News

MIT’s Alexis Bateman writes that vertical integration is gaining favor as companies address quality and sustainability, but it also demands a close look at business priorities - Companies have been vertically integrating operations for many years to gain more control over the supply of key materials. Henry Ford’s ownership of rubber plantations and iron ore mines that provided raw materials for automobiles is a classic example.

MIT to create new center at the world’s busiest port in Ningbo, China - The government of Ningbo, China — home of the world’s busiest port — is partnering with the MIT Center for Transportation & Logistics (MIT CTL) to create a global center for supply chain education and research.

Discussions of self-driving vehicles are often accompanied by highly confident predictions: Visions of the future include whole networks of automated cars seamlessly zipping around metropolitan areas, safely and efficiently, with every person inside them a passive, hands-off passenger. On Tuesday at MIT, the U.S. government’s chief auto safety official offered a more restrained view, suggesting that technology could provide important new safeguards for cars, while observing that it is too soon to say precisely what form vehicular automation will eventually take.

The first massive open online course, or “MOOC,” made its way onto the educational scene back in 2008 as a model for delivering learning content online to any person who wants to take a course, with no limit on attendance. These interactive learning spaces have not only eradicated limits on the number of students who can attend a course, they have also helped to create a very scalable and affordable way to deliver all types of education – supply chain executive education included.

“We’re like Rodney Dangerfield—we don’t get no respect.” Professor Yossi Sheffi, a professor of supply chain management at Massachusetts Institute of Technology (MIT), chuckled when I asked him why there’s such a shortage in supply chain talent. He, like a number of supply chain professionals I spoke to over the past month, was lamenting the fact that the term supply chain doesn’t do a great job of suggesting the hard, dynamic work involved in running the manufacturing, movement and storage of a product.

By Yossi Sheffi. One of the mysteries of the stock market's decline at the beginning of 2016 is why such a precipitous fall occurred at a time when economies are reaping the benefits of lower energy costs. As oil prices parachuted to depths not seen since the tech crash of the early 2000s, factories, transportation carriers, and consumers pocketed substantial savings on fuel costs. The plunge in oil prices transfers about $1,500 every year from Saudi Arabia, Russia, Venezuela and other oil producers to the pockets of every US driver.

By Yossi Sheffi. The controversy over reshoring has flared up again thanks largely to some research published by the managing consulting firm A. T. Kearney in December 2015. - Reshoring refers to the practice of bringing manufacturing jobs that were previously off-shored to countries such as China back to the United States. Some people argue that this trend has accelerated over recent years and is reviving the nation’s manufacturing might.

By Yossi Sheffi. The controversy over reshoring has flared up again thanks largely to some research published by the managing consulting firm A. T. Kearney in December 2015 -- Reshoring refers to the practice of bringing manufacturing jobs that were previously off-shored to countries such as China back to the United States. Some people argue that this trend has accelerated over recent years and is reviving the nation’s manufacturing might.

ASHLAND, MA – June 14, 2016 – OnProcess Technology, a global pioneer in service supply chain management and optimization, today announced results of a joint research project with the Massachusetts Institute of Technology (MIT) Supply Chain Management (SCM) Program, which found that by using Internet of Things (IoT) data to predict machine failures, companies can reduce costly inventory stock while improving their ability to meet service levels.

On January 4, 2016, MIT alum Jeff Silver, along with his wife Marianne and two of their sons, visited the Massachusetts of Institute of Technology (MIT) to gift the Center for Transportation & Logistics (CTL) with $2.5 million to help fund the Center’s ongoing efforts in supply chain research and education. The gift will be divided into two funds:

Dr. Yossi Sheffi, a professor at MIT, said that companies have made great strides in improving the resiliency of their business, but that they still have a long way to go, especially in the area of cyber-security. 

Watch the full interview.

By Yossi Sheffi. Plunging commodity prices are unnerving many companies to a point where they are implementing drastic cuts to their operations and workforce. Adjusting to market shifts is sound management practice, but not when the course changes are so extreme that the company becomes too debilitated to take advantage of an eventual market upturn. Thinking about a turnaround in commodities prices might seem naive at best at this time, but it’s easy to underestimate how quickly markets can rebound and catch companies flat-footed.

By Matthias Winkenbach and Daniel E. Merchán. The Coca-Cola Co. bottler in Rio de Janeiro used to deliver crates of drinks in the city’s Copacabana area by truck until a parking ban forced the company to rethink its distribution strategy. The big cargo vehicles now arrive early in the morning, park at designated sites and transfer the goods to motorcycles that make the final delivery to customers.

