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Amazon’s Financial Results- Look to Trends Behind the Numbers

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For the past few days, Supply Chain Matters has been focusing on various financial reporting results from select manufacturers to highlight significant supply chain implications.  We would be remiss if we did not comment on the reported financial results from one of the world’s most dominant online retailer and market disruptor, that being Amazon. The diversified retailer reported it Q4-2012 and full year 2012 financial results this week.  For the crucial holiday focused fourth quarter, total worldwide revenues increased 22 percent, operating income increased 56 percent and gross margin increased over 3 basis points to 24.1 percent. Operating income, however, remains challenging at just 1.9 percent, rising slightly from 1.5 percent a year earlier. Increased profitability was attributed to improving business results in Amazon’s cloud computing and web services business. Sales increases were also reflected by increased participation of third-party merchants utilizing Amazon’s back-end fulfillment services. Full year 2012 results […]


Nintendo Supply Chain Deals With Change in the Business Plan

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We provide an update our mid-November Supply Chain Matters commentary, Nintendo Supply Chain Facing Big Challenges in the Coming Holiday Season.  Readers may recall that a late product introduction of the new Wii U gaming device was expected to provide supply challenges during the prime holiday buying season. Nintendo had to delay the availability of some online services and its Nintendo T Vii TV service until sometime in December. In our commentary we noted indications that the supply chain was pressured to make units available sooner. The company indicated at the time that it expected to sell upwards of 3.5 million new Wii units during the holiday season and a total of 5.5 million units by the end of March.  Much was at stake, including market presence and delivery of some level of respectable profitability for the fiscal year. An update appearing on CIO and syndicated by IDG New Service […]


Boeing 787 Dreamliner Program in Crisis- Commentary Three

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There was significant new news that broke overnight regarding the ongoing grounding of Boeing’s 787 Dreamliner aircraft. The New York Times last night reported (paid subscription or free metered view) that even before the grounding decision, the lithium-ion batteries used on this aircraft had experienced multiple problems, some of which were not known by current governmental investigative agencies, but known to Boeing. All Nippon Airways (ANA), the global launch customer indicated that it replaced 10 batteries in the months before the two recent fire and in-air emergency incidents. According to the Times article, ANA informed Boeing of the replacements as they occurred, but did not report the incidents to regulators because they were not considered a safety issue. ANA further disclosed the extent of previous problems which ranged from too low a charge in five of the replacements, and failure to operate properly in three of these batteries, causing replacement […]


Toyota’s New Crown as Global Leader- At What Cost?

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Business media headlines this week are declaring that Toyota has reclaimed the title of the world’s largest auto maker in 2012, taking that title from General Motors. Toyota sold 9.75 million vehicles in 2012, compared with the 9.29 million sold by General Motors.  An impressive 27 percent sales increase in the U.S. certainly helped to regain this crown. This achievement comes after Toyota was dealt two significant prior business challenges, some of which may have greatly impaired other global manufacturers Massive product recalls which began in 2009 were associated with problems of sudden unattended vehicle acceleration and misaligned floor mats among certain Toyota vehicles. Those incidents resulted in massive product recalls and significant threats to Toyota’s brand image among global consumers. The 2011 devastating earthquake and tsunami that hit Northern Japan added another blow that impacted global production volumes for months. Supply Chain Matters was quick to praise Toyota’s supply […]


The Business Results of Zara Stem from its Founder

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It has long been the contention of Supply Chain Matters that companies whose senior management team has a solid grounding and understanding in principles of operations and supply chain management can often have their supply chain serve as a competitive differentiator for business outcomes.  There are many industry examples. We can turn to names like Apple, McCormack Foods, and global apparel retailer Zara,part of Spain’s Inditex Group. We call reader attention to an article published in the January issue of FORTUNE and featured on CNNMoney, Amancio Ortega Gaona- the Third-Richest Man in the World.  The article traces the personal history of a man who is described as difficult to know, impossible to interview, very wealthy, and serves as the original founder and continued chairmen of Inditex Group.  It provides some context to a man we often did not know much about, one who came from the roots of poverty to […]


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