In the first episode in the Supply Chain Buzz series, Scott Luton discusses the latest topics in supply chain- trade deals, the GM strike, blockchain, and more.
[00:00:07] Good morning, Scott Luton here with you, live on Supply Chain Now Radio, welcome back to the show. In today’s show, we’re continuing one of our newest series, The Supply chain Buzz, a brief weekly look at some of the top news and trends across the global into an Supply chain community. All in 50 minutes or less. Today’s episode of Supply chain Buzz on Supply Chain Now Radio is brought to you by ProPurchaser.com, a trusted resource for thousands of procurement professionals since 2001.
[00:00:36] Propurchaser contains data tools and resources that allow its members to speak with authority, improve their position and achieve their negotiation’s goals. You can learn more at ProPurchaser dot com. It is Monday, October 14th. And let’s get to the news. As we assembled these six stories here today, we once again reached out to several big supply chain industry influencers and subject matter experts to get their take on the biggest stories from last week. First up, as brought to us by Kelly Barner at Buyers Meeting Point, President Trump announced on Friday what he’s calling Phase 1 of a trade deal with China. The tariff increase that was set to be implemented by the United States tomorrow on Tuesday has been shelved. It was initially going to be an increase in tariffs from 25 percent to 30 percent on some 250 billion dollars worth of goods. It’s all been postponed. The trade breakthrough has also reportedly included a Chinese purchase of 50 billion dollars in American agricultural goods from U.S. farmers. Stay tuned as the details are still being hammered out by both U.S. and Chinese trade teams. But a good sign nonetheless. And our second story, Kathy Roberson over at Logistics Trends and Insights continues to track the General Motors strike, which is now in its fourth week. Kathy mentioned some of the considerable repercussions that the strike is having on the automotive supply chain, including layoffs at OEMs and plant closures.
[00:02:08] The Detroit News is reporting that General Motors is currently reviewing a counterproposal that it had received from the union this past Friday night. Not only is the UAW managing the GM strike, but the union also has thirty six hundred members that began a strike versus Mack Trucks yesterday. On Sunday, Mack Trucks, manufactures, as you might know, heavy duty Class 8 trucks, engines and transmissions. The company has plants in Pennsylvania, Maryland and Florida. For our third story here on The Buzz. We received another tip from Tim Downer over freight waves. Tim and his team have been covering the recent layoffs of over 2000 drivers across industry, primarily including the following companies. Stevens tanker division impacts final mile delivery, Countrywide RV Transport and Halliburton. An oil and gas industry slowdown was a primary factor cited for a couple of the companies involved. Amazon’s termination of its contract was cited in the impacts decision to cut jobs and countrywide RV transport is shutting down its company altogether, with a major factor being a recent twenty six point six million dollar judgment against one of its drivers. In our fourth story here on The Buzz, we’re hearing about industry heavyweights that are looking for ways to revitalize a considerable amount of waste in the food and beverage sectors. According to a report in The Wall Street Journal, big players are looking for ways to reuse some of the 11 million tons of food waste that is produced in the U.S.
[00:03:44] alone each year. The article cited the following companies as some of those involved in the innovative efforts Mondelez International, Starbucks, Anheuser-Busch, InBev, Kellogg’s all to name a few. As example, chocolate makers are looking at ways of using more of the cacao fruit. About 70 percent of the cacao fruit is discarded after the cocoa bean has been harvested. Efforts are underway at finding new and creative ways of better, using the leftovers which have long been discarded as waste. Additionally, breweries are looking at new ways of better utilizing spent grain instead of sending the spent grain to farms as cheap animal feed. Other applications are being investigated, such as making batches of flour or new snack chips. And what do you ask are driving some of these efforts? The Wall Street Journal article cites Nielsen research as showing two big, big things here. Number one, nearly half of U.S. consumers say they want to change their shopping habits to reduce their environmental impact. And number two, sales of consumer goods marketed as sustainable, simple or organic grew to some one hundred and thirty billion dollars in revenue in the U.S. alone. Last year, that was up twelve percent from 2015, according to Nielsen data. In our next story, news was made last week when IBM announced a big development in the blockchain space.
