Supply Chain by the Numbers

- March 24, 2016 -

  Supply Chain by the Numbers for Week of March 24, 2016

American Apparel Enters the eFullfillment Wars; Legacy of Legendary Intel CEO Upon his Passing;  Target Rethinks Supply Chain Software Development - and Logistics Model; CPOs Think Procurement Teams Lack Talent



That's the number of cities for which apparel retailer American Apparel will soon offer one hour delivery, as the efulfillment wars continue on. Customers in those cities will be able to order on-line or via mobile and receive delivery in one hour or less for some 50 staple type items offered by American Apparel in 79 of its stores serving those markets. To accomplish this feat, American Apparel will use on-demand logistics provider Postmates to provide the service. The orders will actually be placed on Postmates apps, after which each order shows up on a tablet computer in the appropriate American Apparel store. Associates then pick and package each order, after which the Postmates picks up the order and delivers it to the customer. American Apparel has been a pioneer in the use of item-level RFID, and thus can leverage the resulting inventory accuracy to support this type of program. At launch, delivery fees will be $1.99, but Postmates is still determining what the cost for delivery will be after the initial few weeks of the offering. It will be more, we know that.




That's how old former Intel CEO Andy Grove was at the time of his death this week after a long and storied carrier in helping to build one of the world's greatest companies. We remember Grove especially for two reasons. First, the phrase “Only the Paranoid Survive,” title of his bestselling book and a mantra still common today in Silicon Valley and beyond. Even better, when an early Intel was struggling financially in the low margin memory trips business, he famously said to Intel founder Gordon Moore " If we got kicked out and the board brought in a new CEO, what do you think he would do?" Gordon answered without hesitation, "He would get us out of memories." To which Grove responded "Why shouldn't you and I walk out the door, come back, and do it ourselves?" That's just what they did and transformed Intel, using a thought process that may at times come in handy for all of us.


That's the surprising percent of senior global procurement executives that said in a new survey from Deloitte that there their teams lacked the talent and skills to successfully execute their organization'shigher level procurement strategies. Well. That number was actually up from 57% in the previous year's study, and is part of what Deloitte calls a five-year downward trend in matters relating to procurement talent. So what's the answer? Deloitte says better recruitment and training can only be taken so far - and that the right strategy may be to adopt more advanced digital technologies. Deloitte says CPOs need to "look at ways of complementing their talent pool with new assets and tools,” both at a strategic level to improve decision-making and at a tactical level to automate many still manual forms of transaction processing.



That is the rather amazing share of Target's most recent quarter's on-line sales that were either picked up in store or filled from inventory in stores. That factoid amid news this week that Target is rethinking and rewriting much of its supply chain software, saying that the traditional, predictable supply chain model - goods flowing from manufacturers to Target distribution centers to retail stores - is becoming archaic in a new Omnichannel world where customer orders may need to be fulfilled from almost anywhere in the network. Interestingly, Target says it is moving away from the software model it has used for years that involved lots of outsourcing and reliance on packaged software. "The world of packaged software just doesn't serve big businesses well," Target CIO Mike McNamara said. "We're recruiting engineering talent as fast as we can and replacing third parties.” See Target Stores Rethinks Inventory Management, Writes own Apps to Better Leverage Extended Supply Chain in Omnichannel World.