性视界

For me, your article draws an interesting parallel to one of our marketing classes this semester, where we discussed how Gap is using big data to predict consumer tastes. [1] In that case, GAP CEO Art Peck 鈥渋nvested heavily in digital capabilities to address consumers鈥� shift to omni-channel shopping, focusing on dissolving the wall between the physical and digital channels.鈥� As your article discusses, H&M is similarly focused on building its digital infrastructure and omni-channel strategy.

I think you raise a very interesting question about how much of a role 鈥渃reatives鈥� will play in the future of fashion in an industry where the supply chain is becoming increasingly digital. I think data analytics play an important role in uncovering past trends and behaviors. However, for a fast-fashion company like H&M, I don鈥檛 think the role of a creative director could ever entirely be replaced by predictive analytics. Consumers often do not know what appeals to them until they see it in a store 鈥� thus how can you predict what their preferences will be? The role of creative directors is to tell them what is 鈥渋n style鈥� for the current season, therefore generating demand for that particular style. I think H&M should continue to rely on creative directors to select its fast-fashion products, but can supplement the 鈥済ut-driven鈥� decisions of the creative directors with historical purchasing data and other analytics.

[1] Israeli, Ayelet, and Jill Avery. “Predicting Consumer Tastes with Big Data at Gap.” 性视界 Business School Case 517-115, May 2017. (Revised July 2017.)

This article and subsequent responses highlight fascinating predictions on how Brexit might impact Tesco鈥檚 supply chain. Wholesalers are attempting to pass through significant price increases to Tesco. As this article discusses, in the near-term, Tesco is leveraging its scale and buying power to push back against 鈥渦nruly wholesaler demands鈥�. But in the long-term, would Tesco have enough leverage to mitigate rising food costs by bypassing wholesalers entirely? By decreasing the 鈥渓ength鈥� of the supply chain, Tesco could realize cost benefits that enable them to minimize price increases to end consumers, while still maintaining quality products. This action could put them at a significant competitive advantage to other grocers who may be more reliant on wholesalers and therefore forced to raise their prices. Would such a drastic change to the supply chain be possible?

This article also brings to mind a separate but related question: how will Brexit鈥檚 threat to the food supply chain impact restaurants? According to an article in The Independent, 鈥渢housands of UK restaurants could be at risk of going out of business as鈥�the Bexit vote raises costs for imported food and threatens to squeeze consumer spending鈥�. [1] Not only would restaurants be hit with the rising costs of food, but demand is also likely to fall as consumers are forced to spend more on their own groceries and are therefore less likely to eat out.

Sources:
Zlata Rodionova, 鈥淏rexit: Over 5,500 restaurants at risk of closing down鈥�, The Independent, December 5, 2016, , accessed November 2017.

I agree with Francie that your first question (on whether more manufacturing jobs or lower cost vehicles are better for Americans) is exceptionally interesting, and merits further discussion. The answer is at the nexus of tends in digitization and isolationism. As many of the articles in the 鈥淭OM Challenge鈥� discuss, digitization is transforming supply chains and automation is negating the need for human involvement in many areas of the production process. Tesla, for example, is very focused on increasing automation in its factories, and recently purchased a process automation firm, Grohmann Engineering. [1] If manufacturing processes become increasingly automated, significant up-front capital expenditure will be required, but costs will ultimately be driven down over time. Given this trend, in order for Ford to move more factories within the U.S. to avoid risks associated with changes to NAFTA, it would have to believe that Americans would value cheaper cars over more manufacturing jobs.

However, I do not believe that 100% automation will be fully realized in the short- to medium-term. The last major change to car manufacturing was the invention and implementation of the Toyota Production System (TPS) that we studied in class, which has been adopted (in whole or in part) by most major auto manufacturers over the course of several decades. [1] I think a fully automated production process may take a similarly long period to be so widely adopted.

Therefore, Ford will need to weigh the probabilities of outcomes of NAFTA negotiations against that of the realization of fully automated production processes as it decides where to locate its future manufacturing plants.

