Supply Chain Now Episode 387
The Supply Chain Buzz features Scott and Greg as they discuss the top stories in supply chain this week.
Intro – Amanda Luton (00:05):
It’s time for supply chain. Now broadcasting live from the supply chain capital of the country. Atlanta, Georgia heard around the world. Supply chain. Now spotlights the best in all things. Supply chain, the people, the technologies, the best practices and the critical issues of the day. And now here are your hosts.
Scott Luton (00:29):
Hey, good morning, Scott Luton here with you on supply chain. Now, welcome back to the show. Uh, Greg white, the supply chain buzz back again. Same place. And same time finally.
Greg White (00:41):
Yes, that’s right. We are back on schedule, right? We are. We’re not deterred by COVID.
Scott Luton (00:50):
That’s good. That’s good to know. And we’ve got some good news in that regard today, which we’ll tackle here momentarily. Uh, take the kids are attacking the home studio this morning. So bear with me
Greg White (01:02):
Funny story for you, Scott. I have not watched a lot of Television news or, I mean, they’re pretty much doing it the way we’re doing it. Right. But I saw somebody, I can’t remember who it was, but they were like, they were like swatting at somebody in, I thought they were swatting at something around their head and it turns out it was their kid. And then I heard their dog barking.
Scott Luton (01:28):
Greg White (01:28):
On CNN or I think it was CNN. Oh my gosh. It was hilarious.
Scott Luton (01:32):
I feel that pain. I feel that that’s right, but it is a good pain. It is a good pain, nothing like working from home and, and connecting with our audience with, in the midst of loved ones and kids and dogs, you name it. So, uh, Greg today is all about supply chain buzz where you and I take a scan of the headlines. We picked some of the more important developments and, and we give our audience, uh, our take beyond the facts and figures are take kind of what it means. So looking forward to that, as we attempt to raise everybody’s and elevate everybody’s supply chain IQ, Hey, before we get started and we see Don and Stephan and Jeffrey, uh, already with us here on LinkedIn, hope, each of you are doing well quick programming before we get started here. If you like today’s live stream, check out our podcast, wherever you get your podcasts from today, we publish a second episode of a new series for us this week in business history. And Greg we’re simply, you know, kind of looking over the next seven days. And, and while going back in history to figure out some of the greater happenings related to business and a little bit of daba of global supply chain from time to time and that, um,
Greg White (02:42):
I, you know what I haven’t gotten to listen to this. This is the cobbler’s children have no shoes, right? I haven’t gotten to listen to your episode from this morning yet, but I think people also ought to, if you don’t follow Scott or supply chain now on Instagram, you ought to and get 60 seconds of supply chain, because that is really cool. Somehow he manages to put a new dog in the shot.
Scott Luton (03:07):
That’s all right. We love our dogs around here. So thank you for that. Thank you for that, Greg. So on this one last note here on this, on today’s podcast, we’ll publish today. This week in business history, the universal product code was the main focus and the history of that. Yeah know, these days, barcodes are everywhere beyond retail, beyond e-commerce or use so many different ways. And if you tune into that podcast, you’ll, you’ll get a sense of the background there. So check that out wherever you get your podcasts from. All right. So let’s walk, let’s walk, man. A few folks, uh, Greg, that we have already mentioned, uh, of course, Don Don hope is finds. You will saw your, your, a hike up stone mountain. Once again. Hope that went well. You had some beautiful weather. I believe Greg, our friend, Stephan from Texas all week, you can’t, you can’t have a livestream Stephan, right?
Greg White (03:56):
No, you can’t. Actually, I owe him a discussion. So we were supposed to talk this weekend, supply chain stuff and we didn’t get to connect father’s day things.
Scott Luton (04:08):
No on time delivery there for you, Greg. All right.
Greg White (04:11):
I am I’m uh, I’m in imposing force mature because
Scott Luton (04:17):
Alright. Hey Jeffrey Miller Miller. Great to see you, I guess your base in North Atlanta and great to have you on LinkedIn, of course, a memory from our, uh, from South Africa. Great to have you here from freezing Johannesburg. She says, Greg.
Greg White (04:31):
Yeah. It’s easy to forget that it is winter in the Southern hemisphere, but my relatives from Argentina where there it is just sent pictures of ice. I mean just ice hanging from the trees. Really? Yeah. They’ve gotten pretty cold weather in the Southern hemisphere.
Scott Luton (04:49):
Hmm. Bob Morris is tuned in via YouTube. Again, Rob. Great to have you again. I think you were with us last week as well. So welcome back. Um, so Greg, with all that said I ready to dive in.
Greg White (05:02):
Let’s do let’s to the first off here.
Scott Luton (05:06):
Yeah. So first off one little trivia factoid here, cause I’m a big trivia nerd, uh, guilty as charged. So today is Monday, June 22nd, 2020. And it’s got a lot of relevance to today’s business world and supply chain world. Where would we be without computers? Right on June 22nd, 1910 Conrad Zeus was born a German civil engineer, computer scientist, and businessman. Zeus was most known for inventing the first and bear with me here, Greg, the first working programmable, fully automatic digital computer known as the Z three slot of there, which was completed in 1941. So we, uh, we judge computers by how fast they are. Right, right. One of the ways. Alright, so it’s average calculation speed. For addition functions was 0.8 seconds. Multiplication, which clearly gave the [inaudible] as much trouble as it gives me. It took it three seconds from multiplication functions. It’s program code was stored on punched film and it weighed more than a ton, highly mobile hope. Some folks will say though, that Conrad Zeus was the inventor of the modern day computer. Arguably, he passed away in 1995 and I stole, I sourced this quote that was attributed to him, which I find interesting, the danger of computers becoming like humans is not as great as the danger of humans becoming like computers.
