Chinese Companies Will Take Your Good Name

Better watch your good name in China. The Wall Street Journal reports that many Chinese companies have taken corporate or product names that closely mimic those of Western companies. So, in addition to Wal-Mart, you’ll find “Wu-Mart” in China. You can either by a real Honda motorcycle, or a “Hongda,” or a Chinese “Chery” instead of a Chevy. Need to do some mobile emailing? You can do it on your Blackberry, or the Chinese “Redberry” version. 

Whether Chinese law will someday reign in any of these copycatters is not clear. Experts say one saving grace for the westerners is that the Chinese companies would not likely be allowed to enter North American or European markers with these product names.

Should Amazon Watch its Inventory Waste Line?

In its third quarter results, Amazon reported inventories of $736 million, a whopping 41.3% increase from Q2. While certainly driven in part by an inventory build for the Christmas season, in 2005 Amazon saw only a 19% sequential increase in Q3. Year-over-year, inventory rose 61% in Q3, versus a 28% change last year. Put another way, days of inventory are at 32.5, vs. 27.4 last year.

Getting your Supply Chain Green

If you haven’t been looking at building a more environmentally friendly supply chain already, you better start thinking about it, as retailers and ultimately other high profile “channel masters” will demand it.

We reported recently on Wal-Mart’s high profile strategy to get more green (see As Wal-Mart Goes Green, What’s the Impact on Suppliers?). Now, four of the U.K.’s largest retailers have jointly announced a green initiative that will similarly impact the supplier base.

Home Retail Group – which includes Argos and Homebase – Marks & Spencer, ASDA and Boots the Chemist will work with their suppliers and environmental consultants Envirowise to explore new solutions for waste reduction, including re-useable transport packaging, better delivery logistics to reduce fuel usage,  and smarter product packaging design.

We predict a new position of supply chain environmental engineer, or something like it, will emerge over time.

More Sign That Current Oil Price Decline Won’t Last

A recent study by researchers from the International Energy Agency finds there has been little real investment in oil and gas exploration over the past five years, while global demand has surged.

According to the just released study, adjusted for inflation, the industry’s real investment in oil and natural gas production increased just 5% between 2000 and 2005. The data looked at investment both by independent companies as well as national governments. It notes that the impact of lower spending won’t be seen until several years later, given the lag from investment until increased production.

The researchers say a lack of investment in prior years explains the rapid rise of oil prices in the past few years, as capacity was unable to meet a surge in demand.

Calloway Goes On-Line, but Tries to Maintain Channel for Fulfillment

High-end golf club manufacturer Calloway, perhaps admitting the inevitable, has at last started taking on-line orders for its Big Bertha drivers and other products – with a fulfillment twist that protects the channel (for now).

Under the strategy, Calloway will take the on-line orders, but then use local dealers (pro shops) for actual fulfillment, for a share of the margin. The dealer to use will be selected based on proximity, inventory and other factors.

Our prediction: As frequently happens, this move is just a temporary island on the way to direct fulfillment by Calloway, enabling them to make the inevitable transition with less market disruption. It almost always works this way. The channel isn’t delivering enough value.  

Do you have any comments on this week’s supply chain news bites? What types of news is of most interest to you. Let us know your thoughts.