Supply Chain by the Numbers: Week of September 10, 2009

-September 10, 2009


This Week’s Supply Chain by the Numbers – Union Pacific, Kellwood, Food Safety, Cadbury India


The Supply Chain and Logistics Numbers Worth Knowing This Week: Union Pacific Improves Performance Ratio, In-Season Supplier Cost Increase for Kellwood, New Food Safety Order of the Day, Cadbury India Looks Sweet as Chocolate to Kraft



The Q2 improvement in Union Pacific’s operating ratio – basically a measure of operating costs per dollar of revenue. This kind of performance, seen to a slightly lesser degree at all but one other rail carrier, is astounding, given the dramatically lower freight volumes in the quarter, and due to factors such as aggressive cost cutting, relative ability to hold prices, on-going productivity gains, and increased outsourcing (making overall costs more variable with volumes than the past).




The per unit cost increase that apparel maker Kellwood incurs from US domestic suppliers for in-season replenishment goods versus Asian sources. However, the company increasingly goes this route, buying the initial run of clothes from China, but then replenishment units from US suppliers to more quickly react to actual demand, according to Kellwood COO Michael Saunders in an article this week.


Number of hours any US food-related company now has to electronically report any fears about serious food contamination to the FDA, under new rules announced this week. In the past, a company only had to report when there was a belief that someone was actually sickened by a food product.


The growth rate of the chocolate market in India – already at some $500 million, and dominated by Cadbury. It is Cadbury’s strong position in many such fast-growing emerging markets that make it an attractive takeover target for Kraft, which made an offer for the company this week.