Supply Chain by the Numbers

- Sept. 24, 2015 -

  Supply Chain by the Numbers for Week of Sept. 24, 2015

China Adding Big Subsidies to Encourage Deployment of Factory Robots;  Are US Infrastructure Woes Hurting Competitiveness? Huge New Home Depot Fulfillment Center; Now a Truck Technician Shortage?


$148 Billion

That's how much China's Guangdong province has budgeted to encourage some 2000 manufacturing companies to replace humans with robots, using subsidies and tax incentives to encourage the transition. That according to a story this week on the ABC news web site. Many other provinces are setting up similar programs, often under the banner of "Man for Machines." Almost unbelievably, Guangzhou, the provincial capital of Guangdong, aims to have 80% of manufacturing there automated by 2020. Perhaps contrary to the perceptions of most, not only are rising wages a factor in the Chinese move to robots, as well as improving product quality, but also high levels of turnover and factory workers shortages. "Frontline workers, their turnover rate is really high. More and people are unwilling to do repetitive jobs. So these two issues put the manufacturing industry in China under huge pressure," ABC quotes one Chinese manufacturer as saying.




That was the position of the US in terms of logistics infrastructure quality, according to a 2014 report from World Economic Forum, as highlighted last week in a new report on the subject of infrastructure from the Business Roundtable, a high powered collection of CEOs from many of the country's largest companies. That ranking, putting the US behind countries such as Japan and many European nations, is not nearly good enough, the Roundtable says, endangering US competitiveness and future prosperity. The US needs much higher levels of infrastructure spending, the report says - though fails to spell out how that can best be achieved, the key question. We'll note the biannual logistics competitive index from the World Bank placed the US as a much higher number 5 in terms of infrastructure in 2014.

1.6 Million

That's the size of a new eFulfillment center just opened by Home Depot near Toledo, OH, the third and largest FC the home products giant has opened to serve its growing ecommerce business. That's a big facility indeed. The first FC was opened near Home Depot's headquarters in Atlanta, GA, followed by a second building on the West Coast. By adding the Northwest Ohio location, "Geographically, this gives us reach to all of our customers zip codes, about 90% of the U.S. population, within two shipping days." Scott Spata, VP of Home Depot Direct Fulfillment, told a local newspaper. When the facility is fully up and running in 2016 it will employ about 400 in normal times and 600 in the Christmas season.



That's the number of new truck maintenance personnel that will be needed by 2022 to meet market demand. Another 75,000 diesel engine technicians will also be needed, according to the US Bureau of Labor Statistics, as recently noted by the American Trucking Associations. So now it appears that in addition to the on-going severe driver shortage we've been hearing about for years, a truck mechanic shortage may also be looming. We're not sure what this says if there really is such a technician shortage coming, as these are pretty well paying jobs with a normal lifestyle versus driving a truck. Maybe driverless trucks will someday fix the driver shortage - but someone will still have to maintain and fix them.