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Supply Chain by the Numbers

- August 9, 2012

  Supply Chain by the Numbers for Week of Aug. 9, 2012

Truckload Carriers Hauling Profits; Foxconn Buys into Sharp Factory; Baltic Dry Index Continues to Plummet; Chinese Manufacturing Growth Slows



Average non-weighted income growth in Q2 at the eight public US truckload carriers SCDigest follows each quarter, as TL carriers string of excellent quarters continues. That profit growth comes from non-weighted revenue growth of just 6.4%, as asset discipline continues to pay off. For JB Hunt, Werner, Swift and others, intermodal and value-added service revenue, including dedicated fleets, continues to grow much faster than straight truckload carriage, changing the face of the industry.




The ownership percentage that Foxconn, the world’s largest contract manufacturer which assembles Apple iPads and iPhones in China, will attain of Sharp’s massive new flat screen manufacturing facility in Sakai, Japan, under a deal near closure this week. The Sharp factory was a huge bet for Sharp when it announced the multi-billion dollar investment in a highly automated factory in its home country a few ago. Both companies will jointly run operations at the plant and share revenues proportionately. Through this deal, Foxconn hopes to gain greater access to the supply of components that go into the assembly of the iPhone, the iPad and future orders of a much-rumored Apple TV as well.


Level of manufacturing output growth in China in July, according to the country’s National Bureau of Statistics. While that level of growth would be coveted by nearly every country in the world, it is actually the lowest level of manufacturing growth for China since May 2009, as the global economy, which has been heavily dependent on robust Chinese growth, continues to wobble.


Approximate decline year to date in the Baltic Dry Index, which measures pricing for non-containerized ocean cargo such as grains and other commodities. Things have gotten so bad in the past few years that this month, the world’s oldest shipping company, UK’s Stephenson Clarke Shipping, sold its last vessel and is going out of business, according to a liquidator this week. The company started business in 1730. “News of the closing of Stephenson Clarke clearly shows how challenging the current economic climate is for shipping,” the U.K. Chamber of Shipping said in an e-mailed statement this week.


Oct. 3, 2008

There are valid reasons for both the DC and DSD distribution models, but neither should determine the store assortment, which depends on the consumer.

The Distribution Center model makes sense when you have many prepackaged products which are continuously replenished and require little in-store servicing. With the facility justified, you can also add seasonal and holiday 'in and out' products which can share the distribution network.

The key is to manage the time supply of inventory in the warehouse and distribute it efficiently.

The Direct Store Delivery model can be implemented purely as a distribution method or also allow the manufacturer to manage some of the in-store merchandizing.

I do not see any advantage of using DSD simply to deliver merchandise. Although it may help the 'mom and pops' that are on the same route as a large retailer, the DSD model must be more expensive. Once the big drops are removed, it will become more costly to reach the independent retailers but the larger retailer must benefit.

If DSD is used to support in-store merchandising, then you have a different story. The manufacturer's representative can give their products the individual attention that increases their sales. The bad thing is that they can also load up the store with inventory if no one is watching.

Bill Bittner
BWH Consulting


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