Target targets suppliers
As part of a supply chain overhaul and major effort to become more competitive with other retail giants, Target is getting tough with its suppliers. Beginning on May 30, Target suppliers will face tighter delivery deadlines, and new fines for late deliveries are also planned. Furthermore, any supplier that delivers an item which does not match its description could face a fine of up to $10,000. The new policies will roll out across various product categories through the summer, and all suppliers will be impacted by the end of August.
Target hopes this new strategy will help keep shelves stocked, something the company struggled with after its product expansion several years back, including its new fresh food category. Furthermore, with stronger supplier regulation, the company hopes costs can be better controlled and sales for all parties involved can be maximized. Target is not alone in its focus on increasing supplier reliability. Wal-Mart, for example, recently raised its standards and informed its suppliers that on-time delivery must be at 95%, up from 90% prior to the new regulations. Furthermore, Wal-Mart now expects its suppliers to deliver within 1-2 days instead of 1-4 days of the target delivery date.
To read more on these new supplier regulations, click here.
Amazon set to help European vendors distribute across Europe
Amazon announced this week its intention to help vendors in Europe distribute their products across the European Union (EU). The new program is called Pan European Fulfillment by Amazon (FBA) and services include picking, packing and shipping orders across its European Fulfillment Network. Sellers can now deliver their inventory to a local Amazon fulfillment center and have Amazon take care of the rest of the process when a cross-border order is received. The vendors are only required to pay local fulfillment fees in the buyer’s market, and no additional cross-border fees are applied. Amazon will also handle any customer service inquiries that come as a result of the order. In essence, Amazon has just become a significant player in the Pan-European 3PL market. Benefits of becoming a part of this program include the shortening of delivery times, reduced shipping costs and increased efficiency. Retailers also gain access to an enormous logistics network.
Read more about Amazon’s new program here.
Supply Chain innovation taking place at universities
We are beginning to see an increased focus on encouraging innovation and entrepreneurship at the university level. This usually comes in the form of competitions. One such competition was the Smeal Supply Chain Entrepreneurship Pitch Contest, a competition organized by Penn State’s Smeal Center for Supply Chain Research and the Farrell Center for Corporate Innovation and Entrepreneurship. This event was held for the first time and asked students to find creative ways to improve existing supply chain and logistics operations. It was part of a university-wide program called “Start-up week”, designed to encourage entrepreneurship amongst students.
11 teams participated in the supply chain contest and two teams were able to set themselves apart from the pack due to their innovative ideas. The winning team was awarded $3,200 for their capacity maximization idea. The team developed a tool that would offer shippers reduced shipping prices by matching their needs to other shipments not yet at full capacity. A machine learning cloud would compute optimal paths and other planning factors based on fuel costs, travel time, carbon emissions package type and many other factors.
Read more on the contest results here.
Have a great weekend!