Greg White (06:40):
Well, we have seen the former and pretty much the opposite of the ladder. It’s almost as if we have a shared logic because we know that the computers can take care of that now.
Scott Luton (06:52):
Right. That’s right. Yeah. Very interesting. Can you imagine
Greg White (06:56):
Best and computers do what computers do best?
Scott Luton (06:59):
Can you imagine having a room full of equipment and uh, the lack of a complex problem is what you could solve with. I mean, you had to start somewhere. Computing had to start somewhere. Right? Right.
Greg White (07:13):
So the reason why we’re here, you know, the complexity of those addition or multiplication calculations as well. Good point. I mean, it may not have been three but three times five, which 15?
Scott Luton (07:28):
Very nicely done Greg as always. Uh, but on this day, Conrad Zeus was born in 1910. Alright. Before we dive into the, the buzz, the true buzz and the stories of the day, want to say hello to a few folks. Let’s see here. Uh Mohsen is tuned in via LinkedIn. Hope. This finds you well, great to have you here today. Uh, Brian Starn let’s see here. Yeah. Brian stains from Rochester, New York. Hope this finds you well, Brian, uh, up in New York via LinkedIn.
Greg White (08:00):
That’s a good, that’s a good supply chain school up there. Yes, it is. To the technology.
Scott Luton (08:06):
Robert gains a little further South Robert Gaines Hills from Charlotte and tuned them via LinkedIn. Great to have you here. Um, and let’s see here. So most of that says he can’t hear us. So just double check, maybe refresh the, the channel that you’re own or you’re tuned in. It could be a little glitch there, but, but let us know. And Amanda and clay though,
Greg White (08:28):
That’s fun. What’s that? He’s getting some advice from Stephan. Oh, okay. Mute the player. It might be a lot of times it comes on muted. Yeah.
Scott Luton (08:39):
A one file
Greg White (08:40):
Or define the mute button or the volume
Scott Luton (08:44):
One final comment from T squared, 2001. Hello from Baltimore. Thanks for the podcast on reverse logistics. Took me all the way back to my MBA course in two and 11. Good stuff there. Hey, we love reverse logistics here at supply chain. Now
Greg White (09:00):
Impressive thing is T squared. Hasn’t has an MBA.
Scott Luton (09:05):
Greg White (09:08):
I’ve had it since 2011. So
Scott Luton (09:10):
Love it. Yeah. Alright. Some knowledge to us. Well, what will be impressive, Greg is if I can get the name of this drug, right. As we walked through this first story, we’ll see. So we’re going to dive into the buds with a quick scan of the headlines, you know, kind of cherry picking some of the more important ones. And then we’re all going to scan the headlines at the end of the show too, but leading off Greg white don’t you love a story where a big part of the narrative is about how robust the supply chain is. Yeah, love it. Right. We need a lot more of that. So in this story from Katherine Ellen Foley, over at quartz, we’re talking about a, uh, a potential treatment for COVID-19. And as I mentioned, the robust supply chain behind it. So a generic steroid called dexamethazone male dexamethazone. I had to say, I had to practice at the last three weeks. I had shown the ability to effectively treat some of the sickest patients. Now data is still very preliminary as it is with a lot of these, uh, these research studies going on right now. And it’s not yet been peer reviewed, but it’s already been through safety trials. So we may not be far from healthcare practitioners using this to treat, especially the sickest of patients. More than that in a second.
Greg White (10:30):
Yeah. I think they’ve offered this. Well, maybe you’re going to go here. I’m going to let you go. And then I’ll.
Scott Luton (10:37):
So the best news is unlike what we’ve seen with PPE and toilet paper, and a lot of the things with this surge in demand, a lot of the supply chains have just not been able to keep up. However, dexamethazone supply chain seems ready to handle the off the charts demand. So given the shortage sorted shortages, we’ve seen with some of the drugs used to treat COVID-19 of course, this is some really good news. So consider this, this drug’s already been on the market for six years and it essentially is generic at this point, which is a great thing. So many factoring plants all around the world already make it and can ship it. So we’re not tied to just that a constraint of one location experts say it’s easy to manufacture, especially in pill form. And one more thing, the research show that dexamethazone is most effective for the sickest patients, you know, those ventilators. So no data yet, if the drug would be able to treat other less sick patients, but at that holds up that might help help temper demand for folks that are treating COVID-19 by just staying at home. You know,
Greg White (11:44):
I think it’s a couple of things that’s important to note here. This is not a vaccine. This is a treatment. It was, uh, tested voluntarily on patients who were originally essentially on their death beds and it was an optional treatment for them. And it did actually arguably, I mean, again, we’ll let the medical professionals speak to the details of this, but it did save lives. So that’s actually very encouraging, right?
Scott Luton (12:15):
Yup. Very encouraging. Uh, Hey, the more options, the better and more weapons we can have to fight this thing globally, the better. And in particularly as, as, as kind of the main thrust of the article is for this, if this holds up and if the data holds up and if all things appear as they are to have, uh, one option, have a lot of the great advantages of the supply chain as we’ve laid out here for dexamethazone that’s a great thing. All right. So let’s to the day, Scott, Hey, we try to start with good news. Good news is really important. Um, let’s take a few comments before we dive into this next topic here. So T squared, he got his MBA at Morgan state university. No way. Uh, one of our interns is matriculating through, if I can say that word, right? The supply chain program at Morgan state, we’re big fans.
