirpool have begun working with companies such as Breakthrough Fuel, which work with many shippers across the country to help provide strategy on fuel management.
Clients using Breakthrough Fuel’s model only pay actual fuel costs for particular routes on particular days, this allows for a savings on fuel consumption. Breakthrough Fuel also has multiple locations from which a manufacturer can ship from which allows manufacturers to ship based on distance from their destination or the cheapest trucking costs. To help aid in the transfer of shipments, there has been mass improvements to inventory tracking such as with the use of radio frequency identification (RFID) technology.
With the use of RFID technology and GPS, shippers can know exactly where a certain item is within a container. This use of RFID chips helps alleviate errors in packaging and shipping such as when working with
parts for bigger items. Think about a time where you will be able to place all of your groceries in a shopping cart at the supermarket and as you walk out, an RFID scanner will automatically scan all your groceries for you and display a price for each item without the hassle of you having to wait in line. With the use of RFID technology I really believe that soon that is how our shopping will be. What do you think are some other good uses for RFID technology?
Firms that ship in less-than-truckload (LTL) amounts need to make sure that they are shipping goods quickly in order to meet the high demand from their customers. This idea of using LTL services provides shippers a way to send out shipments more quickly but at a higher price. With the use of RFID technology, a shipper can carry multiple loads from different companies and be able to manage and control where each individual package gets delivered. Say Walgreens and Dominick’s both need a certain brand of product, the manufacturer can use a logistics management company such as MIQ Logistics to make sure that their product gets to both Walgreens and Dominick’s stores in a certain location with the help of RFID chips to track and monitor the packages. Certain transportation companies even provide their drivers with mobile devices to manage the inventory within their truck. Shippers are working on delivering shipments damage free, within a reasonable amount of time, and with confidence that their shipment will arrive in the right location when needed.
What can you see as the advantages or drawbacks to using the LTL technology described above? Do you see any ways of improving this system?
“Science Comes To Shipping.” Fortune Magazine 8 Apr. 2013: S1-S4. Print. (Also available here: http://www.timeincnewsgroupcustompub.com/sections/130408_Freight.pdf)
Strategic Alliances between Video Game Developers and Media Firms
By: Brett Halan
So basically the situation at hand is that media companies like Disney are starting to develop their own video games rather than export the development. The skill to develop and program games was once extremely rare and difficult to learn. Today it is being taught by more and more universities, and the skill is more widespread. Companies like Disney and PIXAR have a strategic alliance to create games like Toy Story and many others. They still do have an alliance, but Disney is experimenting by creating their own methods to creating games. Other media companies are following their lead as well.
These companies originally make a film that is later turned into a video game. Toy Story is an example of this process. The problem is that as of lately the video games that are extracted from original movies are not successful whatsoever. Disney and the others had to ask themselves why? They concluded that the quality of the games is terrible. The video game developing companies spend much of their effort working on original pieces of work like Halo or Call of Duty that attract the largest consumer base. They spend little time on these movies turned video games because they are historically weak sellers. The quote “quality is subjective, and perception is reality” pertains directly to this situation. The only real person who can claim that one game has more quality over the other are the end consumers. The media companies and the developing firms are essentially making the same mistake over and over again, and they need to accept change.
To fix the lack of quality going into the games there are a few alternatives. The most popular is that the media firms are buying smaller video game development companies. They are expanding in a way to give them a higher amount of control over the end product. As we saw in class during the ball passing game, when you have control over the process and design the end result is improved. Another alternative could include simply end making video games based off movies.
Overall, the consumers of the big box office movies seem to really enjoy the movies, so why are the video games not popular? Media firms blame the video game developers for not putting maximum effort into the games. There are a few questions we should consider. The first is how do the media firms go forward with improving the transcendent definition of quality of these games? The second question is how are the video game developers going to stay in business with their strategically aligned partners?
Even though the information for this post is from 2008 the information is still relevant for today. I imagine we will see less and less video games based off of movies in the meantime. Further down the road I imagine some movies will have a more advanced feature where you can control the action similar to a video game. Today they have alternative endings to movies, but I think that is just the beginning of interaction with the audience.
M. Marr and N Wingfield (2008). “Big Media companies want back in the game.” The Wall Street Journal, February 19, 2008.
C. Salter (2002). “Playing to Win.” Fast Company. December. Pg. 80.
When compared to major corporations, small businesses have it rough. They don’t have the staff, resources, or logistical capabilities of larger companies. Imagine, then, the nightmare that so many small business owners awoke to after Hurricane Sandy devastated the East Coast. It’s for this reason that I’ve decided to discuss small businesses and the logistical difficulties they are facing after Hurricane Sandy – especially in regard to their supply chains. The following New York Times article is one of the few I found that exposed the grim reality so many small businesses will face in the coming months. Below is a synopsis.
The article begins with a story that perfectly illustrates the dire circumstances so many business owners found themselves in after Hurricane Sandy passed through the East Coast. Kristy Hadeka and Sean Tice – co-owners of Brooklyn Slate Company, a company that produces slate cheese boards – had been preparing for the holiday season when Sandy hit. As a small business, the company depends on the revenue generated during this time of the year. According to the article, holiday sales typically make up 75% of the company’s annual revenue. Instead, they found themselves dealing with a litany of other issues – a depleted staff, damaged inventory, halted UPS shipments, and even customer emails requesting arrival times for orders. Kristy and Sean even had to locate missing merchandise that was being transported to a Whole Foods store in Massachusetts.
