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Supply Chain by the Numbers
   
 

- Sept. 20, 2013

   
  Supply Chain by the Numbers for Week of Sept. 20, 2013
   
 

Mondelez Battling Massive SKU Bloat; UN Climate Report Dialing Back Warming Predictions - Maybe; Odd Compensation Deal for Bangladesh Apparel Victims; DRAM Factory Fire Shows More Supply Chain Risk

   
 
 
 

74,000

 

The staggering number of SKUs that food giant Mondelez says it managed globally until recently, leading it to see average revenue per SKU to be just one-third of many of its competitors. That according to Daniel Myers, EVP of Integrated Supply Chain of the $36 billion snack food company that split off from Kraft in 2012, at an investment conference two weeks ago. To attack this problem, as part of its ambitious supply chain transformation program, Myers said Mondelez is dramatically reducing its number of suppliers (where supplier bloat leads to too many ingredients that somehow cause excess SKUs) and more importantly focusing on true customer needs to drive its product assortment. He said one product line in Europe is on pace to reduce SKU counts from 4000 to 2500 by 2016.


 
 



 
 
 

1-2.5

Number of degrees Celsius that world temperatures are "likely" to rise in the next 70 years, the period in which CO2 levels in the atmosphere are expected to double from recent totals. That from a draft report from the UN's Intergovernmental Panel on Climate Change (IPCC), which last issued its much anticipated report in 2007. Notably, that prediction is actually down from the 1-3 degree C rise estimated in the 2007 report, and comes as the IPCC is said to also be backing off a bit on the globe's level of "carbon sensitivity," after 16 years of flat temperatures. IPCC officials are saying not to rely too much on a draft report, amidst what is surely extreme pressure from many climatologists to not back off of previous warming estimates.

 
 
 
 
 
$77 Million

The estimated total payout to the families of workers killed in two apparel factory disasters in Bangladesh, one a fire that killed more than 100 workers in late 2012 and then a building collapse earlier this year that killed more than 1100. The whole process is unusual if not strange for several reasons, among them the fact that the Western brand and retail companies that are in negotiations for the compensation did not own the factories where the tragedies occurred. Additionally, just a subset of Western firms using contractors operating in the facilities are participating in the compensation programs, some saying they fear additional lawsuits if they join the negotiations. Those include Walmart and Benetton. That reasonably large sounding total payment number will actually only provide some $33,000 per family of the deceased victims, however.

 
 
 
 
 

16%

Substantial level of the world's dynamic random access memory (DRAM) chips, used to store data in personal computers and mobile devices such as smartphones and tablets, produced by a single factory in China - a plant that sustained substantial fire damage on Sept. 4. A spokesman for South Korea's SK Hynix, which owns the factory, said last week that although some production was back up within three days of the blaze, "It's still too early to give the estimate of the damage and to predict when full operations may resume." And that may be delivering supply chain disruptions to many high tech and consumer electronics gear makers, though existing inventory levels in the pipeline are said to be high.
"Hynix is in a relatively advanced position in the global memory chip market, so even a single incident at one plant will have a domino effect," said Wang Jun, of research firm Analysys International.

 
 
 
 
 
 
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