TOYOTA, FORMULA 1 AND THE SMED

Before telling you a story about Toyota and Formula 1, let me begin by explaining what is the SMED.

SMED stands for Single Minute Exchange of Die. This method is used in the Just-In-Time strategy, which is a method related to inventory where materials are only ordered and received when they are needed. The goal of Just-In-Time is to decrease waste and increase the efficiency of the inventory process. Keep reading until the end, I promise the fun story will come soon!

The aim of the SMED is to reduce the time it takes to produce some parts of the product, to reduce the overall cost of making a product or delivering a service and to increase the flexibility in the production process.

The way to implement the method is the following one:

If the concept of Single Minute Exchange of Die remains unclear, you can check this 1min video. 🙂

Now, let’s talk about Toyota and Formula 1. Toyota is actually one of the first company who began using this method. It was created by Dr. Shigeo Shingo, who was an industrial engineer from Japan.

They began using it as when they were trying to improve the time it was taking to change the tires of the car during races. In 1950, it was taking one whole minute (which can strongly impact the race!) to change the tires. Today, it only takes..2 seconds! Watch this video if you want to see how SMED can make major improvements in terms of efficiency and reduction of “waste”! 🙂

Sources: https://www.sixsigmadaily.com/single-minute-exchange-of-die-smed-definition-example/ & https://www.processexcellencenetwork.com/business-process-management-bpm/articles/single-minute-exchange-of-dies-smed

MASSIMO DUTTI

When supply chain meets chocolate

We all know Nestle, whether it is for their KitKat, their Nesquik chocolate powder. Indeed, this big multinational is the world leader in the food industry.

In order to be aligned with their green and sustainable plans, the company has taken actions regarding their cocoa supply chain. Their goal is to significantly reduce (and even eliminate) their supply of cocoa coming from protected areas which are threatened by deforestation, in West Africa.

This choice was probably not the most economical one, nor the easiest in terms of logistics. However, the company decided to change their distribution network in order to be aligned with their customers’ needs. Indeed, nowadays customers are more and more careful and regarding on the origin of the product they are buying. They demand for more environmental-friendly products (for instance, when they shop for chocolate), produced in a more ethical way. It is for example one of the reason why more and more people are changing their diets to eat more organic and/or plant-based food.

Now that we understood the consumer’s point of view, let’s go back to Nestle’s supply chain ! Nestle has defined the “Nestle Cocoa Plan” to achieve their objectives. Here are the actions they announced a few days ago, that aim to tackle deforestation.

From my personal point of view and as a customer of Nestle, I highly appreciate the changes and efforts they are doing to make the world a better place. Even though these changes might be helping their marketing strategies and change their brand perception positively, I still appreciate the fact that they decide to start changing their distribution network from the root.

In addition to these supply chain adaptation, they also worked on the human aspect of the question by eliminating child labor from, but also giving access to education to these children, empower women and train farmers in Good Agricultural Practices.

If you are more interested by the topic, I recommend you to check out their Youtube channel dedicated to have a more ethical and sustainable cocoa supply chain: https://www.youtube.com/user/NestleCocoaPlan/videos

Sources:

https://www.channelnewsasia.com/news/business/nestle-says-cuts-deforestation-in-its-cocoa-supply-chain-12583890

https://www.nestle.com/csv/raw-materials/nestle-cocoa-plan

FOCUS ON AMAZON: an E-COMMERCE GIANT AT THE HEART OF POLEMICS

Since the beginning of the coronavirus crisis, the giant of the e-commerce business had to react quickly to readapt their business model and their supply chain. I decided to focus on two logistics issue before concluding and broadening the topic with two examples of other issues/decisions faced and made by Amazon during this crisis.

FIRST ISSUE: HOW TO DEAL WITH THE HUGE INCREASE IN DEMAND FROM THEIR CONSUMERS?

First, the Amazon company have seen a huge increase in orders from consumers all around countries currently in quarantine. Whether it is essential products such as medical supplies or random objects to pass the time during the lockdown (ex: boardgames), the company had to quickly react as their response time would highly increase.

Due to a high demand of the sanitary-related products, they made the choice to prioritize them in terms of shipments and deliveries in the United States. (Source: Business Insider) Thus, the company had to reorganize their operations and distribution processes to be able to cope with the higher demand, and prioritize the shipment of the most necessary supplies to their customers.

SECOND ISSUE: HOW TO KEEP THE BUSINESS RUNNING IF THE EMPLOYEES ARE WORKING IN A DANGEROUS ENVIRONMENT?