Sources:
[1] Matthew DeBord, 鈥淭esla’s future is completely inhuman 鈥� and we shouldn’t be surprised鈥�, Business Insider, May 20, 2017, , accessed November 2017.

The statistics on the increase of natural disasters in recent years are truly striking. Having organized fundraisers for the Red Cross in response to past natural disasters, such as the devastating 2010 earthquake that struck Haiti and caused over 300,000 deaths, I am a big believer in the value that the Red Cross provides in saving lives. [1]

Unfortunately, people are much more apt to donate reactively than proactively. The article indicates that 鈥渕ore than five times as much funding is spent on disaster response than disaster risk reduction.鈥� It is much easier for people to give money to help with relief of a disaster that has already occurred than give money to a disaster that might occur in the future. Forecast-based financing presents a tremendous opportunity for funding pre-emptive relief efforts, as this article discusses in detail. But I would argue that these predictive algorithms could be better used to trigger evacuations of regions anticipating natural disasters, similar to mandatory evacuations imposed in the U.S. immediately preceding the landfall of hurricanes. I think these tools used in combination (to preemptively deliver relief supplies and to sound evacuation alarms) will ultimately have the most impact and save the most lives.

Sources:
[1] Richard Pallardy, 鈥淗aiti Earthquake of 2010鈥�, Encyclop忙dia Britannica, June 28, 2017, , accessed November 2017.

I was in Arizona this past summer right after the heat wave broke. Fortunately, my flights (which happened to be on American Airlines) from La Guardia to Phoenix and back were not affected since temperatures had cooled somewhat, but I can appreciate what a nightmare this would have caused for passengers and airlines alike.

This article highlights the logical actions that American Airlines and other airlines are taking to address issues caused by climate change. It seems to be a vicious cycle 鈥� the hotter the air becomes, the more fuel is burned during takeoff, leading to increased greenhouse gasses, which ultimately drives the temperature higher. In my view, simply restructuring hub operations is only a temporary solution 鈥� one that inhibits its ability to uphold its customer promise, and therefore could cause passengers to switch to other airlines that better serve hubs like PHX and LGA. The alternative solution of modernizing its fleet will not only allow American Airlines to operate more fuel-efficiently and minimize its carbon footprint, but it will be able to uphold its customer promise. As part of this strategy, the company may want to consider limiting its use of regional jets in hubs most susceptible to high temperatures in order to minimize disruption, given that these jets can only operate at temperatures below 118 degrees Fahrenheit. [1] Larger planes can operate at up to 127 degrees Fahrenheit, and thus may be a better aircraft choice to help to minimize some of the variability caused by high temperatures. [1]

Sources:
[1] Amy Wang, 鈥淚t鈥檚 so hot in Phoenix that airplanes can鈥檛 fly鈥�, The Washington Post, June 21, 2017,
, accessed November 2017.

The Tyler Telematic GPS system reminded me of the case we discussed in marketing class, 鈥淧ricing in a Digital World鈥�, regarding usage-based car insurance [1]. The driver report cards that the system issues will incentivize safer driving behaviors, and creates a system of accountability. If a driver behaves in an unsafe manner (i.e. consistently speeding), the report card creates a track record that allows the school bus company to enforce penalties, up to and including dismissal. As with the usage-based car insurance, the more bus drivers that adopt this digital technology, positive externalities will be realized as roads become safer, thus reducing accidents and improving overall safety over time.

While I see the benefits of the Versatrans My Stop app that are discussed in this article, I have concerns about the security of the app. The app allows parents to track the precise location of their children as they are transported to and from school. Although the app is password protected, the only search input needed is the child鈥檚 name and birthdate 鈥� inputs that are not necessarily only known to the parent. [2] If the app were to be hacked, the hacker would be able to have access to a child鈥檚 location. In the wrong hands, the app could actually put the child at risk of potential abduction, rather than serving as a protective mechanism.

Sources:
[1] Gourville, John. “Pricing in a Digital World (2015).” 性视界 Business School Case 515-104, May 2015.
[2] John Turk, 鈥淟ake Orion schools launching use of new app to help parents track bus arrival, departure times,鈥� The Oakland Press, August 25, 2016, . Accessed November 2017.