This article “Vast underground bomb shelter reappropriated by urban farmers” (Wired.com, February 11, 2014), describes an innovative new “farm” located 100 feet below ground in southwest London. Zero Carbon Food uses a World War II bomb shelter designed to hold 8000 people. Fortunately it has not been needed since WWII and it has laid dormant — until now that is. A couple of entrepreneurs are growing broccoli, pak choi, and more using hydroponic growing techniques. One of the benefits — low shipping costs (something to talk about when you cover logistics) — and certainly appeals to the environmentally conscious segment of the market. We thought that our students would also find this interesting, so this was also posted at Learn the 4 Ps.
An important channel of distribution, that students may not think about much, brings food from fields and farms to restaurants, schools, and other institutional outlets where consumer chow down. The biggest players in the food-service supply chain include distributors like Sysco and US Foods. This article from the Wall Street Journal “Restaurants Fear New Food Giant’s Clout” (January 6, 2014, non-subscribers click here) describes issues around the proposed merger. Combined, the two firms will have the power to extract better deals from suppliers and higher prices from its customers. While that strikes fear into the hearts of restaurants, Sysco says that the larger size will allow it to cut costs.
The article allows you to discuss power and dependence in channels of distribution. Sysco is a powerful wholesaler — maybe getting more powerful. This could be used when you cover organizational buying, Place or Price. The logistics chapter in our textbooks includes an extended example of Sysco and its operations.
On the TV show 60 Minutes Amazon’s Jeff Bezos suggested that the retail giant may soon send a drone to your home with your latest purchase. Amazon calls the concept Prime Air and insists that they are serious about it. Of course the FAA might have something to say about that. You can read more about Amazon’s plan in this article from the New York Times “Amazon Floats the Notion of Delivery Drones” (December 1, 2013).
This video might be fun to show as a potential future transportation mode when you cover logistics and supply chain management.
Following a fire last fall and more recently a building collapse in Bangladesh, a brighter light has been shining on the clothing supply chain. A recent New York Times article “Linking Factories to the Malls, Middleman Pushes Low Costs,” (August 7, 2013) offers some insights into Li & Fung a major player in this supply chain. Li & Fung represents a supply chain link that I was not aware of, although they clearly play a very important role.
The article goes into considerable detail — and suggests positive and negative influences of Li & Fung. Consequently, it might make an interesting reading assignment and in-class discussion. For example, it is not clear if Li & Fung is responsible for more (or fewer) sweatshop disasters. Arguments can be made on both sides. The article also highlights the complexity of this supply chain — and the power and influence and unique benefits that Li & Fung offers. This article could be used when you cover organizational buying, Place, and/or social responsibility.
One of online retail giant Amazon’s competitive advantages compared to its brick-and-mortar counterparts comes from the fact that its customers don’t pay sales tax. So why is Amazon supporting the collection of online sales tax (see “Amazon Splits With Peers in Pushing Online Sales Taxes,” Bloomberg Businessweek, August 1, 2012)? Perhaps Amazon figured it was inevitable and it needed to move forward with its next big move –same-day delivery. Amazon has put lockers in 7-Eleven stores — which might also facilitate the inevitable logistics challenges, “Amazon’s Lockers Move Front Line of Retail War to the Back of 7-Eleven” (Wired, August 8, 2012). . This might be the ultimate way for Amazon to dominate retail — learn more at “I Want It Today,” (Slate, July 11, 2012).
The articles keep you up to date with Amazon’s strategy and the battle between online retail and brick-and-mortar stores. It is also gives you an interesting discussion topic for channels of distribution and logistics, with a demonstration of how Amazon continues to leverage and build on its strengths to create competitive advantage.