Don’t let your supply chain land you in court
There is a lesson for all supply chain managers to be learned from Chipotle’s rough 2015: don’t let a lack of transparency and visibility in your supply chain land you in court. Following up on our coverage at the beginning of December on the norovirus outbreak resulting from Chipotle’s food supply chain scandal, it is now reported that a federal criminal investigation will be launched at the once hailed fast food Mexican restaurant. This particular investigation will focus on the norovirus outbreak in August 2015 that was traced back to the chain’s Simi Valley, California location. Norovirus outbreaks are often traced back to an infected employee, however this would not necessarily explain the E.coli outbreak that plagued the company in October and November. The scary part for consumers is that Chipotle will likely never be able to identify the source of its food supply chain woes.
Needless to say, Chipotle has felt the impact of this crisis on a large scale. Sales reportedly dropped by 30% in December at established locations. This story serves an important reminder of what the supply chain can do to a company’s image when a crisis breaks out. In an effort to win back some of its loyal customers and improve its image, Chipotle ran several full-page ads across many states apologizing for the scandal and promising to clean up its act.
Read more on Chipotle’s supply chain issues here.
All eyes on the CES 2016
This year’s Consumer Electronics Show kicked off in Las Vegas on January 6 and will be running until January 9. Many innovations being presented will certainly have an impact on the supply chain industry. Advancements in drone technology, robotics and augmented reality have made headlines so far, representing three innovative fields set to have a bigger impact on supply chain processes in 2016. Another leading topic at the event so far has been the emphasis placed on electric engines and autonomous driving features in automobiles. Nine automakers and over 115 tech companies from the auto industry are at the event, showcasing their latest advancements. These automobile innovations will not only have an impact in the consumer goods industry, but also across the logistics industry, especially when it comes to autonomous driving functions. If you are looking for tech trends that could be coming to a supply chain near you, the CES 2016 is a good place to start.
Have a look at some of the gadgets from CES here.
The Apple supply chain ripple effect
Apple investors and supply chain partners are on edge this week after it was revealed that the company is expected to reduce the production of its iPhone 6S and iPhone 6S Plus by 30% between January and March. This news, coupled with overflowing inventory of the aforementioned devices, led to a 2.5% drop in Apple shares this week. While a cutback in production was foreshadowed toward the end of 2015, the magnitude of the planned scale back came as somewhat of a surprise. Apple’s drop in share price is however only a small portion of the story. Many of the company’s suppliers and other smartphone component producers in Asia are feeling the impact of this announcement and have experienced a drop in share price as well. Hon Hai shares, whose trade name is Foxconn, were down 1.8% as the company experienced lows not seen in over four months. Furthermore, several European microchip makers which are heavily dependent on the smartphone industry are also feeling the impact of the industry slowdown.
Click here to read more about the ripple effect Apple’s production plans are having in the smart phone sector.
Have a great weekend!
