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Supply Chain by the Numbers

- May 21, 2015 -

  Supply Chain by the Numbers for Week of May 21, 2015

Cisco Thinks Analytics Can Reduce Its Electric Bill Big TIme; Target Rolling Out RFID to Support Ecom; Impact of Rising Minimum Wage on DC Labor Costs; On-Line Sales Still Growing Rapidly



That's the compound annual growth rate of ecommerce sales since 2008, according to information released this week by IHS Global Insights. That means on-line sales are doubling about every 5 years - and it doesn't look like that growth is going to slow any time soon, with Q1 growth of 14.5%, according to IHS. Walmart, meanwhile, reported its ecommerce sales in the just ended quarter were up 17%. This growth is of course causing etailers and carriers of all sorts to rethink their supply chain networks, putting fulfillment centers closer to consumers, shipping direct from stores, and using various customer pick-up strategies ("click and connect").




That's what the minimum wage will rise to in the city of Los Angeles by 2020, after such a measure passed its city council this week by a 14-1 vote. Several other cities, including San Francisco, Seattle and Oakland, have already approved similar increases, and dozens more are considering doing the same. To SCDigest, the interesting dynamic will be the extent of the ripple effect that will serve to push manufacturing and especially distribution center wages higher - if workers can get $15.00 per hour in fast food. How high and how fast will be the questions, but this is something supply chain executives need to be looking at right now. Many DC workers do not make $15.00 currently.


That's the reduction in electricity costs that tech giant Cisco thinks it can achieve at dozens of factories across the globe through use of advanced analytics. According to its VP of Supply Chain John Kern at the Gartner Supply Chain Executive Summit last week in Phoenix, Cisco is starting by upgrading sensors on every piece of equipment at a factory in Malaysia, where it will look for insights about how power there is consumed. Take the approach to a global level, especially in regions where electricity is priced differently by time of day, and Kern is convinced the analytics will show the way to major potential decreases in power consumption that will save many millions of dollars.



That is the percentage of its on-line orders that are currently designated for store pick up at Target, according to a corporate blog post this week. That post was actually primarily written to announce that Target will soon roll out an item-level RFID program for its vendors. The company says the RFID rollout will start in a small number of stores late this year, then expand to all Target stores in 2016. The program will include key categories like women's, baby and kids’ apparel and home décor. A big driver of this initiative? Improved inventory accuracy in store, so that when those customers come to pick up their orders, the merchandise really is there.

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