A Supply Chain Management Problem

How would you change the fishing industry?

In Japan, the aftermath of the tsunami left large parts of the country’s infrastructure in tatters.  So it was for the fishing industry.  Trawlers were lost, harbours devastated, buildings destroyed, everything gone.  A monumental problem.

An article in the New Scientist details an attempt to rebuild a fishing business in a new way.  The fundamental problem for the fishermen was that the fish markets had been destroyed. They had nowhere to sell their catch. 

So somebody had the idea of turning it into an internet business.  They equipped the boats with webcams and laptops and posted details of their catch in real-time. Their customers bought the fish as it was caught.  They did away with the physical market, and radically changed the nature of the business

Faced with total disruption of their business, they were forced to rethink the way they did business.  Normally, it would require a considerable leap of imagination to ‘do away with market’, but in this case it was taken away from them.  The fish market has been a part of the industry forever, how could you consider not having one?

Rebuilding the old infrastructure would cost millions.  This is a solution that has changed the supply chain and provided real benefits for customers.  Whether or not it solves any of the other problems the fishing industry has, is still to be decided. 

 It shows you what can be achieved when you are forced to question your assumptions.

How to reduce energy consumption

How do you reduce domestic energy use?

If you think about it logically, there a number of ways.

You can put the price up, but that penalises lower income groups. You can build or convert houses to conserve heat, but that takes a lot of time. You can also redesign domestic equipment to consume less energy, but this also takes time. Lastly, you can encourage people to use less energy by installing energy monitors that give them direct feedback of their energy use. 

All of these methods have associated drawbacks and costs.

I recently a read a report that explains a new idea.  It uses ‘social norms’ and is incredibly simple.  All you do is let people know how their energy consumption compares with other people.  You just print their performance on the energy bill.  You let them know the average for similar houses for that period, and what the best performers achieved.  That’s it, you leave the rest to them. 

Most people recognise the benefit to the community of saving energy and will be motivated to aspire to do better.  The method is ‘aspirational’.

How effective is it?  Typically, it reduces consumption by an average of 2%.  That doesn’t sound much, but it is equivalent to the reduction you get by increasing the price by 11%.  Furthermore it doesn’t ‘wear off’, it motivates people to improve their relative performance.

It is such a great solution, and as with all great ideas, costs little.

 Great solutions to difficult problems are found by thinking in a new way.