Supply Chain Management and Logistics Blog. Posts are about end-to-end supply chain management and logistics in a time of challenging disruption.
Tom provides leading supply chain management and logistics consulting and advisory assistance based on real-world experience.
He brings authority and domain expertise to clients.
Email Tom at: tomc@ltdmgmt.com
Check Tom's profile at: https://www.linkedin.com/in/tomcraig1/
Manufacturers. Retailers. Logistics / transport providers. SMEs. The New Reality is driven by the New Supply Chain. Are you aligned where supply chain management is going? This can be defined as: Threats, Your Business Model, Supply Chain Management as Innovative Disruption, Your Future. Check out:
Manufacturers, retailers, logistics/transport providers, SMEs. What LTD has been discussing of the new selling reality & the Supply Chain that drives it can be defined as:
Threats
Your business model
Supply chain management as innovative disruption
--A Perspective for Manufacturers, Retailers, and Logistics/Transport
Providers--
What began as retail e-commerce selling has escalated to
disruption and chaos with order delivery velocity.Faster. Faster. Speed is the new
competition.And that speed is driven by
the new supply chain management.
How are you doing with all this?
Change alert for the New Reality:
RETAILERS AND MANUFACTURERS
·Omnichannel is about duality—as to
ways to sell and deliver to customers.
·E-commerce has been the selling game-changer
driven by its perfect order delivery velocity.
·Manufacturing omnichannel duality is
selling to customer intermediaries and selling direct to customers.
·Online has given customers power and
elevated their expectations.
·Customers want perfect orders, order
delivery velocity, and no stockouts, regardless of the channel.
It It has expanded from B2C/DTC to B2B.
It It has moved across industries, markets, and the world.
SUPPLY CHAIN MANAGEMENT
The
supply chains of leaders are strategic and weaponized.
Omnichannel
for manufacturers and retailers highlights the non-linear complexity of
supply chains.
Perfect
order delivery velocity is driven by strategic supply chain management
with its end-to-end velocity.
Emphasis
is shifting to the total supply chain, not its logistics functions.
The
selling duality also requires supply chain duality. The one-size-fits-all,
monolithic supply chain is gone.
Greater
emphasis is needed to the upstream supply chain where product flow starts.
Downstream
supply chain management is order fulfillment and more.It includes deliver to, deliver how, and
network alignment.
The
new supply chain has a new structure as to process, technology, and
organization.
LOGISTICS SERVICE PROVIDERS
Supply
chain management transformation and changes mean logistics changes.
Analyze
how you fit or do not fit in the new supply chain world with its embedded
velocity requirement.
Assess
how you complement the imbedded, new supply chain requirement of velocity.This means a new role.
Logistics
providers need to transform for what is happening. For starters, think SCMaaS
and 3PSCM.
In all the above, those who do not change risk being left behind. Leaders and
laggards. It is not unrealistic to say that as you read this, change has
happened.That is the revolution.
For more on supply chain management and logistics, go to www.ltdmgmt.com
Retailers. Logistics/transport providers. Amazon is bringing logistics in-house. Reverse Outsourcing. Vertical & horizontal integration. In the new reality of end-to-end supply chain velocity, they are removing the middle man for better control, responsiveness, & speed. It could be called a game changer. The cost advantage with Amazon doing it themselves. Removing the profit from outside services by bringing it inside. Aside, perhaps from parcel carriers, Last Mile, maybe the biggest fear factor should be with retail firms.
Hapag-Lloyd with Maersk & MSC. Very interesting. What is the back story? Potential for other trade lanes? Hapag & Maersk in a time of disruption by end to end Supply Chain velocity. Hapag-Lloyd Inks Space Charter Deal with Maersk and MSC
German shipping major Hapag-Lloyd has signed a space charter agreement with the members of the 2M Alliance – Maersk and Mediterranean Shipping Company (MSC).
As informed, the space charter deal will give Hapag-Lloyd access to selected services of 2M on the Asia-North Europe trade.
“The addition of these services will enable Hapag-Lloyd to offer an even higher frequency of weekly departures and more routing options as well as to directly serve additional ports with high schedule reliability,” the company said.
The carrier’s expanded product offering on the Asia-North Europe trade will start in March 2020 and additional details will be provided in the coming weeks.
Earlier this month, Hapag-Lloyd revealed it was considering investments in new ships. The orders are likely to target ultra large container vessels (ULCVs) with the capacity of up to 23,000 TEUs, with the company following in the footsteps of its rivals CMA CGM and MSC which have already deployed some of their boxship giants on the Europe-Asia route.
Target. Does any of this reflect that E-commerce customers want their orders delivered & not have to pick them up at stores? Customer convenience. Customer expectations. Does Target have the Supply Chain required to deliver orders such as Amazon?
Target Says Holiday Sales Missed Its Forecasts
Chain cites weakness in toys, electronics; government data on retail sales due out soon
By
Sarah Nassauer
Holiday sales were sluggish at
Target Corp.,
raising questions about the health of the U.S. consumer and whether the retailer’s turnaround is losing steam.
Target’s November-December sales rose 1.4% for stores and digital channels operating for at least 12 months, the company said Wednesday. It warned that growth for its full fiscal fourth quarter, which includes January, would likely fall short of the 3% to 4% gain it previously predicted.
