Supply Chain by the Numbers

- Dec. 17, 2015 -

  Supply Chain by the Numbers for Week of Dec. 17, 2015

Toys R Us Tries Bulking Up Store Inventories; No Retailers Say They are On Top in Collaboration; Diesel Cargo Ships Can't Find Anywhere to Unload in Europe; US Manufacturers Bullish on 2016



That is the current in-stock rate at Toys R Us stores, according to Citigroup analyst Jenna Giannelli. That's pretty good, and comes as a result of the retailer's strategy to bulk up on inventory even as many of its competitors go the other way. "We want our stores to be bulkier," new CEO David Brandon told the Wall Street Journal this week relative to the effort to stuff shelves with more goods. "We call it full and chunky,” he said. Before Brandon arrived, stores were considered to be in stock if they had three of a particular item. "If someone came in and bought those three items, we'd be out of stock," Brandon added. However, Toys R Us didn't fare as well on-line. On Black Friday, the retailer's website was in stock 62% of the time on 100 top selling toys, according to an analysis by price-tracking firm 360pi. That was roughly on par with Walmart, which had a 63% in-stock rate, and better than Target's 51% rate. But it was worse than Toys R Us' 76% in-stock rate last year.




Perhaps astoundingly, that was the share of 50 retailers surveyed for SCDigest's new benchmark study on the state of retailer-vendor supply chain relationships who said they were "near the top" in terms of collaboration skills. That compares with 10% of retail vendors who placed themselves in that top tier. While 39% of retailers did say they were "above average," 55% said they were just average and 6% said they were below average. 10% of vendors said they were below average. Of course, by definition, half of any group has to be below average, so this is yet another example of what SCDigest has called in the past "the 50% Problem," which involves companies over-rating their supply chain prowess. You can download this excellent, highly graphic benchmark report here: The State of Retailer-Vendor Supply Chain Relationships 2016


That is the rate of revenue growth expected by US manufacturers in 2016, according to the new semi-annual economic forecast from the Institute for Supply Management, based on responses from a panel of supply chain executives that ISM polls for each report.
That level of growth would almost triple the anemic 1.4% growth rate the same panelists expect for 2015, and would require reversing the recent trend of manufacturing weakness, with the ISM purchasing managers index for November falling below the 50 mark that separates expansion from contraction for the first time in 35 months, falling to a low not seen since June 2009 at 48.6.
On a somewhat contradictory note, the manufacturing panelists on average expect capital spending to grow a weak 1% next year, versus a strong increase of 8.3% in 2015.



That's how many miles a bulk cargo ship carrying diesel fuel was from its destination in Portugal - three fourths of its journey from the US Gulf Coast - when it abruptly turned around and headed home few days ago. Why? Like a number of other ships recently, it found there was nowhere to store is diesel cargo, as storage tanks are filled to the brim amidst a world awash in oil. At least 250,000 tonnes of diesel are currently anchored off Europe and the Mediterranean seeking a discharge port, the Maritime Executive reported this week. "The idea is to keep tankers on the water as long as you can and try to find a stronger market." a trader told the publication. Of course, oil prices continued heading down, falling to the mid-$30 range this week. Who would have ever predicted such a stunning change in direction from 2008's oil price peak?