It costs to be unprepared
This week, Nintendo revealed that an unexpected high demand of its Switch product lead to a change in its logistical processes. The company had expected a demand of 2 million units, when in fact 2.74 million were ordered. This lead Nintendo to change from traditional sea freight to airfreight in order to deliver the new product in its first month. The Switch consoles were delivered from factories in China to the U.S. and Europe. It is thought, however, that airfreight could be utilized again due to the product being hard to find at retailers globally and the overwhelming demand from consumers.
Airfreight was costly for Nintendo, adding around an additional $45 per unit for shipping compared to sea freight. This reduces profits but helps secure demand while interest is high, something which is particularly relevant for game consoles. It shows how demand can be hard to predict, meaning preparedness is key. Nintendo was able to deal with the situation, but at a high cost. The company now plans to manufacture 16 million consoles for the fiscal year, rising from an initial plan of 8 million.
Read more on Nintendo’s reaction to the overwhelming demand here.
Let’s make packaging more innovative!
UPS and Sealed Air Corporation have teamed up to open a Packaging Innovation Center. The center is dedicated to e-commerce logistics innovations and is located within UPS’s Supply Chain Solutions campus in Louisville, Kentucky. It aims to maximize efficiency, minimize waste and reduce shipping costs for companies within the e-commerce industry, dealing with common packaging and shipping problems. It also helps businesses prepare for the future of supply chains and fulfilment services.
Due to a rise in e-commerce, the disposal of packaging is becoming more regular for customers. UPS wants to help businesses move away from standard-sized packaging through developing innovative solutions, therefore minimizing the waste created by the excessive use of materials and the resulting impact it has on the environment. The center contains many of Sealed Air’s cutting-edge packaging solutions, e.g. an automated right-sizing system to eliminate the empty space within a box by 60%. Working together, the two companies will also offer consulting services to provide businesses with an in-depth package performance analysis.
Find out more information on the center here.
Further investment in the sustainability trend?
On Tuesday, a pair of Tesla executives were announced as directors of Redwood Materials. This is a process development company that focuses on using advanced technology in order to recycle, reuse and remanufacture materials. So far, the company has raised $2 million. It is thought the two companies will come together in the future to improve the sustainability of Tesla’s manufacturing system. Tesla has been clear on its intent to control more of its supply chain and further manage its reverse logistics.
Social responsibility is becoming an emerging trend throughout the supply chain industry. Tesla in particular has been striving for sustainability for quite some time, pushing boundaries to achieve the best practices. Through using a company such as Redwood Materials, it enables Tesla to boost its production through more sustained manufacturing. Furthermore, it will help towards making its supply chain more efficient in regards to measuring and meeting demand.
More information can be found here.
Have a great weekend!
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