A few days ago, Amazon announced that the first coronavirus case has been detected within one of its warehouse in the United States. (Source: The Atlantic) Thus, the ethical question of “should we keep the business running or should we focus on the safety of our employees ?” has been risen by the managers of the company.

In France, Amazon warehouse’s employees began a strike as they were feeling unsafe to continue working in this situation and context. As some employees dropped out of work, Amazon already started contacting temporary workers to make sure they would have enough employees to make the company run during the crisis. In response to the strike, the company answered by offering a rise in the employees’ salary. (Source: Reuters)

CONCLUSION

To conclude, Amazon is in the center of many dilemmas right now. The challenges faced by the crisis are threatening multinational businesses. I am personally very curious to see how Amazon will continue to react during the next few weeks.   

It will also important to remind that the company also had to deal with non-logistics issues such as a high rise in the price of their medical supplies (due to the law of supply and demand). The company reacted quickly by asking their consumers to report any fraud that they were finding on their website.  (Source: Engadget)

A second example could be their financial situation which positively increased compared to other businesses.

Date: March 16th

Jeff Bezos, the CEO of the company even offered his help to the White House of the United States. (Source: Fox Business)

One thing is sure, Amazon (and of course, most of the other companies around the world) had to prove their capacity of adaption in terms of logistics, supply chain and distribution network but also in other domains in a very short amount of time, and will probably continue to do so in the next few weeks.

LOGISTICS ISSUES FACED BY restaurants during the Coronavirus crisis

As the governments announced a quarantine in the whole country a few days ago, almost every businesses in Spain, Italie and France had to stop their activity for an undefined period of time.

This is the case of many restaurants: not only big multinational companies such as KFC, but also small independent and/or family companies. As the virus began to spread all around Europe, problems started to rise and decisions had to be made. 

One of the first issue that restaurants had to face, is about stocks: « What are we going to do with all the perishable food that we currently have in our inventory?».  

I observed three different reactions taken by the restaurants: give all the leftovers to their own employees (ex: Salad&Co in Lille, France), give the food to associations for people in need, and selling the leftovers to their customers (such as the restaurant Papa Raffaele in Lille, France). 

Example of a popular italian restaurant in Lille, France which organized a market to sell all its leftovers

A second problem that restaurants had to face is the following question : « Are we going to offer delivery services ? ». The question involves a high responsibility as some people think that it is against the recommendations given by the government, and it is not safe for the deliverer and the customers to be in contact together. But on the other side, the economic situation of the restaurant owner may be critical if he/she does not keep working thanks to home deliveries. Moreover, the platforms such as Deliveroo or Glovo kept working, so it means that other restaurants already made this choice.

To conclude, several logistics decisions had to be made very rapidly by restaurant owners. I think that these decisions were easy to make as it involves the safety of others, the financial situation of the owner and it has been made in a context of stress and uncertainty.  

And you, what would you have done in terms of inventories and deliveries if you have owned a restaurant in Valencia? 

AN ONLINE QUEUING SYSTEM FOR MEDICAL APPOINTMENTS

Have you every waited a long time in your dentist’s waiting room ? I mean, a very very veeeery long time ?… Yes me too. To face this queuing and popular issue, some innovators created websites to make medical appointments become digital. 

It is for example the case of the online website and app (ranked 26th on the French Apple Store!) called « Doctolib ». In five years, the number of employees of this company went up to more than 800, with a turnover around 100 million euros in 2019.

This new queuing system is changing the relationship between the doctors and their customers. The third person is not longer an assistant or a voice message but an online platform anytime and anywhere. It allows the medical to have more time dedicated to its pattens and thus to reduce the queuing time. Indeed, the waste of time related to dealing with appointments cancellation or delays are all managed by the platform. The SMS reminder sent shortly before the appointment also helps to regulate the delays or « holes » in the schedule. 

However, even if these online medical appointments platforms are radically changing the queuing system nowadays, some issues need to be underlined. First, not everyone is able to have access to these websites/app. For instance, older people might have an issue to create an account, understanding the process and thus booking an appointment. Then, what about the medical assistant who are afraid to lose their job? Indeed, the website Doctolib claims that the 65% of the assistant’s time can be saved.

To conclude, the online queuing system for medical appointments is revolutionizing the industry. It can help reducing queues but can it entirely delete it? We learnt that queues appear because there is variability either at the service, either at the arrival. It would be interesting to study the pain points of this new digital system and analyze its actual impact on the waiting time of the clients and doctors. Last but not least, Doctolib has recently launched a new service, more digital than ever : an online medical meeting. We may wonder the impact of this new trend on the queuing system of doctors and their customers.