Scott Luton (13:09):
So great to have you here with us via YouTube there. Um, also Brian shares that he discovered our podcast and last six weeks found them very insightful. Thank you for that. Brian, appreciate you tuning in. I appreciate your feedback for sure. Yeah. Thanks. And one more note, you know, uh, just like, uh, T squared loves reverse logistics. Uh, any, any of our folks that are tuned in be the today’s live stream, let us know what topics you find most compelling and shoot a set note. And we’ll see if we can’t target guests and companies and, and experts around those areas.
Greg White (13:43):
So we have been getting some requests right from folks. So we’ll talk about that a little bit later.
Scott Luton (13:49):
Yep. Alright. So from healthcare to FedEx ups, of course, we’ve talked about both of these companies a good bit, especially in recent weeks because of the surcharge changes, you know, that we keep our, we try to keep our eyes on. So let’s talk May, 2020 metrics for ups and FedEx. So according to this story, Matt Leonard over at supply chain dive says the on time performance rates for both FedEx and ups dropped to their lowest monthly averages thus far in 2020. So for may. And so as you can tell a little bit of a lag here, but for may, those rates came in at 91% for FedEx and 95% for ups. So according to the article, FedEx is performance took a bigger hit due to its decision to shift SmartPost volume from the us postal service into its internal network at the beginning of the year. And as the pandemic surgeon volume began to hit FedEx, didn’t have the opportunity for that advanced planning and preparation much like what into, you know, planning for peak season. It just hit a, so that was a big factor in the disparity between on time delivery rates, as pointed out by the story, Greg, your take,
Greg White (15:02):
Well, this story addresses that there are two different measures actually. And I think Scott, you pick the one that arguably is the more accurate of the two or at least the more defensible of the two. Um, so yes, and actually I’ve had a discussion with a number of folks, including our good friend, Kevin Taylor from FedEx, um, who’s um, in a principle in the FedEx supply chain organization. And of course everybody knows supply chains were caught off guard by the seismic societal disruption of all of the lockdowns and sending everyone home, plus the difficulty of getting people to work, even if they were healthy because of it’s, you know, it’s almost like people are so ready to go back to work. Now that we forget that people were afraid to work for a time because they were afraid to be in the workplace or out of their home.
Greg White (15:55):
And, you know, in contract the virus at the same time, I think there is still a lot of opportunity for the traditional carriers and this one only mentions really FedEx and ups, but Amazon also struggled. Um, but I think one of the questions we have found recurring over time is, is can the traditional carriers flex up and can they provide last mile delivery because e-commerce volumes went up so substantially can they do so cost-effectively and I think your question, at least for me still lingers and I I’ve heard, I’ve heard the discussions and, and, um, points made by many, many people in the industry and I don’t disagree that everyone was caught off guard and that there’s a good reason for it. It seems like by may, we should have been closer to recovered, right? I mean, we are talking two months after all of this started almost so that’s, that’s still a little concerning to me. I don’t think it’s, I don’t think it even indicates so much as a crack, but what I think we’ve got, we’ve got to consider is that if e-commerce this surgeon e-commerce continues and I think we all believe that it will, that eventually these carriers are going to have to find some level of, of cost-effective scalability for their supply chains when peaks occur. Right?
Scott Luton (17:17):
Yup. So we’ll keep track and we’ll see, we’ll see, you know, uh, many of these consumer buying patterns, as we’re gonna talk about in a couple of stories down the road, they aren’t going to change and we’re seeing supply chains adjust on a more permanent basis. But because of that, so naturally, uh, these main line, um, uh, carriers are gonna have some challenges, right? I mean, and, and on top of it all beyond the healthcare side, we we’ve seen a lot of other factors that have, have, have posed challenges in the, getting into certain markets. So we’ll see how it goes from here. June numbers will be interesting is that as those come in the next two or three weeks and, um, uh, we welcome your feedback on this, this critical topic. Alright, so Greg, we’re going to take a deep dive into, to, uh, I’ve got here, wonder twin powers, activate Shopify and Walmart are teaming up, right?
Greg White (18:09):
Yeah. So originally this was presented just as a, Hey, they teamed up and it kind of made, made the Shopify stock bump on Friday a bit. And I think it’s, I’m not looking at the specific numbers, but I think it’s surging up also today about around a percentage point last I looked, but the point of this is bigger than that. It’s bigger than even the share price today. It’s it’s what does this create in terms of viability for these two companies going forward? Because of course we all know, at least in the States and the Americas, what the big, the big player is Amazon, right? And Walmart and Shopify individually have both been trying to peel away some of that business. And because of some of Amazon’s struggles and arguably self-inflicted offenses, whatever you want to call that, um, sellers have been looking for an alternative.
Greg White (19:06):
They’ve been looking for an alternative for a long time, but they’ve been starting to flock away. And Shopify has been where a lot of the big sellers have gone because it’s relatively easy to get live. Walmart had a 74% uptick in e-commerce in the several of the weeks of the, of the pandemic. Um, and, um, these two companies have been talking off and on for literally years about putting something together. Now, what Walmart is going to do is they’re going to enable Shopify sellers to sell on the Walmart marketplace, which is, um, a very large marketplace Shopify also very large to give you an idea. Walmart wants to put just 1200 Shopify sellers on the Walmart platform. And the reason that the number isn’t big is because the numbers of sales are big because some of these are major, major sellers brands selling direct to consumers and that sort of thing.
