In the first episode in the Supply Chain Buzz series, Scott Luton discusses the latest topics in supply chain- retail supply chain challenges, green shipping, and logistics spend.
A good morning and Scott Luton here with you, live on Supply Chain Now Radio. Welcome to the show. In today’s show, we’re continuing our newest series, The Supply chain Buzz, a brief weekly look at some of the top news and trends across the global India and Supply chain community. All in 50 minutes or less. Today’s episode of the Supply chain Buzz. Supply Chain Now Radio is brought to you by Apex Atlanta, a professional industry association serving the metro Atlanta community for over 50 years.
[00:00:37] You can learn more at AP6 Atlanta doored. It’s Monday, October 7th. Did you know on this day in 1826, the Granite Railway began operations in Massachusetts, becoming the first commercial railroad in the United States? Also on this day in 1919, KLM Royal Dutch Airlines was founded in the Netherlands. It is the oldest airline in the world still operating under its original name. And now let’s get to the news as we assembled these five stories today. We reached out to several big supply chain industry influencers and subject matter experts to get their take on the biggest stories from this past week. Our first story was recommended to us by Sherry hanish, a.k.a. the Supply chain Queen. And it focuses on the popular clothing rental company Rent the Runway Were which happens to be losing its chief supply chain officer, Marv Cunningham. In case you didn’t know, with rent, the runway services work something like this. First off, you let them know the date of your event where you’re gonna be needing formal wear. They then let you know what clothing options are available. You then choose from those selections. You give them give them your sizes and then they get the clothes out to you in time for your event. Typically, two days prior to the event, of course, after the event, you then send the garments back. Once you’re done, evidently the company has encountered challenges with its fulfillment of the orders in recent months, leading to hundreds of customer complaints, mostly on social media.
[00:02:05] Rent the Runway CEO Jennifer Harman explained in a Business Insider news article that the company has implemented a wide variety of corrective actions, both internally and to the disappointed customers. Harman also mentioned that the root cause of the problems were related to a new system that was installed on September 13th at its New Jersey warehouse. The implementation apparently triggered problems with the company’s fulfillment processes and began to impact the quantity of orders that could be shipped each day. We’ll see how the company figures out its Supply chain crisis, but looks like it will be with being led. Its response can be led with new Supply chain leadership. OK. Our second story comes to us from a Supply chain dive article. The retailer Bed, Bath and Beyond is kicking off a massive effort to reduce hundreds of millions of dollars from its cost of goods. The plan includes reducing overall store inventory by 1 billion dollars, closing about 60 stores, cutting back on staff, utilizing markdown optimization software to help get rid of excess inventory. New sourcing practices will be utilized as well as current vendor negotiations. Interim CEO Mary Winston cited a big opportunity for margin improvements related to changing how Bed, Bath and Beyond sources its private label on. Currently, it’s mostly sourced indirectly, so the company sees an opportunity to cut out some of the dollars spent on intermediary tiers of suppliers.
[00:03:34] As we continue to discuss in our Procurement Pros series with Rod Sherkin here on Supply Chain Now Radio, the role of procurement continues to become more more critical across global and in Supply chain. The procurement pros at Bed, Bath and Beyond seemingly have their work cut out for him. For our third story here on The Buzz, we received a tip from the wonderingly Tim dunner over freight waves. One of Tim’s colleagues, Clarissa Halls, has been covering an very interesting story that involves a recent settlement between Transport America, a Minnesota based trucking company, and one of the drivers, Matthew Ellison. The U.S. Equal Opportunity Commission filed suit against Transport America on behalf of Mr. Ellison, citing a.D.A violations and the carrier’s failure to make reasonable accommodations. The driver, Mr. Ellison, uses a service dog that helped treat his social anxiety disorder and depression. He had notified the carrier of his need for his search service animal to accompany him at all times. However, the carrier applied its current dog policy to the to the situation, which charges fees to its drivers that bring animals in their trucks to cut the carrier transport. America chose to settle the matter at the court for twenty two thousand five hundred dollars and agreed to change its policies to allow drivers with disabilities to have a service animal Rod along without being charged. OK.
