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Supply
Chain by the Numbers |
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- Feb. 25, 2021
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Amazon Pays Bonuses to Quit FC Jobs; Forecast for 2021 GDP Growth Headed Higher; Huge Valuation for Warehouse Robot Maker; Home Depot's Low Inventory Growth |
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$5000 |
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That is the maximum amount Amazon will pay employees at its fulfillment centers to quit their jobs. That news after the program was communicated last week to workers at its Bessemer, Alabama, where a mail-in ballot unionization vote is currently underway. Because that FC has been open less than a year, it was the first time workers there had seen the program, and thought it was an Amazon plot to get rid of workers who would vote to organize. But it turns out the program was invented by Zappos which was acquired by Amazon in 2009. It is called "The Offer," as it was at Zappos. The resignation amount grows $1000 for each year an FC employee works through peak season, up to that $5000 max. So the deal has nothing to do with union busting. However, in a 2008 essay reviewing the practice, the Harvard Business Review framed the tactic as a way for Zappos to filter out those who "don't have the sense of commitment they are looking for."
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That is the revised forecast from the economists at Bank of America for US GDP growth in 2021, up from 6.0% previously, in a research note this week. The note said the bank has become "more convinced" that the economy is set for a rebound after the COVID-19 pandemic, expecting big jumps in consumer spending. BofA isn't the only firm bullish on the US economy. Deutsche Bank economists also upgraded their 2021 forecasts for US GDP growth on expectations of a bigger stimulus package, predicting growth of 7.5% for the year. Q1 forecasts are also increasingly bullish, with Goldman Sachs predicting 6% GDP growth, Morgan Stanley, 7.5% and JP Morgan Chase at 5%. |
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14.4% |
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That was the growth Home Depot's latest fiscal quarter inventories, according to its quarterly earnings call. That even though sales jumped 25% in the quarter, powered by a huge increase in on-line sales, which soared 83%. Was that accomplishment the result of excellent inventory management? Maybe in part. But a bigger factor may have been the supply challenges seen in many product categories, as vendors struggle to keep up with demand. Home Depot's profit rose less than sales growth, at 15%, with the company sighting rising supply chain costs in dampening profitability. But 2021 may be a tough year for Home Depot and other retailers given the high growth comparisons with last year. The company said that if recent demand levels continue, comparable store sales will be flat or just slightly positive in 2021. |
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That is the valuation of order picking for distribution robot maker Berkshire Grey, after it used an increasing common trick to make itself a public company. That huge valuation for a company that projects it will have only $59 million in 2021 revenues, and not become profitable for at least three years, meaning the company is worth about a whopping 40 times estimated current year sales. Berkshire Grey is achieving this by being acquired by Revolution Acceleration Acquisition, a so-called special-purpose acquisition company that exists only to quickly take companies public. The deal is expected to provide Berkshire Grey up to $413 million in cash. The company, founded in 2013, develops systems that use artificial intelligence, mobile robots and scanning, gripping and sensing technology to pick orders and reduce operating costs in distribution centers. Customers include Walmart, Target, and FedEx. Mobile robit maker Locus Robotics said earlier this month that it raised $150 million in new funding that values the company at about $1 billion.