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Supply Chain by the Numbers

- Nov. 17, 2011


Supply Chain by the Numbers for Week of Nov. 17, 2011


Natural Gas Truck Prices at One Year Payback; Home Depot Supply Chain Powering Success; Survey Shows Need for SCM Segmentation? Big Year over Year Change in Oil



The current difference in cost for a natural gas powered Class 8 tractor versus a traditional diesel powered truck, according Andrew Littlefair, CEO of Clean Energy, a developer of natural gas filling stations, in an interview on CNBC this week. That's down from $65,000 three years ago, and at today's nat gas and diesel prices, provides about a one year payback from such a move, as truckers/shippers will save the equivalent of $1.50 per gallon, while an average truck users 20,000 gallons per year.




The amount of goods Home Depot is now moving into its stores through its own DCs, versus just 25% in 2007. That as the retailer nears the end of its roll out of 20 or so Rapid Deployment Centers, or RDCs, which are crossdock facilities, a transformative supply chain strategy Home Depot embraced several years ago under supply chain chief Mark Holifield. The strategy allows HD to either reduce overall inventories or carry more products for the same inventory, and was cited by company executives in this week's earnings call as key factor in its excellent financial performance.


The number of survey respondents in this year's Trends and Issues in Logistics and Transportation Study who said their company's strategy was to be "all things to all people," versus picking one approach (cost leadership, customer intimacy, product innovation) to primarily excel at. That's up from 37% in 2007. That left us thinking it's time to really look at segmenting supply chains to best serve the needs of different customers at a profit. (See 2011 Trends and Issues in Logistics and Transportation Finds more Companies Taking Be Everything to Everyone Strategies)



The average price of Brent crude oil so far in 2011, versus an average of just $80.00 in 2010. That's an increase of 38.5% year over year. Despite the usual blame on speculation, the International Energy Agency (IEA) said in its monthly report last week that supply and demand fundamentals were underpinning stubbornly high prices. And despite the threat that fuel costs pose to global economic growth, OPEC has given no indication it plans to change output levels at its next meeting in December, as prices continue to climb.

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