Supply Chain by the Numbers

- Dec. 1, 2016 -

  Supply Chain by the Numbers for Week of Dec. 1, 2016

Amazon Gets Temp DC Workers On the Job Quickly; Time for a Chief Robotics Officer? Not Peak Oil, but Peak Demand; What Would Made in USA Goods Really Cost?



That's how many days it often takes to get seasonal fulfillment center workers such as order pickers up to speed and ready to go, much faster than has been the case for most distribution operations. Given that Amazon is hiring an amazing 120,000 temporary workers at its US FCs for the peak sales season that runs roughly from November through December, that adds up to a lot of savings. Amazon trainees get hands-on training as early as their first day on the job, which it says has proven to be a huge advantage in getting them up to speed, versus most companies that begin with classroom only training. On the FC floor, temp workers learn how to pack up shipments with help from computer screens that tell them which box size to use and automatically spits out a piece of tape to fit it. Using the Kiva System robots that Amazon acquired in 2012, robots carry shelves full of merchandise to picking stations, where screens show the workers what the desired item looks like and where it is placed so they can pluck it off the shelf quickly and accurately and then into a tote, making for a fast learning curve.




That is the percent of large companies that will create a Chief Robotics Officer role and/or define a robotics-specific function within the business by 2019, according to a new set of supply chain predictions by the analysts at IDC research. Among IDC’s other robot-related predictions: By 2020, robotics growth will accelerate the talent race, leaving 35% of robotics-related jobs vacant while the average salary increases by at least 60% - good news if you are a robotics engineer for sure. By 2018, 45% of the 200 leading global ecommerce and omnichannel commerce companies will deploy robotic systems in their order fulfillment warehousing and delivery operations. And by 2019, 30% of commercial robotic applications will be in the form of a "robot as a service" business model, reducing costs for robot deployment. We’re not quite sure what "robots as a service means," but assume it has something to do with vendors deploying the robotic control software over the Cloud. The future belongs to robots, that's for sure.

That's within how many years global oil demand could actually peak, a possibility sending tremors throughout the industry, as the notion of "peak demand" arriving sooner rather than later becomes a growing reality. Of course, not many years ago, the concern was about "peak oil," the idea based on a theory from a Shell engineer decades ago that global oil output would soon max out. That combined with ever rising demand would lead to oil shortages and skyrocketing prices – a theory that seemed all too real when oil spiked to near $150 per barrel in 2008. But even the peak oil concept was blown up with the introduction of fracking techniques and the unlocking of huge new oil supplies. Add that to peak demand perhaps being reached soon, and prices seem far more likely to remain low than ever spiking again. A Wall Street Journal article this week said China is forecasting its own oil demand will peak in 2030 – and that global demand will max out not much later.



That how much the retail price of an Apple iPhone 7 Plus could rise to if it was made in the US versus China, almost double current pricing. That according to recent analysis by a firm called Marketplace, amid new rumors that Apple and contract manufacturer Foxconn are indeed looking at moving assembly operations to the US in a big way. However, MIT's estimate is quite a bit lower. That analysis begs the question of how much US consumers would actually be willing to pay for goods made in America if the reshoring initiative really gains steam under a president Trump. Other examples: New Balance athletic shoes start at a price of $65, but the American-made pairs start at $165, a significant premium. JCrew's Wallace & Barnes raw indigo selvedge jeans, which are constructed in the US using denim from Japan's Nihon Menu mill, are listed at $248. Its other raw selvedge pairs for men that are made offshore cost $175. But a 42-inch, ultra-high-definition smart TV from Element Electronics, made in South Carolina, was recently selling for $329 at Target, comparable to the price of a similar Westinghouse model ($299, marked down from $449).