Etihad's flight from Chicago to Abu Dhabi

On Friday, March 7, I was sitting in the O'hare lounge (Chicago airport).  The Etihad flight from Chicago to Abu Dhabi is 11,700 kilometers.  It will always amaze me that any plane can stay in the air long enough to fly 11,700 kilometers!

As I sat there I watched one vendor after another reload the plane for the trip back to Abu Dhabi.  Etihad has to hire companies to:
1. Do maintenance
2. Clean the plane
3. Provide food
4. Refuel (Think of how much fuel it would take to fly this plane halfway around the world)

(Vendor means anything that sells.  If you buy a bottle of water from a machine that's called a vending machine.)

Etihad currently flies to 63 locations (Emirates flies to 140).  They have to locate and make contracts with several companies in every one of those locations.  Choosing vendors will also be discussed more later in the semester.

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The plane in the picture above is a Boeing 777.  As I was waiting I read that a Malaysia airlines 777 went down near Vietnam.  It is never a good thing to read about a plane crash just before you get on a plane!  However, I was not worried.  The 777 has been in production since 1995.  It has one of the best safety records in the history of aviation.

Strategy and Sustainability

When you play a game you think about "How am I going to win?"  Companies do the same.  A companies plan to win is called a strategy.

A companies "core" business is what it does that is most important.  This is what they want to focus their energy on.  For example, for UAEU teaching and research are "core" activities.  Security, cleaning the buildings, maintenance, scheduling classes, etc. are all outsourced.  UAEU wants to focus on its core.

The book points out that supply chain is a process... it's a systems approach.  Every company has:

Inputs that go through a transformation process that become outputs.  Evaluating each step in the process provides feedback.  Think of it this way:  As a student you are an input.  We teach you.  You grow. You change.  When you graduate we hope you are a different person.  You will be the output of our university.  We put you in a capstone course and give you an internship as part of ways to measure if you have learned what we hoped you would learn.  This is our feedback.  As faculty we ask, "How can we make our graduates better?"  Good companies are always doing the same thing.

The term "sustainability" means it is something that can be done for years and years.

Shareholder/Stockholder vs. Stakeholder.

There are some words that have exactly the same meaning:
Shareholder = stockholder
If you wanted to buy one share of stock in Google it would cost you today Dh 4,460 ($1214).  This would make you a part owner of Google.  You are a shareholder/stockholder.  It means the same.

Stakeholder is anyone affected by an organization.  Even though you and I don't own Google stock we are affected by how Google does business.  We are stakeholders in Google.

Avoiding taxes

Apple is known for its creative products because former CEO Steve Jobs.  In the business world Apple is known as one of the most profitable companies in the world because of CEO Tim Cook.  Cook became CEO because of his mastery of Supply Chain Management.  I will talk about him more later in the semester.

On my flight back from the US I saw this newspaper:

Being the world's second largest Multi-National Corporation (MNC), Apple is able to book profits in countries that have friendlier tax laws.  This is a nice way of saying that Apple avoids paying taxes in the US, Europe, and most of Asia by claiming that a large share of its profits come from Ireland.  Ireland decided years ago to have tax laws that are very friendly to businesses.

We will talk about this later in the semester when we discuss how companies decide where to locate their business.