Another small business, Linda the Bra Lady, had a similar experience. While the company did not experience any physical damage, co-founder Carl Manni explained that they did suffer financially as a result of the storm. Manni explained that due to damage sustained to several of his vendors’ warehouses, he was unable to procure the inventory he needed to fill online orders. He consequently had to back out of the orders – a decision that will cost him approximately $50,000 for this week alone.
Outside of lost inventory and stifled supply chains, the looming issue is that many of these business owners did not have insurance that covered a disaster of this nature. Consequently, many small businesses will have to file for bankruptcy if they do not receive disaster relief funds from the government.
Ultimately, I feel that small businesses have a much harder time dealing with catastrophes of this nature. Whereas large retailers can reroute their supply chain or reorganize resources to soften the punch Sandy packed, small businesses do not have the necessary resources to reroute orders or replace inventory – especially given the current state of the economy.
* The information provided in this post was drawn from the following New York Times article:
Hurricane Sandy in the East Coast resulted in roads to be closed and shortages of gasoline and groceries in some areas of New York and New Jersey. The damages cost approximately $50 billion. Moreover, the storm also impacted the supply chain of products, which can determine success or failure of retailers during the upcoming holiday shopping season.
A high transparency of supply chain management system from procurement to warehouse to transportation is very important, for the reason that it allows businesses to quickly respond to the unexpected or disaster. According to The New York Times, before the Hurricane Sandy, economists expected 1-2 percent growth of the fourth quarter. After Sandy, they expect that the growth will be reduced by half a percentage point, and this may cause “ripples throughout the holiday season” (Knotts).
However, the storm is no longer an outlier of the supply chain disruption it caused based on a study by the Business Continuity Institute. This is because 85 percent of respondents worldwide experienced at least one disruption mainly associated with weather. The disruption becomes worse and worse “with the increase in megastroms worldwide and the growing complexity of international supply chains and E-procurement” (Knotts).
It is interesting that one third of the respondents do not know where disruptions occur due to the fact that the full supply chain is not being analyzed. A half of respondents said productivity is decreased due to the disruption, and a third said that they lost revenue. Fortunately, automating command and controlling of supply chains can mitigate losses.
The following lists are what companies need to take into account to create an effective supply chain management.
Inventory: Businesses need to focus on stock quantity, location, shelf life and expiration, which will help businesses avoid costly mistakes.
Asset: Businesses can use software to “accurately account for all assets across each facility from procurement to retirement with real time data available anywhere you have access to a browser or mobile device” (Knotts).
Transportation: Transportation process should be automated including route planning and status notifications.
Work orders: Businesses can use software to track all details of goods and services. Good work orders help businesses enforce accountability, timely response and work quality.
Warehouse management: It should be automated for full transparency. By using software, it helps businesses “map the warehouse for maximum storage effectiveness and schedule enough workers to receive shipments, among many other capabilities” (Knotts).
This article relates to supply chain management topic from our class lecture. As we know, supply chain management is very important in today’s competitive market place since competition is among supply chains not companies. Therefore, it is crucial that companies have a good understanding and manage their supply chains effectively to avoid risks and costly mistakes that may happen.
What other factors other than those listed above do you think that companies should consider when it comes to effective supply chain management?
The iPhone may have some actual competiton now. According to BusinessWeek, in the third quarter of this year, Samsung Galaxy III has outsold the iPhone by 1.8 million during this 3-month period when comparing shipment orders to sales of the iPhone. Samsung has been the only smartphone even close to competing with Apple since the iPhone’s inception. We have recently been talking about supply chain management and this could be why Samsung has such an edge up compared to other smartphone manufactures. As we learned in class, companies are not competing against each other, rather by their supply chain. Samsung is able to produce its own chip, flash memory for internal storage and Super Amoled handset displays. They are the only smartphone manufactures who do this, while Apple designs their chips and then hands it off to someone else to manufacturer them. They also outsource their production of the actual phone to factories in China. Apple’s supply chain process has been working will for them which are why they are ahead of their competition besides all of the features of the phone. Samsung is closely following Apple’s supply chain model by controlling what they can as much as possible. Samsung has also recently been sued by Apple for imitation of their phone. Do you think they will eventually be able to have a leg up on Apple do to their supply chain model? Or are they a top competitor because their phone is so closely imitated to the iPhone?
Last week, my family and I went to Red Lobster for dinner. I was struck at how efficient they were with everyone playing a different role in the restaurant. I noticed that after every order the servers would go to a computer section to input in the orders at the different tables. I have never given it much thought, but I realized then that that was how the restaurant uses to keep track of its inventories (food or drinks). My sister ordered a lobster, which she asked the server if she could pick it. This got me thinking that the restaurant needed to have an excellent inventory management system and supply chain in order to keep up with orders such as my little sister (you cannot have lobster fresh all year round–and live ones too). So what keep Red Lobster going?
Red lobster is one of the chains of the largest casual-dining company, Darden Restaurants Inc. (“Darden”), in the United States. In the article, the management team at Darden is working to continue its competitive advantage by implementing an automation system on the supply chain. I don’t know how extensive this system is, but Darden believes that the benefits will justify the cost for it. And I think they have a reason to be since they have been an innovator in its industry by having a competitive in its supply chain. The article also mentions that Darden has plans to open a lobster farm in Malaysia among its fish farms throughout the world. This would mean that the company would have more control on the quantity as well as the quality of the lobsters coming in to its restaurants. Furthermore, with the inventory management system at its restaurants, the company would be able to measure how much inventory (food like fishes or lobsters) to each location just as demanded.
Questions to consider: Have you ever been to one of Darden’s chain restaurants? How do you feel? Does the supply chain system that Darden has in place surprise you? How do you feel about Darden being the “McDonald’s” in casual dining? Does Darden have a comparative advantage over its competitors? How so?