Feeds:
Posts
Comments

Archive for the ‘pandemic’ Category

Two stories today. Both revolve around operating strategies that complicate adapting to the pandemic. One’s about IKEA, the other is about sex toys. Yes, sex toys. We have almost 900 posts on this blog and I think we have never discussed the supply chain for vibrators. But I also never expected The Old Gray Lady to run a story titled “Sellers of Sex Toys Capitalized on All That Alone Time” (Jun 7).

The article starts with the not too surprising revelation that sales of sex toys have spiked during the pandemic but the benefits have been uneven across retailers.

But while big, corporate sex toy retailers seem to have thrived, the same can’t necessarily be said for brick-and-mortar sex shops. As consumers rush to buy sex toys from websites, businesses that usually rely on foot traffic and interpersonal connections with customers are suffering.

Sid Azmi, 37, the owner of Please, a store in Brooklyn that’s been open for roughly six years, explained that despite having an accompanying online shop, she can’t compete with bigger online retailers.

Ms. Azmi said that small businesses often charge more for sex toys: They don’t get bulk-buying discounts from distributors, and they can’t afford to have huge sales on their products. Customers are usually willing to pay more, she said, because of the friendly service and education stores like Please can offer.

(more…)

Read Full Post »

As the country re-opens, there is the question of how workers can return to offices. How can firms be sure that employees follow appropriate social distancing?

Office furniture maker Allsteel has some thoughts on this. And they start with the Toyota Production System concept of poka-yoke. That is, they suggest designing the layout of the office so that the obvious way to use the space conforms to distancing requirements.

Check out their recommendations here: Poka-Yoke: Mistake-Proof Your Space

Read Full Post »

The British are famous for queuing. The stereotype has them as embracing orderly waiting their turn. But what if it’s waiting to vote in Parliament?

The powers that be in London have decided that online voting won’t do and that MPs should vote in person. There was consequently an in-person vote on a measure mandating this but the actual vote was executed with the appropriate social distancing guidelines. Here is how Politico described what went down (House of Commons bans virtual voting, opts for a queue, Jun 2):

Standing in a long line stretching from the chamber through to Westminster Hall and out of the building, roughly two-thirds of MPs slowly edged their way into the chamber to cast their votes in a process that took just over 45 minutes.

The system replaces the usual “divisions,” which see MPs walk through either the Aye or No lobby and usually take around 15 minutes, even if all 639 voting members are present.

What might that look like? Check out the video from the Guardian:

(more…)

Read Full Post »

The Financial Times has an interesting set of articles on how the ongoing pandemic impacts supply chains (Trade Secrets: Supply Chain Disruption). These hit on things like toilet paper, firms pivoting to new markets or switching from a business-to-business focus to serving retail customers. The one I want to highlight deals with how any fragility exposed by the pandemic will impact supply chain strategy going forward (Be wary of scapegoating ‘just-in-time’ supply chains, May 27) that links to a post that Gady wrote a few weeks ago.

Here is the gist of the article:

A lot of intellectual momentum is building behind the idea that the Covid-19 pandemic has revealed the foolishness of corporate executives in extending their supply chains without properly assessing the risks. Companies have been thinking of “just-in-time” when they need to be thinking about “just-in-case”. …

The reality is complex, and — a crucial point — differs with each industry. Some, like the car industry, have such sophisticated supply chains involving thousands of different components, some manufactured to extremely low tolerance, that diversifying into different suppliers is totally impractical through effort and cost. Sure, you will have a more resilient supply chain, but you’ll also go bust before the next pandemic arrives.

(more…)

Read Full Post »

There are some things that simply cannot be solved with an online FAQ. And if you have a question that needs to be answered or a technical problem that needs to be resolved, that likely means you need to call into a call center. Demand at many call centers should be relatively unaffected — or even boosted — by the ongoing pandemic. The call volume at an ISP’s tech support has to go up as more people are working from home and every hiccup in their connection becomes clear to them.

Unfortunately, call centers are not great places to be during a pandemic. Management has an incentive to pack agents like sardines. Business Insider had an article about a South Korean call center which had a significant Covid-19 outbreak and whether you got sick was really determined by where you sat. That seems to suggest that call center agents should just be allowed to work from home. As Vox explains, many firms have tried that (One nation, on hold, May 13).

Many call centers have scrambled to send thousands of customer service representatives to work from home for the first time, a process fraught with logistical and technical hurdles. Others have continued to tell employees to come into the office — which they can do, since call centers have been designated as an essential service — but at reduced numbers. A growing number have seen workers get sick with Covid-19.