“We faced challenges throughout November and December in key seasonal merchandise categories and our holiday sales did not meet our expectations,” said Chief Executive
Brian Cornell,
who after taking the helm in 2017 launched a plan that included store remodeling and investment in Target’s digital platform.
The Minneapolis-based chain cited weak sales of toys and electronics, two big sellers during the gift-giving season. It also said Wednesday it was appointing a new executive to oversee its roughly 1,800 stores.
A government report on December retail sales due out Thursday will provide a better picture of whether Target’s shortfall reflects missteps at the retailer or is evidence of a broader pullback by U.S. consumers. Investors are also waiting to hear from
Walmart Inc.,
the country’s biggest retailer, which is slated to report quarterly results next month.
Market researcher NPD Group this week said holiday results were lackluster, estimating that total sales rose 0.2% from a year earlier. The National Retail Federation is also expected to update its estimate on Thursday; the group had predicted more than 3% growth in holiday sales in stores and online.
Target’s shares nearly doubled last year and closed near an all-time high on Tuesday. They fell 6.6% to $117 on Wednesday.
While other traditional retailers have struggled, Target has been held up as a chain that has adapted to shifting consumer habits by ramping up its e-commerce operations and remodeling its stores.
Digital sales in November and December rose 19% from a year earlier, following 31% growth in the prior quarter. To drive online sales, the company has been rolling out a variety of home-delivery and store-pickup services and during the holidays offered free shipping on all orders placed on its website.
Some analysts said the year-end results at Target didn’t necessarily signal weakness in its strategy. They pointed to a holiday season that had six fewer days between Thanksgiving and Christmas compared with the prior year, which compressed the time for stores to deliver packages to homes and shoppers to make impulse purchases. There were also fewer new electronics devices on the market to entice gift buyers, analysts said.
“Some of the shortfall can be explained away,” Chuck Grom, of
Gordon Haskett,
wrote in a note.
Sales at Target have been robust in the past couple of years aided by its turnaround plan, which included adding more in-house brands, remodeling stores and cutting prices, as well as investing in its digital business. Mr. Cornell announced the turnaround plan in 2017 following a weak holiday performance.
The company has boasted a streak of eight consecutive quarters of at least 3% growth in comparable sales, including a 4.5% jump for the period ended Nov. 3. In November, Mr. Cornell said the company was gaining market share in the apparel, home and beauty categories. “We are starting to see the bifurcation of winners and losers” in retail, he told analysts a week before Black Friday.
Target said Wednesday that many categories continued to do well but their growth wasn’t enough to offset flat toys sales and a 6% drop in electronics sales, as well as weakness in some home categories.
The company maintained its profit targets, in part because the categories with stronger sales earn high margins. For its fiscal fourth quarter, Target expects adjusted earnings per share of $1.54 to $1.74 and full-year adjusted earnings of $6.25 to $6.45 a share.
Some analysts say they weren’t expecting toy sales to match the growth of the prior holiday season, when the closing of Toys ‘R’ Us stores sent shoppers elsewhere.
Target’s “holiday sales were not terrible,” said Morgan Stanley retail analyst Simeon Gutman, who was expecting flat toy sales and notes that holiday sales appear to be weak based on reports so far. “Target’s ability to manage the business well through weaker sales is the silver lining.” Several other retailers have reported sluggish holiday sales, but most were department stores and specialty chains that entered the holiday season on weak footing. Macy’s Inc.,J.C. Penney Co.,Kohl’s Corp. and Victoria’s Secret parent L Brands Inc. all reported lower sales for November and December. Costco Wholesale Corp. was a bright spot, reporting comparable-sales growth of 9% for the five weeks ended Jan. 5, including e-commerce and international sales.
Why There's No Retail Apocalypse
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Why There's No Retail Apocalypse
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Here's the truth about the so-called, "retail apocalypse," it's more of a transformation. WSJ news editor Lee Hawkins reports. Photo illustration: Emily B. Hager/The Wall Street Journal (Originally Published May 29, 2019)
Along with Walmart, Amazon.com Inc., has yet to detail holiday sales results. The day after Christmas, Amazon said simply that it set a record for orders in the season and noted strong demand for toys, fashion and electronics.
Overall, the strong U.S. economy, low unemployment and rising wages boosted retail sales last year, government data show. But much of the growth is coming from e-commerce, not store visits. For Nov. 1 through Christmas Eve, online sales rose nearly 19% compared with growth of 1.2% for in-store sales, according to Mastercard SpendingPulse.
The holiday-sales reports so far leave a muddled picture of the health of the economy, but there aren’t specific signs that consumer spending is weakening, said Rod Sides, vice chairman of retail at Deloitte LLP. “Once we get the other data points in a week or so, we will know,” he said.
Target said its chief stores officer, Janna Potts, 52 years old, will retire and be succeeded immediately by another company veteran, Mark Schindele, 50.
Ms. Potts, a 30-year Target employee, took over as stores chief in early 2016. She will stay in an advisory role until May 1.
Mr. Schindele, who has worked at the company for nearly 20 years, was most recently responsible for remodeling stores and rolling out smaller-format stores in urban areas.
The company also promoted two executives to permanently fill the role vacated in early November when Mark Tritton resigned as chief merchant to take over as CEO of Bed Bath & Beyond Inc. Christina Hennington and Jill Sando will serve as chief merchandising officers.
