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Oct. 16, 2020 - Supply Chain Digest Flagship Newsletter


This Week in SCDigest

bullet The Pandemic and the Supply Chain: The End of the Beginning? 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
US Manufacturing Stagnation

This Week's Supply Chain

by the Numbers

Retail Holiday Sales will be Weak Despite ecommerce S urge
P&G Shareholders Say Go Green
IMF Says 2020 Global GDP Drop will be Less than Previous Forecast


No Wisconsin Subsidy for Foxconn


Oct. 14, 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:
Oct. 14, 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

In material handling systems, what does the terms "PANDA" stand for?
Answer Found at the
Bottom of the Page

The Pandemic and the Supply Chain: The End of the Beginning?

One of my favorite quotes is from Winston Churchill, who after the British routed Rommel's forces at Alamein, driving German troops out of Egypt in World War II, said "This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

I am not even sure we've even reached the end of the beginning when it comes to the Corona virus. There was certainly a lot of bad and scary news on the virus front this week. That includes:

US Coronavirus infections jumped by almost 17% over the past week as the number of new cases increased in 38 states and Washington, DC, according to data from Axios.


American Eagle is hardly the only one thinking this way, as safety adds to cost reduction and reducing labor challenges in making DC robots very attractive.


Send us your
Feedback here

That means the US is headed solidly in the wrong direction, at a dangerous time, as many public health predict the fall and winter season will see infection rates soar again, perhaps to levels exceeding last spring. The hope was the pandemic would be under control before then, but that is not going to happen.

The US in fact saw an average of 51,000 new cases per day over the past week, and 59,000 Oct. 15th, near the peak in July of 62,000 in one day.

The problem is not only in the US. This week, new cases of coronavirus infections in Germany soared to 6,638 on Wednesday, reaching a daily level not seen since the start of the pandemic, prompting new rules regarding gatherings and face masks.,

With UK infection cases also soaring, London will move to "high" alert status from "medium" at midnight on Friday The "very high" alert level forbids socializing, forces pubs and bars to close and prohibits travel outside the area.

I will admit I am surprised the US economy did not tank more than it did from the pandemic. Yes, Q2 GDP dropped a record 32.1% in the quarter, more than three times the old record of about 10% in the 1950s.

But for many, it didn't feel that way. After a significant but rapid drop, the stock market has mostly been up strongly since then. White collar layoffs have been surprisingly low, even as other jobs, such as those held by millions of US restaurant worker, have been eliminated, with little prospects for laid off workers finding something new, short of at an Amazon fulfillment center.

"Seven months into the pandemic, small business owners don't know how much longer they can hold on" a news headline on CNBC said this week.

Then this from a recent article from NJ "Tenants, unable to pay rent because they have lost their jobs or fallen ill with the virus, are accumulating thousands of dollars in unpaid rent that may eventually lead to their eviction" when the bans on evictions end someday. In turn, "Landlords, deprived of income for months but unable to evict nonpaying tenants, are struggling to pay mortgages and property-tax bills."

Despite some positive signs and likely another big round of stimulus spending, I feel there is another economic shoe still to drop.

As I have written in previous columns, I am thinking all the time about the trickle down impacts of the behavior and economic changes we are seeing. So in an example I've used before, stay at home workers means empty office buildings, which means no customers for lunch and coffee spots.

Office cleaning and janitorial workers I assume have been let go in large numbers. With no driving to work every day, cars need fewer oil changes, less frequent buying of new tires and repairs, and eventually demand for new cars will fall as well.

Here's another one. Movie theater chains are shutting down and appear on the verge of extinction. Besides the layoff of theater employees, I assume popcorn and Skittle sales are down big too for vendors of those products.

And with no venues (and infection concerns of its own), the movie industry is shutting down substantially, meaning literally a cast of thousands - from actors to make-up people - are now without work too.

There are many other examples. The deep 2009 recession wasn't at all like this in terms of wiping out whole sectors, maybe forever.

So maybe none of that matters and we have strong recovery. That's what the stock market is betting. We'll see.

So turning at last to supply chain, 6+ months into the pandemic, here are what I see as the top supply chain impacts.

Focus on "Resilience": There have been numerous articles on the new imperative for supply chain resilience, in the face of wild swings in supply and demand from the pandemic. The key question: will businesses change behaviors, which might include the often tough task of mapping a multi-tiered supply chain, moving at least some production to other regions, duel sourcing, etc.?

Such resilience often comes at a cost. Will companies really follow through on investments in resilience, which largely didn't happen after the 2011 Japanese tsunami caused similar calls for resilience?

eCommerce Dominance: Obviously, ecommerce and Amazon were megatrends far before the pandemic. Now it's simply gone on steroids.

Year over year growth in ecommerce sales had been running around 14-15% for many years - what most would consider a robust rate. Now, a report from real estate firm CBRE this week predicts an incredible 40% rise in November and December on-line retail sales.

We are in a whole new era. Consumer goods companies selling through department stores and mall retailers have almost no choice but to go direct to consumer, with Nike's Consumer Direct Acceleration initiative leading the way. At the recent CSCMP virtual conference, Target supply chain VP Arthur Valdez floated the idea of a "logistic hub" that would locally consolidate on-line orders for many vendors and orchestrate precision last mile fulfillment or pick-up for consumers - the new retail store.

I, Robot: As with ecommerce, the virus is simply accelerating the existing trend of robotics, notably in distribution.

"During non-Covid times, if demand grew by 50% I would go hire 300 more people," Shekar Natarajan, senior vice president of global inventory and supply chain logistics for American Eagle said in an interview after deploying 26 piece-picking robots. Natarajan added that "It's really tough because you're also trying to make sure you're keeping the associates safe. You cannot actually bring in 1,000 to 2,000 untrained people into the distribution facility and maintain safe working conditions."

American Eagle is hardly the only one thinking this way, as safety adds to cost reduction and reducing labor challenges in making DC robots very attractive.

Changing Relationships with Consultants: Supply chains use lots of consultants. Many are finding now those consultants really don't need to be on-site quite so much or at all, which has the benefit of eliminating often high travel costs, while improving the consultant's lifestyle.

On the other hand, with so many still working from home, it is challenging to really get consultants fully engaged in some cases. I don't know exactly it will play out, but I suspect the model for using consultants will be very different 5 years from now than it was pre-pandemic.

All these and many more are going to make the world a very different place - we may not have even reached the end of the beginning.

Any reaction to Gilmore's thoughts on the virus and supply chain? Let us know your thoughts at the Feedback button 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


Feedback will return next week.


Q: In material handling systems, what does the terms "PANDA" stand for?

A: Print and Apply, as in bar code labels for cartons on a conveyor.

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