Supply Chain weekly wrap-up 2/26/16 – 3/3/16

Target shows it is taking e-commerce seriously

Target’s quest for e-commerce greatness now lies in the hands of a 16-year Amazon supply chain veteran. The retailer poached Arthur Valdez from Amazon and announced he will be responsible for integrating the company’s stores with its expanding e-commerce operations. As the chief supply chain and logistics officer at Target, Valdez will focus on reducing the amount of stock-out situations that have plagued the company in the past. Aside from his many years of e-commerce experience, Valdez brings much more to the table as he also previously worked for comparable retailers such as Walmart and Sears Holdings’ Kmart.

Target has admitted that the future growth of the entire company relies heavily on the enhancement of its supply chain operations, hence the big-name hire this week. The company seems to be on the right path toward improvement. Compared to last year, the retailer experienced a 20% improvement on out of stock metrics. That being said, Target still sees great potential in improving its operations, namely with a more cohesive integration of its 1,800 stores with its order fulfillment process from online purchases.

Read more on Target’s big hire here.

Retail in the UK: more automation, fewer jobs

A report released this week by the British Retail Consortium (BRC) suggests that by as early as 2025, up to 900,000 jobs will be cut from the retail industry. With approximately 3 million people currently working in retail, these cuts would represent a near 1/3 reduction in total jobs. The BRC also implied that thousands of shops on high streets would be closing across the UK in the years to come. It is argued that these changes are on the horizon as a consequence of increasing labor costs as well as simultaneous decreasing costs of available technology.

The lost jobs, according to the BRC, will be replaced by automated systems. In the coming years, retailers are expected to focus their attention on improving supply chain and logistics efficiencies in order to fund upcoming technology projects, such as the implementation of automated systems. On a positive note, customers are expected to profit from the implementation of the latest technologies through better product availability, more choices, more convenience and increasing personalization. The remaining retail job positions are also expected to be of a higher quality.

Read more on the results from the report here.

Cold weather impacting food supply chain

Mother Nature has reminded us of her potential to wreak havoc on supply chain operations. A cold spell in Spain last week has resulted in an estimated loss of €45 million in Murica, one of Spain’s fruit and vegetable production hubs. After a very mild winter, last week’s frosty weather front exposed many crops to damage, especially those that experienced advanced blossoming. Crops that were most heavily hit included almonds, peaches, nectarines and citrus. Artichoke and lettuce crops also experienced some damage. The estimated €45 million loss seems to be conservative considering this cold front is not expected to let up any time soon.

Read the full report here.

Have a great weekend!