[00:05:08] According to Computerworld, Big Blue announced last week a new service, the IBM Sterling Supply chain Suite. The service, which is built on the foundation of Sterling business, a business network and Sterling Order management, enables Real-Time Order Tracking and shipping optimization. Amongst other things. In fact, IBM’s acquisition of RedHat and its open source software was one of the key enabling factors that led to the development of the new offering. Simon Ellis, a research director for IDC, said IBM is not unique in offering a multi-tenant cloud network for supply chains. But the company does have advanced A.I. and blockchain as components of that service. More so than other vendors. Ellis stated, quote, I think companies can leverage this with other supply chain apps they already have. So they don’t need to rip and replace stuff. The value of blocked of any blockchain will be square of the number of users it has. So how you make those connections is important. And this certainly moves it forward in quote. In our final story, one development from last week really had our group of Supply chain influencers and practitioners buzzing the Supply chain Queen, Ben Harris, Chris daughton, Sarah Barnes, Humphrey, many others were all raving about the new partnership between Toys R US and Target. So let’s start with the Toys R US story. Once the dominant player and toy retailing, Toys R US business hit new obstacles in the late 90s and early 2000s, Amazon, Walmart, Target and many others all began to chip away at its market share.
[00:06:45] Toys R US eventually tanked, filing for Chapter 11 bankruptcy in 2017. It sold almost all of its assets, including some eight hundred brick and mortar stores, but it retained its valuable Toys R US name and trademark. Which brings us to this new venture. Target announced last week that it is partnering with the parent company of the Toys R US brand, Tru Kids, to help it relaunch Toys R US dot com. According to CNBC, starting Tuesday, shoppers who visit Toys R US WSJ.com to buy the latest toys will be redirected to Target.com to complete the purchase once they clicked on buy. And Toys R US will be opening new brick and mortar stores. Outsourcing management to a group called Beda B as in B Numeral 8 T-A, which is a retail as a service company charged with running the new physical stores. 10 Toys R US stores are expected to open in the US in 2020. Many analysts are highly complimentary of target supply chain capabilities. You may recall the company’s acquisition of the delivery provider shipped four five hundred fifty main dollars a couple of years ago. This acquisition enabled same day delivery for thousands of items. Target also offers e-commerce customers free curbside pickup at about fifteen hundred stores and free in-store pickup at all eight to eighteen hundred fifty U.S.
[00:08:12] Target stores. Additionally, the company has made significant newer commitments and investments in the toy category in recent years. Will the new Toys R US and Target Partnership create a new dominant player in the toy industry in the months ahead? I’m not sure it remains to be seen, but you can’t help but to admire the creative structuring of the deal and how it combines several powerful forces that seemed destined to create some waves in retail just in time, of course, for the 2019 holiday season. All right. There you have it. Several of the leading Supply chain news stories and trends right here on the Supply chain buzz on Supply Chain Now Radio. You’ll find links to each of the six stories on the show, notes for your convenience. And we invite you to come check us out in person. We’ll see you on October 23rd at the South Carolina Logistics Tech Talk event in Charleston. And you can learn more about this event and many others on the upcoming events tab at Supply Chain Now Radio dot com. Hey, while you’re there. Be sure to check out all of our other upcoming series and podcasts as we continue our mission to bring new ideas, best practices and leadership stories from across the global India in Supply chain world to our listeners.
[00:09:29] On behalf of the entire Supply Chain Now Radio team, this is Scott Luton. Thank you for joining us. And we wish you a very successful week. Thanks a lot.
Upcoming Events & Resources Mentioned in this Episode
Help with Hurricane Dorian Relief: https://www.alanaid.org/
Trade Deal Update: https://tinyurl.com/y3mvfa4g
GM Strike Update: https://tinyurl.com/y47rcse9
Driver Layoffs: https://twitter.com/TimothyDooner/status/1183444366045650944
Food Waste Innovation: https://tinyurl.com/y2wldxan
IBM Launches Blockchain Supply Chain Service: https://tinyurl.com/yxm454t5
Article 1 on Target & Toys R Us: https://tinyurl.com/yysgu2yn
Article 2 on Target & Toys R Us: https://tinyurl.com/yyvqmwd8
Connect with Scott on LinkedIn: https://www.linkedin.com/in/scottwindonluton/
Follow Kelly Barner & Buyers Meeting Point on Twitter: https://twitter.com/BuyersMeetPoint
Follow Logistics Trends & Insights: https://twitter.com/LogisticsTI
Follow Supply Chain Queen on Twitter: https://twitter.com/supplychnqueen
Follow Tim Dooner on Twitter: https://twitter.com/TimothyDooner
SCNR to Broadcast Live at SC Logistics 2019 Fall Tech Talk: https://tinyurl.com/y2mttrg8
eft Logistics CIO Forum in Austin, TX: https://tinyurl.com/y5po7tvw
SCNR to Broadcast Live at CSCMP Atlanta Roundtable Event: https://tinyurl.com/y43lywrd
Reverse Logistics Association Conference & Expo: https://rla.org/calendar/1
SCNR to Broadcast Live at MODEX 2020: https://www.modexshow.com/
SCNR on YouTube: https://tinyurl.com/scnr-youtube
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