Greg White (20:04):
But, um, to give you an idea of the scale of Shopify 75 million products, and even with the growth, I just discussed this, uh, stated on Walmart, Shopify sales have been growing faster than Walmart, and it’s more profitable because the sellers pay a fee and handle delivery, uh, for themselves. So, um, there’s, Walmart has really been trying to expand both the scale and the profitability of their e-commerce, which is 21 point $5 billion in sales. So there’s a lot of opportunity and upside for them. Um, the two companies are coordinating on, on fulfillment. Um, uh, Walmart allows in store returns of any Walmart marketplace seller, and they’re working on varies others, other, uh, services as well. So, um, you know, I don’t know if everybody realizes this, but Shopify while in the news lately has been around since 2006. Um, you can start on there for as little as 29 bucks selling merch, but really got to go. He’s going to go to the link right now and start selling supply chain now. Um,
Scott Luton (21:27):
Sorry, am I must be that transparent? I actually did pull it up and we’ve got our first hat ready to be ready to get packaged and shipped out. Yeah.
Greg White (21:37):
Yeah. We’ve got an intern that’s waiting on that hat. Actually, if you’re an intern, you get the hat for free. That’s right. It’s all part of the bonus. Um, but you know, um, Walmart had been struggling since kind of 2009. I don’t know if anyone remembers they bought jet.com and then they put a, was it Doug Lee? Sorry, Mark lore. Mark lore in, in charge of who was the CEO of, of jet.com in charge of Walmart e-com after Doug McMillan came on as CEO in 2014. So, um, in 2016, when they bought jet, they really started to ramp up. It’s actually, it’s a very good marketplace. Uh, you know, um, there are sellers you can buy from Walmart, from other big sellers and also from individual sellers, they’ve recently done a revamp to vet a lot of their sellers really, really carefully to make sure that the product of the seller or the quality of the seller and the quality of the product are both good.
Scott Luton (22:39):
Yeah. You know, it, it seems to be inevitable between the investments Walmart’s been making in terms of acquisitions of jet.com in terms of leadership coming on in terms of new partnerships with major players like Shopify, clearly their brick and mortar, uh, footprint they’ve got is a huge advantage. They just rolled out the, uh, the two day delivery service. Like I can’t remember what they called that to compete more directly with Amazon prom. It seems like Greg it’s inevitable before they really cracked the code and challenge Amazon even more successfully. I don’t know,
Greg White (23:13):
But it is inevitable. I would argue. I would agree with that. It is completely inevitable. First of all, they’re a much larger company. Amazon is capitalized better because their stock price is much higher, but in terms of pure sales, Walmart is a much, much bigger retailer. So, um, and they have a really strong and aggressive supply chain culture. A lot of the advancements that we talk about today have been around at Walmart for literally decades. Things like collaborative planning, forecasting, and replenishment that was initiated by Walmart, the concentric circles of stores around distribution centers to optimize distribution. That was a foundation of, of Walmart supply chain. That’s still a mystery to some retailers, which is a little bit stunning, but Walmart is, has a highly efficient supply chain. Their stores are effectively mini malls. You can go to subway, gets your haircut, you know, nails done, whatever else you want done there. Um, even healthcare, there is a store about five miles from my house. Walmart has their own healthcare facility in that store and it is glorious. I should take a video of it. Um, but it is amazing doctors, dentists, dermatologists, all the DS and, and, um, all kinds of healthcare there along with pharmacy. So, um, it’s really interesting. It kind of hurts me a little bit, frankly, to gush on about Walmart, but you know, if the question is, do they have the wherewithal to compete? They absolutely do.
Scott Luton (24:57):
Yup. Hey, if we could, uh, let let’s let’s, uh, first off, when I read this comment from Stephen, in his opinion, Walmart has the advantage since their stores also serve as DCS. So their DCS make money just by being a store. And now on top of that, they can sell online good stuff there from Stephan, Hey, uh, clay and Amanda, um, and to our listeners. Hey, tell us about your experiences with Walmart. E-commerce, you know, let us know, especially if you’ve seen gains in the last year or so, as some of these advantages have started to come to a head I’d love to, I’d love to, uh, we’d love to dive in and share some of those. So Amanda and clay, as we get any comments around Walmart’s eCommerce experience, maybe we just cut and paste them. We can share them at the end. That makes sense. You
Greg White (25:42):
Quick point on the wall. Yeah, let’s do that. And a quick point on the Walmart, um, marketplace it’s invite only, you don’t just sign up. And in fact, the numbers, the quality items that I was talking about, they pulled 20 million off in the last, uh, well, just in the last couple years it looks like, um, but you know, the point is that they are trying very diligently to produce quality sellers and quality products on that marketplace. And I think that’s gonna, that’s going to benefit them in the longterm. Yeah. They’re knocking off their clients.
