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Supply Chain by the Numbers
   
 

- Nov. 22, 2013

   
  Supply Chain by the Numbers for Week of Nov. 22, 2013
   
 

Supply Chain Drives Margins at Home Depot; 3PL IT Gap Still High but Falling; YRC Worldwide in Financial Trouble Again; Global Warming Shake Down

   
 
 
 

.35

That may not look like a big number, but it represents the percentage point gain in gross margins achieved in Home Depot's just ended third quarter, and a result highly touted in the company's recent earnings call. Why are we noting this? Because Home Depot's CFO cited supply chain improvements as the main factor in that gross margin improvement to 34.9%. “Our supply chain story is actually one of evolution,” CFO Carol Tomé said. "As you get more experience, you get better." In the past five years, under the leadership of Mark Holifield, Home Depot has transformed its supply chain from a vendor direct store delivery model to one that uses a network of 18 regional cross dock distribution centers, reducing both costs and inventory levels.

 
 



 
 
 

43

Number of percentage points in the 3PL "IT Gap" as captured in this year's 3PL report, led for the 18th year by Dr. John Langley of Penn State. That persistent gap represents the difference between the percentage of shippers who say 3PL IT capabilities are very important (98% of survey respondents this year) and the percentage who say they are satisfied with 3PL IT capabilities (53% this year). As large as this year's gap is, the metric has actually been shrinking over time, though somewhat flattening out over the past few years. But by way of comparison, in 2002 the gap was 62 percentage points, with the reduction since them mostly the result of growing satisfaction with 3PL technology capabilities. 3PLs - up your technology investments!

 
 
 
 
 

$1.6 Billion

The amount that troubled less-than-truckload carrier YRC Worldwide (the former Yellow Roadway) says it owes in various debts - loans and bonds - that it can't pay back unless the Teamsters union extends through 2019 a series of wage and benefit concessions made a few years ago through 2015 to save YRC from imminent bankruptcy then - and apparently again now. That according to a new video that the carrier sent to workers on DVD sometime this week. It appeared that YRC over the past year had dodged the near-death experience it went through in 2009-11, as it began making operating profits for the first time in years after a series huge losses stemming from a rapid stream of acquisitions in the 2000s. But apparently many analysts were quite aware of the big debt payments due over the next year and the "covenants" associate with those loans.

 
 
 
 
 

$100 Billion

Amount of dollars that a group of developed economies pledged in 2009 to fund annually starting in 2020 that will then be distributed to more than 100 developing economies to help them compensate for environmental damage that occurs from global warming and/or to help pay for extra costs to move to low carbon energy technologies. That number became a big issue at the UN Global Climate Summit this week in Warsaw, as developing economy interests (which include China, India and Brazil, by the way) are demanding a firm ramp up of funding between the $10 billion or so contributed this year and the $100 billion promised starting in 2020. The US is contributing some $2.7 billion to the effort in 2013. It's all about the money, as usual. Wait for more fireworks down the road.

 
 
 
 
 
 
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