Tag: business

The Boeing Center for Supply Chain Innovation presents…an interview with Professor Panos Kouvelis, Emerson Distinguished Professor of Operations and Manufacturing Management and Director of The Boeing Center for Supply Chain Innovation at Washington University in St. Louis, about the Global Supply Chain Benchmark Study, a collaborative research initiative of faculty at leading business schools including Olin. Below is an excerpt of the report; for the complete report, go here → http://bit.ly/GSCBS2016

BACKGROUND

“For the past 25 years manufacturing offshoring to low-cost locations like China has been the dominant strategy for many western manufacturing companies. This has led to a significant reduction of manufacturing jobs in developed economies. Recently, many manufacturers have reported they plan to bring back at least a part of their global production volume to developed countries. General Electric, for example, announced in 2012 they would relocate manufacturing and R&D of their household appliances business, which had previously been offshored to China and Mexico, to Louisville, KY in the USA.1 Similarly, Plantronics, a U.S. based manufacturer of headphones, shifted production volume back from China to Mexico.2 At the same time companies from perceived low-cost countries have reported investments in manufacturing capacity in developed economies. For instance, the Chinese company Lenovo recently brought back the production of personal computers to North America.

While there seems to be an emerging trend to reshore production, traditional offshoring to developing economies continues to be a viable phenomenon. For example, General Motors recently announced a USD 12bn investment in new plants in China.4 These examples offer just a glimpse of the magnitude of manufacturing location decisions companies are currently making in a wave of restructuring of their global supply chains.”

EXECUTIVE SUMMARY

“Despite the growing attention in the business press to reports of companies relocating manufacturing to western countries, there is very little empirical research on the scale of such decisions, their drivers and their impact. Hence, in this study we investigate current trends in production sourcing. Based on a survey of 74 leading manufacturing companies predominantly from North America, Europe and Japan we shed some light on (1) what production sourcing decisions are currently being made, (2) what drives these decisions and (3) what results do they lead to.

Our research suggests that there is a significant wave of restructuring of global supply chains in progress. Companies de- and increase production volume all over the globe as shown in the overview presented in Exhibit 1. However, we did not observe a dominant strategy for sourcing production volume. Companies make different decisions for a variety of reasons. While China continues to be the most attractive country for manufacturing, many companies reported following (also) other strategies. Moreover, we see that decision making has evolved from simple cost comparisons to more complex trade-offs between a magnitude of factors that are deemed important, i.e., across quality, market access and risk. Based on these and other reported drivers we see a shift of production not only to China but also to Eastern Europe and the ASEAN countries which are being used as nearshore sources of production for Western European and Chinese markets respectively.

For North America we see evidence for a return of manufacturing. It is not a strong trend but in our sample more companies report shifting production volume to North America rather than offshoring to other countries. This pattern is not consistent with the much cited reshoring trend predicted by many business and political commentators. The movement we observed is not driven by the reshoring of American firms but rather by European and Asian firms offshoring who account for 60% of the production volume increase in North America. While this is good news for manufacturing in North America, the indicators for the future of manufacturing in Western Europe appear to be less bright. Indeed, Western Europe is one of only two regions for which our sample reports a net decrease of production volume. Companies reported offshoring for a variety of reasons including shifting to either less costly locations or to places closer to market demand.

Despite the decline in production volume in certain regions, there is no evidence for a further decline in manufacturing jobs. In fact our sample reports that for China, Western and Eastern Europe their sourcing decisions hardly impacted employment. Moreover, it was only for North America and Japan that growth of manufacturing employment is observed.

We believe the analyses and insights presented in this research not only inform but also call for action. Executives should look at their supply chains critically by challenging their current footprint and production sourcing choices. We explicitly encourage benchmarking against the companies in our sample within their industry and across industries. Insights into market expectations and the forces driving the reported production sourcing and technology decisions should stimulate a discussion about future strategic actions.

For policy makers – especially in Western (European) countries – this research provides information concerning the perceived attractiveness of regions worldwide. Reading the report will provide policy makers with data about the trends in industry and the factors that have led companies to shift production into or away from particular regions and can thus inform the debate on how manufacturing policy can boost competitiveness, attract and retain manufacturing jobs.”

For the complete report, go here → http://bit.ly/GSCBS2016

Five teams from business schools around the country competed for the $10,000 first prize in the first annual Monsanto-Olin Case Competition on February 12. The competition was designed to give graduate students an opportunity to provide innovative business solutions to a case study written about Monsanto’s seed corn supply chain. Participating teams represented:Texas Christian University, Rollins College, the University of Missouri, Pennsylvania State University, and Washington University.

