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Supply Chain by the Numbers

- Nov. 1, 2013

  Supply Chain by the Numbers for Week of Nov.1 , 2013

Food Stamp Risk at Walmart; Union Pacific Keeps the Profit Machine Going; CFOs, CSCOs Find Value in Collaboration; eBay Finds its Same Hour Delivery Shutl



Believe it or not, that is the percent of all US food stamp value that is spent at Walmart. Why is this a supply chain issue? Because this week, extra food stamp funding put in place during the stimulus will expire, cutting some $16 billion out of the program over the next three years. Simple math says that could reduce Walmart revenues by almost $1 billion annually. Both Walmart and Target have recently cited the impact of the food stamp cuts in lowering revenue forecasts for the rest of 2013. Kroger is also worried about the impact, and has said it will lower prices on some items and take the margin hit to boost sales.




The incredible operating ratio (operating expense divided by operating revenue) in Q3 at rail carrier Union Pacific, an all-time record. The profits at the rail carriers keep rolling on, despite largely sluggish volumes. The improved operating ratio led to net income increasing a bit to $1.15 billion from $1 billion in Q3, according to UP's recent quarterly earnings call, on what the company said were flat total car load volume. Operating revenues rose 4% even with the flat volumes, indicating rates were up by about that amount.



Maximum number of minutes in which on-line consumers should expect to receive their orders in markets served by Shutl, which was just acquired by eBay. Shutl, which has been operating in the UK, is a web site that links local couriers to on-line orders, depending on each courier's location, availability, cost and other factors. Shutl's record is apparently a 15 minute delivery from time of order, including the courier stopping at a store to pick up the goods. Couriers, which have generally served B2B markets to date, have been recognized as kind of a wild card in the efulfillment wars. Ebay is expected to expand its eBay Now same-day program from four markets currently to as many as two dozen next year, saying the fulfillment center-based approach of is already a dated approach. We'll see.



Percentage of companies that grew their EBIDTA more than 5% last year among companies in which the CFO said he or she had "engaged" with the head of supply chain. Conversely, only 22% of companies saw 5% or more EBIDTA growth where such CFO-supply chain engagement did not occur. That according to a new study from Ernst & Young. The new study says companies are realizing the power of such collaboration: 70% of the CFOs and 63% of the supply-chain heads responding to the survey say their relationship has grown more collaborative over the past three years

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