Supply Chain Now Episode 283
The Supply Chain Buzz Series
Sponsored by The Effective Syndicate: www.TheEffectiveSyndicate.com
In this week’s episode of the Supply Chain Buzz, Scott Luton discusses the top things to know in supply chain in 15 minutes or less!
[00:00:08] Good morning, Scott Luton here with you, Liveline Supply chain now. Welcome back to the show. In today’s show, we’re continuing our Supply chain Buzz series, a brief weekly look at some of the top news and trends across the global. In the end, Supply chain community all in 15 minutes or less. Today’s episode of the Supply chain Verusen Supply chain now is brought to you by the Effective syndicate, a leading coaching and consulting firm that helps companies win by optimizing process and developing winning cultures.
[00:00:41] Give both Groover and his team a call and you can learn more at the effective syndicate. Dot com is Monday, February 17th, 2020. It is the forty eighth day of this leap year. Did you know this day in 1867, the first ship passed through the Suez Canal? Today in Libya, it is Revolution Day and today in the United States, Canada, the U.K., Germany and the Netherlands. Today continues Black History Month. So now let’s get to the buzz. Let’s start with an update on the Corona virus in our first story this morning. Coming to us from Kostis, Paris, over at The Wall Street Journal, as you might be expecting, shipping activity in China has fallen off dramatically. The article included this view from Lars Jensen, who leads research group C. Intelligence, quote, Substantially less cargo is being moved from China and the rest between China, rather, and the rest of the world. Last week we had an additional 30 sailings canceled with 23 across the Pacific and the rest to Europe. In quote, Jensen mentioned that the canceled sailings over 50 since late January may well slow may slow down. Traditional retail restocking of inventory for spring and container ship operators are signaling a big impact on financial performance. Five operators in particular are saying they are getting profit warnings prepared instead of capitalizing on the trade deal between the U.S. and China to regain some recent losses. Container ship operators are getting hit hard with the coronavirus ripple effect, even for the sailings that aren’t canceled entirely. Some ships are leaving Chinese ports. Only 10 percent fall, but inbound shipping has been impacted as well. Companies shipping goods into China are facing challenges as many dock workers aren’t back at work and handling goods due to the virus outbreak.
[00:02:45] So ports are beginning to see backed up cargo at terminals and warehouses across China. Resilience 360, which monitors risk across global supply chains, was also quoted in the article as stating that congestion is, quote, due to inbound shipments that have either not been cleared by customs brokers or for which delivery and pickup services could not be arranged. In particular, U.S. agriculture exporters are being warned to ensure their ocean carriers can store their goods on arrival in China, especially those items like meat and fruit that need refrigeration. Some shippers are claiming there are even shortages of power plugs for refrigerated containers due to a variety of factors. Even the shipbuilding industry expects to get hit. China, which is the world’s largest ship builder, had about 960 vessels on the docket to be built or repaired in 2020. The China Association of National Shipbuilding Industry stated that 200 of those deliveries may be in jeopardy. Let’s continue our coronavirus update, especially from a supply chain perspective. But let’s talk about some of the biggest industries hit with setbacks and challenges, according to a story from Steve Banker, a contributor to Forbes. It’s been the high tech pharmaceutical and automotive industries that are seeing the greatest impacts. Speaking specifically to the impact on high tech, Foxconn is still not at full production, which made the LEI the launch of the next iPhone beyond Apple. Other firms that have been impacted in high tech include Dell Technologies, HP, Qualcomm, Samsung, amongst others. Many of these high tech companies are attempting to shift orders elsewhere, but that’s tricky due to the status and location of quality and production engineers, many of which certify the quality levels of production.
[00:04:45] Getting this engineering talent back in place and stood up both at primary and alternative production sites will take some time. We’ll continue to monitor the situation and report own developments for our third story on the Supply chain buzz today. Let’s share some good. News on a much lighter note. So according to a story over at Supply chain Management Review, January looked to be pretty strong for retail in the U.S. based on insights and analysis from both the U.S. Department of Commerce and the National Retail Federation. Consider the following January 2010 Twenty twenty retail sales, which were at five hundred twenty nine point eight billion, were 0.2 percent ahead of December twenty nineteen numbers and 0.3 percent up over January. Twenty nineteen. Total retail sales from November twenty nineteen through January twenty twenty were up 4.4 percent over the same period the previous year. And looking at Keith sectors online and other non store sales were up 7 percent year over year. General merchandise stores were up 3.3 percent year over year. Grocery and beverage stores were up 2.9 percent year over year. And finally, furniture and home furnishing stores were up 2 percent year over year in January 2020. We’ll see how February and first quarter 2020 play out in store number four here on The Buzz. Let’s switch gears and talk smart buildings and top talent in a story coming to us from Tovah Cohen at Reuters. Intel is looking to use smart buildings in Israel chock full of perks and benefits to compete for top talent.