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Early morning sunlight bathed the stoic face of Knight Hall as action-oriented executives from diverse industries gathered at Washington University for the 7^th annual Boeing Center for Technology, Information and Manufacturing (BCTIM) Industry Conference.  The theme was Supply Chains Disrupted:  Disruptive Technologies, New Business Models, and Operational Impact.  Executives from top companies in the region delivered presentations to quench the audience’s thirst for knowledge, and highly-skilled chefs from the Knight Center served delectable cuisine to sate its hunger.

Throughout the day, the angles of the shadows outside grew shorter, and then longer again, as theoretical and practical knowledge was transmitted between supply chain practitioners.  After a warm welcome address from Prof. Panos Kouvelis, the director of BCTIM, the attendees settled in for what would be a full day.

Tom Luft from Express Scripts kicked things off with a presentation about turning pharmaceutical manufacturer monopolies into commodities. John Vu talked about Belden’s expansion into strategic markets, inventory management improvements, and governmental regulations on the logistics industry. Mark Waight from Edward Jones spoke about how organized movement enables operational excellence in the service industry. Then, Prof. Kouvelis gave a special presentation explaining how effective risk management can foster innovation resulting in business model breakthroughs.

After lunch, Jeremy Soucek and Julien Marin-Couilloud discussed how Emerson manages risk in its own supply chain. Jim Kinnett went on to tell the audience about Monsanto’s journey through the creation and implementation of a digital supply chain, while Jeff Wieringa from Boeing described some disruptive technologies in the next generation of aircraft.

Finally, Chris Pickett impressed the crowd by explaining Anheuser-Busch InBev’s complex beer supply chain and logistical considerations.  All day long, pens feverishly scratched across notebooks in an attempt to capture the wisdom that can only be acquired from long years in operations management.

By Evan Dalton

Stay tuned to our social media for photos, videos, and slides from the conference, as well as fresh new content and upcoming events.

Patrick Rishe, new director of the Sports Business Program at Olin says the Cardinals will emerge from the recent investigation into the hacking of the Houston Astros computer database unscathed financially. The case alleges that someone at the St. Louis Cardinals franchise was behind the hack.

Rishe tells the AP, ”If you look at the different sources of revenue, what’s going to be impacted?”

Patrick Rishe

”Fans are not going to stop coming. Is their local media revenue going to go down? That’s highly unlikely. I don’t see this having any effect on the team’s revenue-generating ability,” said Rishe.

Read story on Fox Sports, “Brand tarnished, Cardinals likely to avoid economic damage”.

1. Personal Branding– Build your social network by using LinkedIn, Twitter and Facebook   as a window to new contacts and potential employers
2. Community Service – Volunteer at a nonprofit, such as a school, community group, faith-based or healthcare facility to learn new skills and help others
3. New Venture or Start-up – Seek out an alternative to traditional internships with a start-up or new venture to help determine if a field of interest is for you
4. Global Adventure – Expand your world and immerse yourself in a new culture
5. Make a Good First Impression – Develop rapport with others and grow your network

School’s not out yet for Olin undergrads in a new course called Business & Government: Understanding and Influencing the Regulatory Environment.  While their classmates packed up for summer destinations, the pioneers in this class trekked to the nation’s capital for a weeklong immersion into the regulatory workings of Washington D.C.

The program is designed and delivered by Brookings Executive Education (BEE), a unique partnership between Olin and the Brookings Institution. Students in this inaugural course include undergrads, MBAs and PMBAs.

Students were greeted on Sunday by Trevor Corning, BEE program coordinator, and led on a lively tour of Washington. The group is lodged in the heart of the city, at DuPont Circle, a short walk to Brookings and other notable sights such as the White House.

The class got down to business early Monday morning with an overview by BEE’s Mary Ellen Joyce of a heuristic by which to understand the process and the role of a policy entrepreneur.

Former Oklahoma Governor and now President of the American Banker’s Association, Frank Keating, keynoted the program sharing his observations about the importance of government-business interaction.

Governor Keating was followed by John Hudak, a Brookings Fellow, who discussed the publicly underestimated power of the President and his Cabinet secretaries, providing insight into opportunities to engage with decisionmakers.

Following lunch, the vibrant Ilona Nichols (Public Policy Consultant; former House and Senate Staffer, and Congressional Research Service expert on legislative procedures), briefed the students on the legislative process, confirming notions that Congress is indeed a “sausage factory.”

Next up was a behind-the-scenes tour of the Capitol led by former Congressman Jack Buechner who represented the district surrounding St. Louis. Buechner brought the students onto the floor of the House, creating lasting memories for the group.

The day concluded with a visit to the Washington office of Monsanto where students learned about the business perspective of the policy process and the importance of active participation in policy conversations.

Then it was back to work. Monday evening, students met in their groups to start discussing their assignment to develop an advocacy plan. Students were assigned roles to play in the debate over a high-level nuclear waste repository. We’ll see at the end of the week if the nuclear industry will hold sway over the anti-nukes!