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Supply Chain by the Numbers

- April 6, 2017 -

  Supply Chain by the Numbers for Week of April 6, 2017

Amazon has a Drone Daesign for Every Purpose; Collapsed Atlanta Bridge to be Repaired at Accelerated Pace; Retail Store Closings will be Very High in 2017; Payless Shoes Cites 2015 Port Woes in Bankruptcy



That is how many different designs for its drones Amazon has, each created for a different purpose, according to a recent article on Amazon's drone progress on web site. In addition to a drone for a delivery to a single consumer's home, as first shown in video during CEO Jeff Bezos' famous 60 Minutes interview in 2013, Amazon is working on different drones that can stop at multiple customer locations, land on rooftops in urban areas, handle returns, etc. Though Amazon has been doing most of its drone testing in the UK due to less restrictive rules, Amazon conducted its first public drone test on March 20th in Palm Springs, CA, at an invite-only Amazon emerging tech conference. There Amazon said it does have a site at an undisclosed semi-rural location in the US where it simulates possible obstacles that drones will face in real-world deliveries, with a faux backyard that has things like clothes lines and a simulated dog. The Amazon drones are built to fly 60 mph, and go as far as 20 miles roundtrip from a DC.




That is how many pairs of shoes that Payless Shoes had to sell at deep discounts in 2015, the result of the labor slowdowns at West Coast ports at the time, which Payless surprisingly cited as a key factor in its filing for chapter 11 bankruptcy protection this week. In its court filings, Payless said it had a tough 2015, when "antiquated systems and processes" caused it to buy too much inventory. And the shipments of those shoes were delayed by the West Coast port slowdown during a labor dispute that year. That prevented the company from stocking its shelves during the crucial Easter selling season. By the time delayed inventory finally arrived, Payless said it was late in the season and it had to sell the shoes at deep discounts. As a result, revenues fell, and Payless had to cut its advertising and capital expenditures. Efforts to improve its website were also delayed by the retailer's cash crunch, from which it never really recovered. All of which led to the bankruptcy filing this week, though Payless intends to remain in business. What a story. "For want of a nail, the shoe was lost…"



That's how many weeks it is going to take to repair the damage to the busy I-85 highway north of Atlanta after a fire there caused a bridge to collapse. That would put the scheduled opening of that stretch for June 15, a very aggressive schedule that the state of Georgia hopes will be aided by significant incentives being offered to contractors to hit that date. To expedite rebuilding, the main contractor will be retrofitting the bridge columns, using concrete that will cure in 24 hours, and pre-fabricating some elements of the bridge. A fire that erupted under the elevated roadway during the evening rush on March 30 consumed Georgia DOT construction materials stored there. The highway, shrouded in flames and thick black smoke visible for miles, was shut down shortly before the fire burned so hot that it collapsed the bridge supports at about 7 p.m., causing road havoc for cars and freight trucks alike. The alternative is to take the Rt. 285 loop around the city. Needless to say, the state is looking at whether it needs to revise is procedures for storing materials.



That is how many US retail stores have closed year to date, up sharply from the 1153 shuttered at this point in 2016, according to new estimates from Oliver Chen of financial services firm Cowen & Company. Given historical patterns, the full year number of US store closings should be about 8600, Chen estimates. Obviously, the growth of ecommerce is a huge factor in all these closings, but not the only one, Chen says. The US is probably ly higover-retailed, with for example the number of U.S. malls roughly quadrupling to 1,220 since 1970, while the country's population has grown by less than half that amount over a comparable period. And as parts of the population flee towns with high unemployment or other economic or social shifts, the lowest-tier malls have become less relevant and/or lose money. Cowen predicts some 20% of malls will need to close or be repurposed over the next decade.

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