Supply Chain by the Numbers for Week of Feb. 9, 2012
GlaxoSmithKline Says Happy (Inventory) Days are Here; Freight Spend Keeps Rising; More Locomotives on the Way; New Technology Shaves Conveyor Widths
Number of days of inventory that pharmaceutical giant GlaxoSmithKline has taken out of its supply chain in the past year, largely by thinking more like a consumer packaged goods company than a pharma one, according to CFO Simon Dingemans in GSK's quarterly earnings call this week. We take that to mean becoming more "demand-driven." That improvement will generate about $465 million in savings for the company in the first six months of 2012, Dingemans said.
Increase in total freight expenditures in January 012 versus the same month in 2011, according to the just released monthly Cass Freight Index. That is quote a rise, given freight volumes were up just 3.6% year-over-year. Though Cass notes that expenditures took a dip in January 2011, making the year-over-year delta in 2012 perhaps a bit exaggerated, that dip was nowhere near the 18.5% net increase in freight spend (22.1% rise in spend minus the 3.6% increase in freight volumes). Carriers had a very good year.
Approximate number of inches of conveyor width for material handling applications that a company would not have to pay for - quite a savings - from a new approach to powering conveyor rollers called External Motor Drives (EMD) , from a company called Conroll, which exhibited at this week's new MODEX trade show in Atlanta. By placing the drives on the outside of the conveyor frame, the unusable space where the rubber bands turn the rollers on Motor Driven Roller technology - itself a big advance over belt driver rollers - users won't have to pay for the expensive material needed for this three-inch or so dead zone.
Amount of capital that rail carrier Union Pacific said during its recent Q4 earnings call that it was planning to invest in new equipment, track and other improvements in 2012, up 12.5% from 2011. That includes some $400 million for new locomotives, double the amount from last year. Good times for the rail carriers continue. Union Pacific's profits were up 24% in the fourth quarter.