[00:04:57] Sticking with the transportation theme. Our fourth story centers on ocean carriers and some of the seismic shifts that lay ahead for the industry cost Paris with the Wall Street Journal wrote an outstanding article on just how difficult of a task ocean carriers have in their efforts to incorporate Greene shipping. For starters, beginning, as we all know, in January 20 20, some 60 thousand ocean going vessels will be obligated to cut their sulfur emissions by more than 80 percent. To do this, most are switching over to new low sulfur fuel. But at a huge cost. Industry executives claim this change alone will add some 50 billion dollars in transportation costs over the next three to four years. Beyond the 20 20 changes, the international shipping industry has committed to lower greenhouse gas emissions by half come 2050. But as of right now, the industry lacks sufficient new propulsion technology and the innovative fuels to be in position to reach these gains. Ocean carriers moved from coal to heavy oil in the early, early 20th century. Most industry leaders tend to agree that hit these aggressive goals. A similar big shift will be required. New propulsion approaches are being tested now. Ammonia is being looked at on some small ships currently, and while using ammonia produces no carbon emissions. There are two big drawbacks. Transforming ammonia into fuel is very carbon intensive and there’s huge concerns around its toxicity. Batteries are also being tested, especially in northern Europe and Japan.
[00:06:34] And of course, biofuels derived from cooking oil and forest product residues are also being considered. Regardless, one of the big supply chain challenges related to the overall new fuel search, just like heavy oil, which is called bunker, which is now widely available at ports globally. Any of these new fuel sources would have to be just as available. In our fifth and final news story today here on The Buzz. Let’s talk technology investment in Logistics. Coming to us from Supply chain Digest. Bob, the numbers article from last week, major dollars are being invested by Logistics firms globally into more, more technology. Three P.l. Giant DHL will spend 2.2 billion dollars on technology through 2025. Huge focus for them is on improving capabilities that will drive e-commerce fulfillment. C.H. Robinson Worldwide stated in September that their company will spend one billion dollars over the next five years in technology. Xpecial Logistics recently stated its plan to increase capital spending from five hundred four million dollars in 2017 to over 650 million dollars this year in twenty nineteen for. Most of that increase will be invested in technology gains. On a related note, leading global three P.l. Cook County Logistics just released just released research that was conducted in partnership with third party market research firm Martek. Chief among the findings, the research revealed that a balance of 60 percent technology and 40 percent human expertise is needed to optimally manage supply chains.
[00:08:12] To better understand how shippers and carriers can strengthen efficiencies in their supply chains, the research gained input own and analyzed 13 tasks in an effort to determine which tasks were better served by technology and which were better served by humans. Christina bottas, chief marketing officer at Khalida Logistics, stated, quote, The best results happen when technology and humans are all working together as we focus on keeping up with the changing demands of the market and consumer. Neither can exist in a silo in quote, I’ll say that as well put and well said. So there you have it. Several of the leading supply chain news stories and trends right here on the Supply chain Buzz. Supply Chain Now Radio. You’ll find links to each of the five stories on the show. Notes for your convenience. On a side note, we hope to see you this Wednesday at the Georgia Manufacturing Summit right here in Atlanta or on October 23rd at the South Carolina Logistics Tech Talk event in Charleston. You can learn more about these events and many others on the upcoming events tab at Supply Chain Now Radio dot com. And while you’re there, be sure to check out all of our other series and podcast as we continue our mission to bring new ideas, best practices and leadership stories from across the global India in Supply chain world.
[00:09:29] To our listeners, 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.
Upcoming Events & Resources Mentioned in this Episode
Help with Hurricane Dorian Relief: https://www.alanaid.org/
Rent the Runway Supply Chain Challenges: https://tinyurl.com/y4fl5pr4
Bed, Bath & Beyond Supply Chain Challenges: https://tinyurl.com/yyplq2ag
Transport America Settlement: https://tinyurl.com/y6xa5nbe
Ocean Shipping Going Green: https://tinyurl.com/y3osf52o
Logistics Tech Investment: https://tinyurl.com/yy6lhted
Coyote Logistics Research Report: https://tinyurl.com/y68mzkha
Connect with Scott on LinkedIn: https://www.linkedin.com/in/scottwindonluton/
Follow Supply Chain Queen on Twitter: https://twitter.com/supplychnqueen
Follow Tim Dooner on Twitter: https://twitter.com/TimothyDooner
Georgia Manufacturing Summit on October 9th: https://www.georgiamanufacturingalliance.com/annual-summit
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
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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