(more…)

Read Full Post »

We have had a number of posts over the years on retailers filling ecommerce from brick-and-mortar stores (see, for example, here and here). From the perspective of inventory management, treating what’s in the stores and whatever is in a fulfillment center as one giant pool of inventory makes a lot of sense. In theory, there is no reason to turn down a web order just because the fulfillment center is stocked out if the needed item is sitting at some mall. The reality, of course, is more complex since picking and packing at a store is going to be more costly than doing the same work at a dedicated facility. Additionally, there is the question of how taking items to fulfill online orders impacts in-store customer behavior.

Now add to those concerns how shipping items from random locations impacts the logistics provider who has to collect and schlepp those packages. Apparently, FedEx has had enough and is working to rein in retailers shipping from stores (FedEx, Strained by Coronavirus, Caps How Much Retailers Can Ship From Stores, Wall Street Journal, May 14). (more…)

Read Full Post »

The supply disruptions affecting some seemingly basic products have been fairly sustained. While it is now easier than it was at the start of the lockdown to fine, say, toilet paper and tissues. Other items continue to be hard to come by. Articles are regularly appearing offering one explanation or another for why [fill in the blank] still isn’t on the shelf.

Take, for example, disinfectant wipes. These are basically on every list of how to be safe during the pandemic. That led to a burst of buying in February and March and the likes of Clorox and Lysol are still trying to catch up. One consideration here is that in contrast to items like toilet paper wipes were not in every pantry before the crisis hit and they also aren’t that easy to make (Why Clorox Wipes Are Still So Hard to Find, Wall Street Journal, May 7).

Disinfectant wipes can’t be made as readily as hand sanitizer. The process combines fabric wipes with the cleaning solution, and the Environmental Protection Agency has in place criteria for cleaners to be considered effective for use against SARS-CoV-2, the virus that causes Covid-19.

And unlike toilet paper, which is ubiquitous in homes and businesses, only about half of American households stocked disinfectant wipes before the pandemic, Clorox’s Mr. Jacobsen said. That led to an even more dramatic demand spike as current wipe users consumed a much higher volume while new buyers sought them out.

(more…)

Read Full Post »

Produktion von den neuen Melitta Schutzmasken am 20. April 2020 in Minden.

The pandemic has masked if not fashionable at least essential. That in turn has caused a number of firms to at least consider getting into mask production. That statement is a little overly simplified. As we have all learned over the last several weeks, not all masks are created equal. There are medical masks of various grades as well as simple cloth masks suitable for a trip to the supermarket. The latter would seem to have lower barriers to entry while the former may take some specialized skills.

Like making coffee filters. (more…)

Read Full Post »

The ongoing pandemic has created a host of problems for a host of industries and supply chains. Logistics providers have had to scramble as demand for some goods has dried up while demand for other items has surged. On top of that, passenger airlines — which play a large role in international air freight — have been hard hit. How is all that playing out? Check out this video:

 

Read Full Post »

It’s been a long time since I’ve written anything on supply chain contracts but a story in the Wall Street Journal caught my eye (Retailers Canceling Apparel Orders Amid Coronavirus Torments Clothes Makers, May 5). Basically it outlines how a shift in the standard contract between retailers and their Asian suppliers has come back to really bite the suppliers.

For reference, think of a retailer or brand in the west who outsources production either directly with a factory or through an agent. The factory incurs the upfront cost of sourcing materials and hiring labor in anticipation of being paid once the goods are delivered. But what happens if the market shifts between the order’s placement and delivery? Like, say, there is a pandemic and no one in North America is buying new jeans.

That’s where the shift in contracting comes in.

Letters of credit, a once-common backstop guaranteeing payment through banks, have faded away in the past decade. Under that payment system, the buyer’s bank committed to pay the supplier once the goods were shipped, ensuring factories were paid without delay or last-minute haggling.

Even in cases of force majeure—when retailers say they can’t pay owing to circumstances beyond their control—banks would generally still be obligated to pay suppliers if the goods had shipped, said Sonja Chapman, a professor of international trade at the Fashion Institute of Technology and longtime apparel-industry executive.

Retailers have moved away from letters of credit, opting instead for an open-account system—essentially an honor system—where factories trust retailers to pay after shipment. Factory owners in Bangladesh said they accepted the shift because they worried that if they didn’t go along, a competitor from India or Latin America would. They also are reluctant to speak up or take legal action because they don’t want to alienate buyers.

(more…)

Read Full Post »

« Newer Posts - Older Posts »

%d bloggers like this: