Most companies have digital platforms that support specific functions, such as supply chain management, product design, or operations, and they tightly regulate who may join the platform. The Chinese appliance manufacturer Haier has extended its supply chain management platform to facilitate a broader range of collaborations from innovation and design to supplying materials and components to solving technical problems and providing new services. The platform allows Haier to capitalize on the expertise and resources of its ecosystem, rapidly exploit new business opportunities, respond quickly to disruptions, and achieve efficiencies in a wide range of activities.
In June 2015, Peter Phillips, Chief Operating Officer of Frontier Services Group (FSG), was preparing an update for the board on how operations would support the company's new strategy. Given the ongoing decline in the price of oil and the extractive industries, the outlook had changed for FSG. His aim was to steer a new course to becoming the leading pan-African logistics provider. Founded in March 2014 by Erik Prince, a former U.S. Navy Seal and ex-CEO of Blackwater, a private security firm, FSG was a logistics and transportation company listed on the Hong Kong Stock Exchange, with a market capitalization in excess of $200 million. Headquartered in Nairobi, Kenya, the company employed more than 340 staff in its head office and regional subsidiaries in Hong Kong, Beijing, Dubai, and Malta. In addition to traditional logistics solutions like transporting personnel, materials, supplies, and humanitarian aid, FSG provided civil engineering and support services such as in-house construction, facilities management, and workforce accommodation. Its mission was to build and maintain the infrastructure, installations and platforms its client organizations required to operate in Africa. Although the new approach would open up significant growth opportunities, a number of operational challenges remained. The lack of trained and skilled labor in Africa, coupled with the limited competence of the logistics sector would, if not addressed, impede the future growth of the company. The case traces the evolution of FSG since its inception in 2014 as a Kenyan air charter and freight services company. It offers an overview of the company's recent development and current strategy, notably how it handles the logistics needs of customers across the vast and very diverse African continent.
Mountain Hazelnut Venture Limited ("Mountain Hazelnuts") was founded with economic, social, and environmental objectives. It planned to distribute young hazelnut plants at no charge to a large number of subsistence farmers in Bhutan. The farmers would plant the trees in fallow or degraded land, tend them, and sell the resulting nuts to the company at a price negotiated between the Bhutanese government and the company. If successful, this would generate a financial return for investors, greatly increase the cash income of participating farmers, help preserve rural Bhutanese communities, and improve the environment by stabilizing hillsides, reducing erosion, and providing other benefits. Mountain Hazelnuts was the first 100 percent foreign direct investment company in Bhutan. By early 2011, when the case is set, Mountain Hazelnuts had successfully established a nursery in rural eastern Bhutan, with a capacity to produce millions of plants. It was preparing to distribute its first trees to Bhutanese farmers-a project that would involve 10 million trees over five years, and involve about 15 percent of the country's population. This case is intended for use in a course on supply chain management, but can be used in classes focused on the environment, entrepreneurship, social entrepreneurship (for instance, within a philanthropy course), global business, or business in developing economies.
With the best of intentions, companies up and down supply chains experiment with isolated efforts to improve sustainability-only to encounter a long string of unanticipated consequences, often in the form of financial, social, or environmental costs. That's partly because most firms respond in a piecemeal way to pressure from customers, shareholders, boards, employees, governments, and NGOs. For instance, they demand that suppliers change their materials to environmentally friendly ones or move manufacturing closer to end markets to reduce emissions from transportation. And they tweak their own operations by using compact fluorescent lamps, recycling more of their materials, and so on. Lee's research shows that it's much more effective to take a holistic approach to sustainability and make broader structural changes, as shirt manufacturer Esquel, steelmaker Posco, and others have done. Such changes can include reinventing processes, developing new kinds of relationships with business partners, and even collaborating with competitors to achieve scale. Stakeholders increasingly hold corporations accountable for supply chain partners' actions, as we've learned from widely publicized recalls of tainted pet food and lead-laden toys. Clearly, sustainability is a competitive concern. The core managers overseeing your supply chain must own and tackle it as aggressively as they do cost, quality, speed, and dependability.