Scott Luton (26:22):
Say that again, Greg, that’s a really,
Greg White (26:24):
They are not like Amazon knocking off allegedly Amazon I’m knocking off their clients’ products and white labeling as them as their own products. Yeah. So they’re not, they’re not doing, they’re not really attempting to compete in that regard with their marketplace sellers,
Scott Luton (26:44):
Good stuff. There. We’ll keep our finger on the pulse of Walmart and admire. They’re relentless. They’re going to figure this out. And this is really
Greg White (26:52):
I too. I mean, let’s look, let’s not overlook Shopify here. That is a company that has declared as their mission to expand beyond what effectively was an online shopping cart into fulfillment and logistics and distribution of products to give people an option. And look, you can love or hate any of these companies, but the truth is that sellers and consumers need an option, right. Just imagine a world in a world, um, five, five or 10 years ago when there was only one store in only one mall in all of the world, right. Or all of America. Right. So we certainly, there’s certainly room for diversification in the marketplace. There’s certainly room and a need for consumers and sellers to have options for where to sell.
Scott Luton (27:42):
Yup. All right. So moving right along from Walmart and Shopify teaming up and sh and Walmart’s continued, uh, March throughout the e-commerce, uh, uh, journey there. So we want to talk about this huge hall real quick, uh, Alibaba, Alibaba, and JD come on a recent Chinese holiday. So Greg, you brought this to the table here as reported by CNBC. The two companies handled over $136 billion on June 18th, which is one of China’s two big shopping yearly event. So six 18 is what June 18th is referred to as it was started by JD com, uh, held obviously on June 18th, each year, the other one singles day, which was started with people know about right. Started by Alibaba and held on November 11th each year. Yep. So some say that these numbers were related to six 18 may be signaling a recovery for the Chinese economy. What say you Greg?
Greg White (28:46):
Yeah, I think, I think it certainly does. Um, I think it also signals that they felt the need to, to join together on this Alibaba and JD who are largely competitors in China, that they felt compelled to join together and to have a joint selling day, um, tells me a lot about their feeling in terms of upside in, in their marketplace. So, uh, it also signals a significance. This is a significantly larger sales number than singles day, which is a significantly larger sales number than Amazon day. What do they call prime day? Right. So, um, yes, resoundingly rebounding Lee.
Scott Luton (29:39):
I like that last word there. So see, uh, you know, it’s good. Hopefully we’ll take every piece of good news related to the global economy that we can get. Uh, clearly this is a good signal for the Chinese economy and hopefully we’ll have, hopefully we’ll have some, some good news for our own in the day and weeks, months to come, I guess,
Greg White (29:59):
Quick note here, Patrick Kelly says, um, his video’s not working, so he can’t see anyone. Patrick, I just want to tell you you’re really missing out because we look, we both look pretty good today
Scott Luton (30:11):
As far as you know, Oh gosh. Hello, Patrick. Hope this finds you well tuned in via LinkedIn. Hopefully that, that produced podcast. That’s right. Yeah. Um, all right. Since we’re S you know, since we’re still on kind of the eCommerce, uh, uh, scope rather than withhold, we’ve got a couple of comments here from Barbara and from Jeffrey, I’m just gonna go ahead and share rather than holding these to the end, Amanda and clay. So Barb, uh, says she’s interested to see what impact to shop online and pick up groceries had, has had on their e-commerce, uh, increase. That’s a really interesting comment because, uh, if you can pull folks in and, and Walmart is excellent, they’re there. I think they’re the industry leader in terms of online grocery shopping. If you can pull Pope full pull folks in for the groceries, what kind of spillover revenue can you and spill over purchase? Can you have there? So that’s a great comment from Barb quick comment from you, Greg, before I share Jeffries.
Greg White (31:08):
No, I’m yeah. I mean, I’m online grocery sales spiked up significantly last week. Kroger announced earnings and their sales were up. I don’t remember the specific numbers. Let’s just say notably significantly.
Scott Luton (31:25):
Greg White (31:26):
It was substantial right now. The question remains of whether that trend will sustain. I happen to believe that it will, because I’m just anecdotal. A lot of the people who were ordering online are people that, um, that didn’t get out to begin with the older generations who, who weren’t getting out a lot to begin with. Um, and now that they’ve found this convenience and, and I think the quality, uh, if you read anything about Kroger, the quality, the satisfaction with what they were getting and produces, always Patrick Kelly should turn his frown upside down produce is always the key to grocery, right? People want good tomatoes and bananas and whatnot. And, and because they did a good job of, of shopping for their customers, lots and lots of people were pleased.
Scott Luton (32:21):
Yep. Hey, uh, so Malcolm just shot us over to us. Uh, quarter one 2020 same store sales for Kroger was up 19% online sales. This is huge online sales, nearly doubled. So you’re right, Greg. Okay. So moving right. Want to share Jeffrey’s comment. And we’re gonna dive into the next topic. Jeffrey says, seems to me this further recognition that warehouse, uh, that, that a Walmart is bedding that [inaudible] buy online pickup in store will become an increasing share of total sales. I would generally agree with that.
Greg White (32:57):
Yeah, well, you know, I think they, they recognize it and, and to Stephen’s point earlier, they, I think they have a better plan for it because they have planned their stores so well. Um, they have a reasonable service area around the store that doesn’t create a lot of over overlap between stores. Um, you know, I, I read an article recently about something target is doing, um, where they’re putting a fulfillment center between the stores and the consumer. And that frankly baffles me a little bit. I’d like to talk to somebody at target about that, because I’m not sure why that’s necessary. I’m sure there’s something I’m overlooking, but, um, it seems to me that if you’re a good retailer and target is a good retailer, right? You should be near the last mile of, of your consumer and be able to distribute from your stores. It could have to do with the size or the storage capacity of a target store, which in my experience has been substantially less than that, of a Walmart. So maybe that has something to do with it. Not sure
Scott Luton (34:09):
Jeffrey clarifies with that previous observation, we’ll just share it. He’s really referring to the new Shopify partnership, so good stuff there. Um, all right. So let’s keep driving Greg, as we kind of start to wrap up today’s episode, the supply chain buzz
Greg White (34:24):
Still on the same, right. We’re still in that same vein, right. Retailers and e-comm and how that’s impacting the rest of the supply chain. Right. So that’s right.
