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Aug. 21, 2020 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet The State of Global Energy 2020 bullet SCDigest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet New Stock Index

New Cartoon Caption Contest

bullet Trivia      bullet Feedback
bullet New Expert Column bullet On Demand Videocasts



A new report from ARC Advisory analyst Clint Reiser lays out the
landscape across WMS, WES and Warehouse Control System (WCS)
software, detailing the WES value proposition, and describing
important changes in the WES market.


first thought


Supply Chain Graphic
of the Week
The State of US Freight Transportation


This Week's Supply Chain

by the Numbers

Lowes Spending Big to Revamp Distribution Network
Company Finding Success with Reusable Containers for Consumer Goods
US Manufacturing Recovering


Fat Growth in China to Europe Rail Cargo


July 30, 2020 Contest

Show Us Your Supply Chain Wit

It' Back! SCDigest's Weekly

Supply Chain Stock Index



The State of Retailer-Vendor Supply Chain Relationships 2020

Are Things Getting Better and More Collaborative - or Heading in the Other Direction? Third Biannual Study - Please Participate


Weekly On-Target Newsletter:
Aug. 19, 2020 Edition

Cartoon, Top SCDigest Stories of the Week

Revisiting SCDigest's Framework on RFID Process Change

Dan Gilmore

What to Do about Lack of Gender Diversity in Supply Chain Management

Abel Tamanji

Senior Student at University Of Wisconsin-Whitewater

What year did Walmart launch its famous/infamous RFID mandate?
Answer Found at the
Bottom of the Page

The State of Global Energy 2020

After using this column to provide news and comment on the virus pandemic and the supply chain for almost three months, I am behind on my coverage of several major reports and other matters.


That would include my annual review of the excellent BP Statistical Review of World Energy, released by the company each year in late June. The review is a sort of almanac of all matter of energy related data, now in its 69th year, and as always it is quite an interesting and educational read.

The report is full of information on energy production and consumption. Energy of course is at the heart of supply chain in many ways, and central to our lives. A world of relatively cheap, abundant energy would bring prosperity and more income equality to much of the world.



The disruption to our everyday lives caused by the lockdowns has provided a glimpse of a cleaner, lower carbon world.


Send us your
Feedback here

High energy prices have the opposite effect, as we learned in the 1970s and again in 2008.

Energy costs can have a major impact on a variety of supply chain decisions, including network design and how to optimally navigate the tradeoff curve between inventory and transportation costs.

As with so many things, there is some disconnect here as the report is focused on data relative to 2019, while in 2020 energy and almost all markets have been greatly impacted by the virus pandemic. Next year's report summarizing 2020 data will show many changes from this year's report.


In an introduction to the report, BP CEO Bernard Looney notes that the pandemic also "risks slowing progress if the short-term, domestic issues raised by COVID-19 are prioritized over long-term, global challenges, such as climate change."


It is of course interesting that the CEO of an oil company is lamenting the lack of progress in CO2.


The headline news from the report is that primary energy consumption

growth slowed to 1.3% last year, less than half the rate of growth in 2018 (2.8%). That decline in large part is attributable to a slowing global economy, not a true relative reduction in energy use.


The increase in energy consumption was driven by renewables and natural gas, which together contributed three quarters of the expansion.


All fuels grew at a slower rate than their 10-year averages, apart from nuclear.


The report says carbon emissions from energy use grew by 0.5%, less than half 10-year average growth of  1.1% per year, partially reversing some of the unusually strong increase in 2018 (2.1%).


It also means CO2 emissions grew at less than half the rate of energy consumption, primarily through the increase of consumption of lower CO2 energy sources. That said, the average annual growth in carbon emissions over 2018 and 2019 was greater than its 10-year average, BP says.


Switching gears, the chart below from the report nicely summarizes global energy consumption in 2019 by different fuel types and changes from 2018.


As can be seen, incremental change is low. Oil's share of energy consumption fell again, but just barely, down 0.2%, and it retains the top spot with 33% share. Coal's share fell a more substantial 0.5%, but stll generates nearly one quarter of energy consumption.


Renewable consumption grew by 0.5%, and reached 5% share of consumption for the first time.


Other interesting data points from the report include the following:


By country, China was by far the biggest driver of energy growth, accounting for more than three quarters of net global growth in consumption. India and Indonesia were the next largest contributors to growth, while the US and Germany posted the largest declines.


China also drove almost all the increase in oil consumption (up 0.9% globally, slightly lower than the 10-year average of 1.3%). China oil demand rose by 680,000 barrels per day, the largest increase in the country's demand since 2015.


The US posted the largest increase in oil production of any country for the third consecutive year, with its output rising by a massive 1.7 million barrels per day, although this was down from a record increase in 2018 (2.2 million barrels per day).


