Supply Chain by the Numbers

- Feb. 28, 2013

  Supply Chain by the Numbers for Week of Feb. 28, 2013

Amazon Fulfillment Costs Rise; Who Has the Top Consumer Packaged Goods Supply Chain? TESCO Announces Changes to Food Supply Chain After Horse Meat Scandal; YRC Worldside Finally Finds Profit




The cost of "fulfillment" as a percent of revenue at in Q4, up a full percentage point from 9.3% in Q4 2011. That according to CFO Thomas Szkutak in the company's recent earnings call. As a note, fulfillment costs only include DC operations, not outbound transportation. What is happening? We aren't sure, but plan to look into it. Among other interesting data, Amazon's revenue rose 22%, but that growth is clearly trending down. It was 27% in Q3, and more than 40% quarter over quarter not long ago. For the full year, inventory turns also decreased, interestingly with the same numbers as fulfillment costs but reversed, to 9.3 for 2012 from 10.3 in 2011.




The percentage of retailers in the grocery, mass merchandise, warehouse club and drug store categories that named Procter & Gamble as one of the top three consumer packaged goods supply chains in the annual Kantar Retail PoweRankings survey, which we reported on this week. That kept P&G number 1 again, as it has been for many years running, but not by much, after the company fell 6.9 percentage points to stay just ahead of number 2 General Mills, which scored 27.2%. Who else made the top 10 - and what CPG companies fell off the list? You can find it here: Which Consumer Package Goods Companies had the Best Supply Chains for 2012?


The level of DNA testing that UK retailing giant TESCO says it will now perform on all incoming beef products, after the on-going scandal related to horse meat being found in what was supposed to be all beef at TESCO and now dozens of other retailers and food manufacturers. In addition to the expensive DNA testing, TESCO says it will source not only beef but chicken and other food products "closer to home" and reduce the levels in its food supply chain, which has become "overly complex," TESCO says. "What this complexity in the supply chain has also done is to leave it open to exploitation by rogue elements operating in the processing industry," TESCO's CEO said this week.



Numbers of years since LTL carrier YRC Worldwide (the former YellowRoadway) made an operating profit, as it finally did in 2012. That after a near-death experience in 2009-10, when it appeared very like the company would be forced into bankruptcy and possibly liquidated, after a costly and poorly executed series of acquisitions. In 2012, its operating income was a positive $24.1 million, versus a loss of $138.2 million in 2011. On a full income statement basis including debt and other non-operational expenses, YRC still showed a deep loss, but the specter of the LTL sector's largest carrier going out of business for now has gone away.