Scott Luton (34:34):
I think, um, I mean, right now a lot, so much of supply chain news is dominated by, well, let’s face it. You you’ve said it. We’ve all acknowledged it consumers. They are the King and queen of supply chains, right. Based on what their preferences, their purchases. So supply chains, as much as we want to get out in front and proactively predict what they’re going to do. Unfortunately, over the last six months, we’ve been in more and more reactive mode, just ad out of necessity. So, so, you know, the cause of all of that, uh, and as supply chain leaders and supply chain organizations to make their shifts that is driving a lot of the news, right? Um, as, as well as, as, as this four story here, as we talk about which isn’t going to be a surprise to hardly anyone on this lobstering, huge surge in warehouse demand.
Scott Luton (35:22):
So Jennifer Smith, one of our favorites, she does outstanding work at the wall street journal. If you’re not following, uh, Jennifer on Twitter, or if you’re not checking out her coverage via the logistics report, uh, you’re missing out. So check that out. Uh, Jennifer Smith over at the wall street journal reported on this surge and the numbers behind it over the weekend. She notes that industrial real estate activity, you know, think lease renewals, think new leases, you know, that type of activity that jumped 43% from April 15th to May 14th over the previous 30 day period. And this kind of surprised me a little bit. Overall 2020 transactions are up almost 3% over 2019. Some of the supply chain moves that that, that their article was reporting as seeing. So some companies, especially food and CPG suppliers are securing more space, especially closer to urban population synergy. And that’s, that’s nothing new.
Scott Luton (36:21):
That trend has been in place for awhile. It’s just been, it’s been ramped up based on some of these, again, the consumer purchasing, the pandemic purchasing decisions we’ve seen, and probably the other wrinkle here is these buying patterns. As the article reports, a lot of folks believe that they’re here to stay. So they’re shifting inventories, shifting footprint, adjusting supply chain around that some retailers have relied heavily on brick and mortar stores to fulfill e-commerce orders. We were just talking about that, right? Uh, in fact, Greg, you were already reading my mind cause you mentioned target already. I wanted to mention them because they have made huge strides there. Yup. In the article, just Dan Curt, vice president of supply chain for the retail industry leaders association was quoted as saying quote, there is a repositioning of the inventory and adapting systems for this new covert era of shopping in quote. So there’ve been projections from some analysts that businesses may increase their inventories five to 10% over the longer term. So they can insulate themselves from the demand surges that have led to empty shelves and lost sales. So Greg, some of your initial take away from that report there,
Greg White (37:35):
I can’t help. But think back to the beginning of e-commerce, let’s just say arguably around, around the turn of the century, around the year 2000, um, because I was at working with or consulting with companies like staples, um, who at the time was the number two eCommerce site on the planet. Staples was at one time. So, but where I saw retailers start to falter was right there in those types of scenarios because here comes this new vehicle e-commerce and I have my standard store operations group and the store operations group is saying, I’m going to do like finger puppets. The store operations group is saying, don’t put that e-commerce stuff under my banner, right? Because that’s going to hurt my margins, my sales, my, you know, my, um, comp store sales. And it’s also going to hurt my bonus most importantly. So they built parallel organizations in my opinion are, and always have been completely unnecessary, the firewall or paper wall, whatever you want to call it between.
Greg White (38:45):
Uh e-commerce and traditional store retail is completely manufactured by the organizations of the retailers themselves and the sooner that they and we all who helped them to transform their supply chains recognize that and consolidate those two, the better off they will be. Walmart is one who is ahead of the game. There Nordstrom actually has always been, always had more of a, um, what do I want to say, cooperative vision, right? In terms of that, and many other retailers who are doing that, but the ones who recognize it as it’s not e-commerce, it’s not bricks and mortar commerce, it’s just commerce. And the companies that recognize that are the ones that will succeed and succeed more rapidly.
Scott Luton (39:30):
Well put, well put, um, so be interesting. Again, a lot of what we’ve seen, what thought folks that thought to be temporary shifts and buying choices and decisions and patterns and methods. It’s interesting to see a lot of folks kind of shifting their chips and betting on these are longer plays. So of course, uh, you know, supply chain leaders are going to figure out how to, how to adjust and react while protecting margin, protecting inventory, uh, and, and, you know, serving the consumer with what they want and how they want it when they want it, how much you want to pay for it. Right.
Greg White (40:07):
You made a really good point. And I think it’s worth note, and that is that supply chain professionals will do it, not store operations, people that, I mean, of course they’ll participate, but the sooner we put all those people that e-commerce leaders, the store operations and the supply chain leaders all in a room and have them solve a common problem. First of all, create a common solution to a common problem. The better off we’ll be.
Scott Luton (40:30):
Yep. This would be a really interesting, although a lot of folks have already been experiencing an additional peak season. I’ll tell you this, this peak season coming up this fall is going to be a really interesting one to watch and see.