Oil prices edged a little lower in 2019, with Brent crude averaging $64.21 per barrel, compared with  $71.31 in 2018.


The share of renewables varies greatly by country/region. Renewables produced 6.2% of US energy in 2019, the report says, up from 5.8% in 2018. In the EU, renewables have a much larger 11% share, versus 4.7% from China. In Brazil, it's 16.3%.


By energy source, wind generation provided the largest contribution to growth in renewables, followed closely by solar.


• Nuclear generation increased by 3.2%, its fastest growth since 2004 and well above the  10-year average of -0.7%. China and Japan drove the rise.


As a final note, BP CEO Looney observed that "The disruption to our everyday lives caused by the lockdowns has provided a glimpse of a

cleaner, lower carbon world: air quality in many of the world's most polluted cities has improved; skies have become clearer."


The full BP report is available here: Statistical Review of World Energy 2020

Any reaction to the BP report data? Let us know your thought at the Feedback section below.


On Demand Videocast:

Understanding Distributed Order Management

Highlights from the New "Little Book of Distributed Order Management"

In this outstanding Videocast, we'll discuss DOM, based on the new Little Book of Distributed Order Management, written by our two Videocast presenters.

Featuring Dan Gilmore, Editor along with Satish Kumar, VP Client Services, Softeon.

Now Available On Demand

On Demand Videocast:

The Grain Drain: Large-Scale Grain Port Terminal Optimization

The Constraints and Challenges of Planning and Implementing Port Operations

This videocast will provide a walkthrough of two ways to formulate a MIP, present an example port, and discuss port operations.

Featuring Dan Gilmore, Editor along with Dr. Evan Shellshear, Head of Analytics, Biarri.

Now Available On Demand

On Demand Videocast:

A Blueprint for WMS Implementation Success

If You Want a Successful WMS Project, You will Find the Blueprint in this Excellent Broadcast

This videocast lays out the keys to ensuring your WMS implementation goes smoothly, involves minimal pain, and accelerates time to value.

Featuring Dan Gilmore, Editor along with Todd Kovi of Radix Consulting and Dinesh Dongre of Softeon.

Now Available On Demand


After our column last week noting we've turned from toilet paper shotages to "where's the beef?", our friend David Schneider of David K. Schneider & Company sent us this nice email explaning how the meat supply chain works. Now you know!

Feedback on the Meat Supply Chain:


For beef (and lamb/sheep), there are two stages of meatpacking - Primal and Final.

Primal Cuts are the large cuts - whole sections of the animal, cut away from the carcass, later packed for processing into final cuts.

Some of the larger packing operations run from kill to final in the same complex - the traditional way that people think of a meatpacking plant. But many of the new massive campus operations, including the JBL and Tyson sites in the news, ship under long term contracts meat packaged for retail or portion control use.

For decades the meat supply chain operated at two levels; packing houses that shipped primal-and sub-primal - packaged into vacuum bags and frozen for shipping to grocery stores - where meat cutters cut and package the final cuts for sale at that location.

Today, a sizable portion of the production from the kill line is still primal to package and shipped to other companies/facilities that do the Final cuts. Most of the consumers of primal and sub-primal are wholesale distributors, local butchers, Costco, and Asian grocery, where there is still local meat cutting.

A large portion of the US grocery market no longer operates local meat rooms in their retail locations. Walmart is one significant example of the retail scene, as is most of the Royal Dalheize group (Stop-n-Shop, Giant), Aldi, Lidl, and other growing chains. Those contracts with retailers are under tight margins, costs supported by the typically much higher foodservice contracts with bigger and steady margins.

The supply chain innovation that Tyson, JBL, and the rest employed was centralization and concentration of labor into these large campuses - close to the production of the animals. Our modern network of refrigerated logistics - temperature controls trucks and warehouses - helps facilitate the consolidation of the final steps of meat cutting from local to the market to local to the source.

Primal cuts flow between companies in the meat industry like cash - and interesting features in the USDA regulations allow for long term freezing of primal cuts that can sell later as fresh meat. There are times where hundreds of millions of pounds of frozen primal cuts sit in 3PL freezer warehouses. I suspect at this moment, hundreds of millions of pounds of frozen primal cuts sit in warehouses, unable to move to the market because there are fewer places that can do the final cut. I suspect the owners of this meat don't want to ship these cuts because to ship now erodes the future profit margin of the packaged and portion-controlled product.

The COVID virus exposes a substantial risk of consolidation and full-integration of production in the supply chain.

David K. Schneider
David K Schneider & Company, LLC    


Q: What year did Walmart launch its famous/infamous RFID madate?

A: 2003 - and it never gained any traction.

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