[00:06:34] So let’s share some background first, Intel, the U.S. chipmaker is one of the biggest employers and exporters in Israel. Israel is home to more startups per capita than other all other nations in the world. Yet the country is dealing with a major shortage of talent. 17000 tech positions went unfilled in 2018. Multinational firms such as Apple and Google have been strong competitors to Intel when it comes to finding and hiring these high skilled tech workers. Now back to the central story here. As Intel has invested a reported 188 million dollars in a smart building in Tel Aviv to help its talent acquisition efforts. Amongst the building’s amenities are 14000 sensors that monitor motion, light and air, ensuring the comfort and convenience of the workforce. For example, when carbon dioxide levels rise, fresh air is introduced to keep people energetic. Also, for those employees looking to avoid the lunchtime crowd, the sensors and corresponding app can also help Intel team members know which of the building’s three restaurants has a waiting list. The 10 story building is LEED Platinum certified, the top standard in green construction. It has a double skin exterior that not only improves ventilation, but it helps keep the building cool from the considerable Middle Eastern Sun. African Holdings, a construction firm that built the smart building, has said other companies and countries have taken notice. So they have other similar projects underway. For our fifth and final story here on today’s Supply chain Buzz, we’re discussing the changes over at Rent the Runway Inc.
[00:08:24] Coming to us via charity, Scott. The Wall Street Journal, the growing this growing clothing rental company is hoping to avoid supply chain issues that stopped orders in their tracks a few months back. Rent the Runway has hired Brian Donato, formerly of Amazon, as chief Supply chain officer, and they’ve added a second former Amazon leader Mike Roth to the board rent there one the runway launched in 2009 as an online service where customers paid to rent an evening gown or special occasion apparel. Since then, it has added monthly subscription plans and it’s rolled out new offerings to include things such as workwear, accessories and children’s clothing. Items, of course, can be shipped back in exchange for new ones after they’re worn. But due to a surge in popularity and orders rent, the runway hit major snags that focused on delayed shipments and long customer service wait times. In fact, the problems hit a point where rent their one way temper temporarily stopped accepting orders and new subscribers beyond the two former Amazon leaders that have joined the Supply chain team. The company has also added Michael Andrew Saño, a senior transportation executive formerly with Wal-Mart, Amazon and FedEx. So what a dream team. We’re going to watch him for the impact as the company continues to grow. It’s one quick note before we wrap the Supply chain now teams holding our first love interactive form, part of our new stand up and Soundoff project on March 25th, sponsored by our friends over at E.M.T.
[00:10:05] And reuters’ events. We are flipping the script for this event. Our audience will be the star of the show. Their insights, observations and perspective. Your insights, observations and perspective is what will drive the conversation. Greg White and I will simply serve as moderators posing questions to our audience and passing the mike, so to speak, around what promises to be a passionate global crowd. So be sure to register as Spotts will be limited. Find more information on the Webinars tab on our Web site supply chain. Now radio dot com. And I’ll also include a direct link in the show notes of this episode. There you have it. That’s a wrap for today’s episode. Several of the leading Supply chain news stories and trends right here on the Supply chain Buzz on supply chain. Now you’ll find links to each of the stories that we featured today on the show. It’s for your convenience, including a few additional resources. Big thanks to today’s sponsor of the Supply chain Buzz. The Effective syndicate be sure to check them out at the Effective syndicate WSJ.com to our listeners everywhere from Kyle in Grand Rapids to Raje in New York City to Brock in Toronto. All points in between. Thank you for your continued support and listenership.
[00:11:17] On behalf the entire Supply chain Now team. This is Scott Luton. We wish you a very successful week ahead. And thank you for joining us on the spot Jimbo’s. Thanks, Abi.
Scott W. Luton is the founder & CEO of Supply Chain Now Radio. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and was named a “2019 Supply Chain & Logistics Expert to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. He also serves as an advisor with TalentStream, a leading recruiting & staffing firm based in the Southeast. Follow Scott Luton on Twitter at @ScottWLuton and learn more about SCNR here: https://supplychainnowradio.com/
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The Latest Issue of the Supply Chain Pulse: https://tinyurl.com/s868l7x
China Shipping Plummets: https://tinyurl.com/sopfvvk
High-Tech Industry Hit Hard: https://tinyurl.com/vg9cvxb
Strong Retail Numbers for January 2020: https://tinyurl.com/s8hq38k
Intel Uses Smart Buildings for Talent: https://tinyurl.com/tnpaqo5
Rent the Runway Hires Supply Chain Leadership: https://tinyurl.com/stn9s7z
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