Greg White (40:42):
Scott Luton (40:45):
That’s a great question. Great question. Alright. So in our final story here, uh, what kind of saved the best, the most important perhaps for last, um, you know, we’re going to be talking about a very interesting article, really enjoyed this article from the freight waves team in particular, Clarissa Hall’s falls, H a w E S over for weight waves, and it’s all about racism, racism, and trucking. So, um, I’d love to get folks to weigh in and, and share their comments and observations and experiences here. But, but for starters, let me walk through this a little bit, Greg. Um, so the story talks about Michael Ware. Who’s, who’s pictured there he’s an African American truck driver based in Gilbert, Arizona. It was Gilbert. Where was that? Where you were
Greg White (41:30):
Straight South of where I lived in Tempe. Okay.
Scott Luton (41:34):
Due to some of his experiences in the trucking world as a least owner operator, he founded black truckers United, which now has over 460 members. The primary objective is to give other minority truckers a platform to discuss diversity and racism in industry. So while some say that you don’t find as much in your face racism in trucking, as you did just a few years ago, Lawrence Bell, which is a truck driver based in Pittsburgh, Texas says a lot of that hatred and racism has just simply moved online. Their freight waves team conducted a survey of 154 motor carriers of all sizes. Uh, and here’s a couple of key findings from that survey. 47% viewed racism as a problem problem in trucking 44% of the respondent stated they had encountered racism in their daily job. And 52% of the respondents stated that transportation companies do not do enough to combat racism.
Scott Luton (42:38):
And here’s where it, if none of that gets your attention here, here’s some other places it really plays out and it impacts these, uh, these entrepreneurs and these truck drivers and these professionals from really being successful. The article goes on to talk about other challenges, uh, some claim it’s tougher to get business mentoring from other drivers, such as successful financial management, you know, behind running your own trucking business. That’s critical, right? Uh, and access to financial aid in and of itself can be a challenge. According to a survey that the article sites, uh, survey was conducted by global strategy group, 12%, only 12% of black and Latino, small business owners who applied for assistance through the federal paycheck protection program received loans that, that PPP program. So it’s all about putting this first off, really, at least my view. And I applaud the work that, that Clarissa and the freight waves team have been doing. You got to give this awareness so it can drive the dialogue. You know, if folks aren’t aware it’s next to impossible to make things better. So I appreciate the reporting. Um, but Greg, it’s also about action and, and finding ways once you identify these issues and these problems and these obstacles that limit everyone’s success or everyone’s opportunity across and in supply chain, it’s about doing something about it, right?
Greg White (44:06):
Well, it is. And, you know, what’s, um, kind of stands out among these numbers is 44% of the respondents stated they have encountered racism in their daily job. If I recall the numbers correctly, that is, that is the population of people in trucking is not 44% black, which means some of that is, is white people or whomever talking to each other and, you know, in racist ways. Right. Which still, I still see as a that’s that to me is the systemic part of the problem is you’ve got to recognize that internal prejudice, you’ve got to acknowledge it and you’ve got to eradicate it. Right. Cause it, it is going to undoubtedly flow out to whoever you deal with who is a person of color in your daily work. Right. And, and that, that, um, a lot of the, in your face racism went online. It probably went and went online and it went over to the water cooler as well as my guests. So that’s a really interesting and concerning statistic. So yes, you have to acknowledge and then you have to actively eradicate it.
Scott Luton (45:21):
Yep. And, you know, um, we’ve had some interesting social media comments and discussions in recent weeks as we weighed in, on, on certain really tough issues. And, and, and for that matter, we’ve had some really interesting offline conversations and, um, you know, there are no simple answers I think, but one of the simplest that I have personally found peace in and action in is what we control in terms of our thoughts and our actions day in and day out and constantly challenging. And rechallenging any subconscious assumptions you’ve made, any, any, any, any, uh, um, anything that you may just do because it’s your, your, it’s your typical behavior or your, your, um, you know, you’re kind of stuck in your rut. You’re stuck in your personality. It’s time to really reevaluate all that. And really be honest with yourself, um, in terms of how you can really be more empathetic and, and not just be an observer of this change, it’s going to be taking place. But how can you truly say I’ve got some of this and be a heavy lifter in the change that needs that’s going to take place?
Greg White (46:35):
I think it really is simple and it is, it goes back to the golden rule, treat everyone the way that you would want to be treated. Right. I mean, um, love your neighbor as yourself, right. Is the, is the command I, somebody pointed this out to me once in very simple terms and it doesn’t really matter it matter who the person is. Would you ever leave yourself sitting on the side of the road with a flat tire, right? That’s when, you know, you love your neighbor as much as you love yourself. It’s simple acts like simple, simply understanding, simply treating people fairly simply simply assuming that they are as good as you are. It’s as simple as that.
Scott Luton (47:15):
Well, we’d welcome. I’d love to feature, uh, either Michael Ware or one of the members of black truckers United and get their perspective and their experiences firsthand. So if, if any of you are listening, uh, out to the show and we’d love to have you own and learn a lot more about your story firsthand. Okay. So Greg, I don’t, I don’t know, uh, moving right along from that really serious topic into, you know, some of the observations and some upcoming events we’ve got, you know, so last week wrapped up a really super busy Sapphire now event by the folks over at SAP. Right. And super busy. And, you know,
Greg White (47:58):
Yeah. At the same time, I mean, we got to hear a lot. Right. And it is impressive what, what they’re doing. One of the things that really impressed me was, uh, Christian Klein, CEO, his commitment to at least on some products, get those years long SAP projects, which are legend in, in the technology industry. In some cases down to four months, that’s what the marketplace needs. If we want our, our enterprises to be adaptable and agile, then the implementation of the technology that gets them there needs to do that. And I applaud that commitment. That’s not, that’s not an insignificant commitment on SAP part because they make literally billions off of services. And so do their implementation partners.
