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Supply Chain by the Numbers

- June 5, 2014 -

  Supply Chain by the Numbers for Week of June 5, 2014

Amazon Rolling Out the Kiva Robbots; Reductions in Powerplant Emissions not as Large as it Seems; Paired Truck System Improves Diesel Mileage; Buy American Program at Walmart



The number of Kiva robots that CEO Jeff Bezos said last week will be deployed in the company's fulfillment centers by the end of 2014 - up from about 1300 in three FCs currently. Amazon surprisingly acquired Kiva Systems in early 2012 for $775 million, and has since been very quiet about its intentions for the business. However, it became clear early on that Amazon was not going to sell the orange AGV-like robots, which bring goods to order picking stations, dramatically transforming DC operations, to other companies any time soon. Amazon’s internal demand for both the robots and deployment services is simply consuming the Kiva division's capacity - while keeping the technology out of the hands of rivals such as at the same time.





The overall average reduction in carbon emissions from US power plants that will be required under controversial new rules proposed this week by the Environmental Protection Administration. But that number is not quite as severe as it seems. That's because the reduction targets are based on 2005 emission levels, and between then and now overall CO2 emissions from power plants have already been cut by about 15%. Still, the impact at the state level - where individual targets for reductions are being proposed under the new rules - vary widely. The battle over the new rules is clearly headed to the courts, with opponents saying the changes will cost consumers and business billions of dollars annually in higher energy costs, and proponents disputing those numbers and saying even if true it is worth those costs to reduce global warming risks.


Reduction in diesel fuel consumption in the trailing tractor-trailer in a pair of trucks operating in tandem, using a new system from a company called Peloton Technology, according to reports this week after recent tests relative to improved safety achieved from the concept in Nevada. The system uses radar-based collision mitigation equipment and truck-to-truck communication to automate the platooning relationship between two trucks, also controlling braking and acceleration systems. The lead truck can gain as much as a 4.5% increase in diesel mileage as well, a previous test in Utah found. In the Nevada safety test, the trailing truck ran just 40 feet behind the lead truck, possible because of the millisecond response time of the automated braking system. Human drivers still control the truck's steering, and can turn off the automated system at any time. Peloton says the system will be commercially available in 2015.



The number of active "reshoring" projects, in various stages of development, that Walmart says it is currently engaged in with US suppliers, stemming from the retail giant's announced plan last year to source an additional $250 billion in US made goods over the next 10 years. That news according to a report this week from Reuters. That said, the Reuters report says that many US suppliers are struggling to gain traction with the program, due to issues ranging from a lack of US domestic suppliers to challenges meeting Walmart cost targets. One clear success, however, comes from a company named Element Electronics, which has moved production of flat screen TVs from Asia to South Carolina - using US production as a differentiator at Walmart in today what is largely a commodity-like category.

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