By Luke Yoquinto and Joseph Coughlin. Companies such as Instacart, Uber and TaskRabbit may be known for their appeal to young, urban consumers, but they may soon influence older adults’ lives just as profoundly. Offering alternatives to traditional, senior-oriented services, these companies stand to transform how the older demographic gets things done. At 88, Sally Lindover already participates as both a user and a provider in what’s known as the on-demand and sharing economy.

By Joseph F. Coughlin. Get ready for a new array of devices and services that will make it easier to work, stay healthy, live at home and remain connected to friends and family. For the next generation of retirees, the question that will trump all others will be a simple one: How do you add life to longer lives? As people live longer, and spend more time in retirement, the challenge will be to get more out of those years. How do you find a rewarding second career? How do you stay close with friends and family? How do you maintain independence and mobility?

By Yossi Sheffi. There are many ways to measure supply chain performance in terms of resilience, but there is one that’s easily overlooked even though it is gaining in importance: Detection time. By that I mean the time measured from the instant a company realizes it will be hit by a supply chain disruption to the time the incident actually takes place.

In his new book, “The Power of Resilience: How the Best Companies Manage the Unexpected” (MIT Press), MIT professor Yossi Sheffi explains why modern vulnerabilities call for innovative processes and tools for creating and embedding corporate resilience and risk management. Sheffi spoke with Longitudes editor Samantha Slappey. Samantha: Your book is titled “The Power of Resilience.” Why did you choose that name? Yossi: The term resilience is technically taken from material science—it is the ability of a metal to return to its former shape after deformation.

After being caught off guard by a phenomenal increase in sales in 2013, a company in the auto battery replacement market wanted to improve the accuracy of its sales forecasts. The problem was exacerbated by a relatively long ramp up to new production. Consumers go shopping for new car batteries when their existing units fail, so helping the company to anticipate failures helps the organization to improve the accuracy of its sales forecasting.

By Yossi Sheffi. An important challenge facing companies today is how to engender trust in the products they sell, and having gained buyers’ trust, how to keep it through thick and thin. There are four categories of attributes that consumers care about. The first and simplest is search attributes such as a product’s weight, color, or price. “Search” attributes are obvious tangible properties that consumers can search for and personally evaluate without ever buying or using the product.

By Alexis H. Bateman. The ability to track and trace products is fundamental to sound supply chain management. Traceability affects supply chain efficiency, product safety and security, managing deep tier risks, on-time delivery performance, troubleshooting customer issues, controlling costs, and regulatory compliance. Now, another set of demands can be added to this list: government and consumer pressure to meet sustainability goals.

In 2005, Dr. Yossi Sheffi of MIT helped change the industry's thinking on supply chain risk management with his book titled The Resilient Enterprise. Now he is back again a decade later with fresh look at supply chain risk management strategies, based on three years of additional research on the subject. Sheffi discusses this latest work, The Power of Resilience, in a video interview with SCDigest editor Dan Gilmore. The book is not just an extension of The Resilient Enterprise, but a whole new work that stands on its own.

When safeguarding their supply chains against disruptions, companies commonly assign the highest priority to events that happen relatively often and hit hard. Focusing on those with the highest likelihood and the greatest potential impact certainly seems like a logical approach to risk management. Except that these are not the worst perils that companies face. In fact, events that rarely happen but wreak havoc pose the most dangerous threat to corporate health.

Companies often group inventory items into classes in order to manage them more efficiently. Managers routinely use these clusters or segmentations in their inventory replenishment planning decisions. However, as companies grow and their operations expand, these classifications can become outdated. If this problem is not addressed, products can become misclassified. Inaccurate SKU classifications add cost to supply chains and hurt service levels as inventory managers misallocate resources to meet demand.

Yossi Sheffi, professor and director of the MIT Center for Transportation & Logistics, discusses his newest book, "The Power of Resilience: How the Best Companies Manage the Unexpected." [Run Time (Min.): 6:44]

Watch the video.

In new book, MIT professor explains how companies can lessen the shocks of a volatile world. Companies large and small globalize their enterprises in search of advantages, such as lower costs, flexibility, and closer proximity to key markets. But globalizing comes with an Achilles’ heel: The vaster a company’s operations, the more vulnerable it becomes to jarring events around the world, including natural disasters, political upheaval, industrial actions, mistreatment of workers in suppliers’ factories, and damaging effects of climate change.