Scott Luton (48:45):
Yep. Great point. Great point. There also, you mentioned Christian Klein in the wrap-up Q and a with the whole leadership team. He had some very Frank comments around, uh, racism and diversity and their commitment to really, again, not lip service, but take action to move the needle there. I found that really interesting and in many other things, but I think perhaps the biggest news from last week was SAP is a launch of its industry’s cloud solution. So, uh, that’s, that’s a much bigger conversation too much to go into too much here, but we’ve got a link directly to a lot more information and application and stories and some examples of how it’s being leveraged already, uh, in the show notes of today’s episode.
Greg White (49:32):
I think what was interesting too, was it was all free. It was a great opportunity to learn from companies that are doing things well. Um, I mean, it wasn’t, it wasn’t just a SAP commercial, it was companies that were actually changing things, sustainability cloud, digital transformation, all the key words and buzz words, but they were actually doing it. And to hear from the companies that were putting it into practice was it was energizing.
Scott Luton (50:00):
Yup. Agreed, good stuff there. All right. Um, our next opportunity. So the SAP, by the way to wrap up that last segment, SAP Sapphire now wrapped up on Friday. So, uh, Greg and I were really enjoyed our time kind of ambassadors for the virtual digital event, but there’s a ton of content still available. Um, I mentioned one links that’s in our show notes, there’ll be plenty of others, keynotes breakout sessions, Q and a, you name it. Uh, and, and let us know if you’re interested in any of that. We’ll make sure you have the right links coming up next, June 25th, our webinar, and you know, the cool thing about this webinar, Greg. Cause we, we, you know, this has been on the books for about a month now. Uh, we love Tom Brennan, uh, big fans of rootstock, but they’ve added vitamin angels, both Bonnie and Shelly.
Scott Luton (50:46):
And there’s a very noble mission that the vitamin angels team or our own. And we’ll learn more about this in the webinar, but I love additions, especially with different, different ways of you and things, different ways of view and technology and ERP, especially from a, a kind of a, um, I’m not sure if they’re technically a nonprofit, but they basically, their core mission is to help get vitamins out into the hands of those that need it globally. All right, we’re going to keep driving here. We may have a hit a little glitch there, connection glitch. So we’ve got a June 25th webinar coming up. We also have our June 15th discussion on race and industry. Uh, you know, you know, that last news article, you know, racism and trucking, you know, that’s a big reason why we’re trying to facilitate and help facilitate these interactive sessions. Like our July 15th stand up and sound off.
Scott Luton (51:40):
We’ve got an outstanding panel that will be weighing in and sharing some of their insights and their, and their experiences. And we want to hear from our, our global audience and get them to weigh in on same things, highly interactive session, July 15th, it’s free to register. You can, you can sign up for that one as well as you can for the June 25th firstname.lastname@example.org. All right. Uh, it looks like we have lost Greg for now. Uh, so we’re going to wrap up that really wraps up most of what we had here on today’s supply chain buzz. Again, you can check out a wide variety of resources and content as supply chain, not radio.com. Oh, there he is. Let’s see if we can add him right back to the stream. Hey Greg,
Greg White (52:26):
We were talking about the trials and tribulations of broadcasting from a power box right near our house. Just got struck by the only lightening that I have heard so far today And exploded so
Scott Luton (52:42):
Well. You made it back just in the Nick of time. We just walked through the webinars we’ve got coming up and more importantly, that July 15th Frank discussion on race. We want everyone, everyone to come in and check that out. Greg what’s, you know, as we wrap up today, uh, today’s supply chain buzz, uh, what’s what’s uh, one key thing from Greg white. As you jump back in live stream, we’re going to put you right back on this only, cause I know you can do it. Uh, w w what’s one key thing our listeners can, can really hang their hat on,
Greg White (53:16):
Uh, you know, uh, well, over the last couple of weeks, and of course, during Sapphire, now I’m astounded to hear the term supply chain and manufacturing and procurement all delivered separately. Oh, you guys are in supply chain. You’re not in manufacturing. Oh, we’re in procurement. We’re not in supply chain. I think we need to, as professionals start to think about supply chain as the overarching discipline, and then all of these practices as segments of that, of that discipline to me, that’s that’s job one and never, ever forget this consumers are the beginning and the end of the supply chain. They are part of it, right? You are not forecasting items. You are forecasting people and their actions and the influences on those people. So watching is everywhere.
Scott Luton (54:16):
Oh, I’m so glad we could get you back to make those two really nice points. Barb come weighs in. Again, talks about how yet, again, collaboration is key. You know, I agree with you. And I think collaboration of course, phrase has been around forever, but meaningful, practical, diverse, more diverse than ever before. You know, Greg just talked about the different functions. We’re going to bring everybody under the tent and really collaborate in a meaningful way where everyone has a seat at the table. Everyone is bringing in their different insights from their walk of life or their function within the enterprise, or what have you. Um, it is, I know it’s so cliche, but it is, it is really important in 2020 and beyond to get through some of the challenges we have here. So with all that, Greg, with all that said to our audience, thanks so much for tuning into today’s supply chain buzz, uh, on behalf of her, our whole team here at supply chain. Now Scott Luton, Greg white, Hey, to our audience, a do good, give forward, be the change. And with that said, we’ll see you next time here on supply chain now. Thanks everybody.
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