Supply Chain by the Numbers for Week of Dec. 4, 2014

Supply Chain by the Numbers

- Dec. 4, 2014 -

Amazon.com Aggressively Rolling Out the Robots; US Manufacturing Wages Falling; How Low Can Oil Go? Is Walmart Getting Price Duped?



15,000
That's how many of the Kiva robots Amazon.com now says it has deployed across 10 of its fulfillment centers to support order picking. That’s up from a figure of 10,000 founder and CEO Jeff Bezos projected this past May. This a couple of years after Amazon acquired Kiva Systems in a stunning deal worth $775 million, for a company that at the time had just a few tens of millions of dollars in annual sales. Amazon says the robots reduce picking costs by 20%, and allow it to double the inventory a DC can hold. The Kiva robots, which deliver goods to stationary order pickers, can really be said to have ushered in the highly popular "goods to picker" operating concept.

$27.17

That's the current average hourly wage for shop floor manufacturing workers in the 90th percentile, meaning the top 10% of all manufacturing wage earners, according to a new report from National Employment Law Project, a labor advocacy group. That's down 6.1% from where such wages were at in 2003. In fact, manufacturing wages were down about 5% in every quartile of wage earners, from top to bottom. In the auto parts sector, wages for the top 10% were down a stunning 25.8%, from $36.54 to $27.13. The report notes that these declines not only impact individual workers, but reduce the economic benefits to communities from new manufacturing plants that may come their way from reshoring.



$90
The price around which Walmart apparently was selling some Sony PS4s in recent weeks, after Walmart adopted a policy of price matching for items sold on-line by Amazon. Several news outlets reported that some devious consumers were creating fake Amazon web pages showing an Amazon price of some $90 or so for the gaming system - a product that normally sells for about $400. They would show the fake site page on their smart phones to Walmart managers, who would match the ridiculously low price. CNBC, in fact, showed an image from a sign in an unidentified Walmart store saying Amazon prices for PS4s would not be matched "due to fraud." The perils of price matching.



$30
That's how low global oil prices per barrel might go in early 2015, according to Canadian Natural Resources Ltd. Chairman Murray Edwards last week. It won’t last though, as Edwards expects oil prices to recover from their before stabilizing at $70-75 dollars later in 2015. Still, that would be 20-25% lower than the $100 or so the market has seen over the last couple of years. While the lower cost of oil, driven by soaring US production and weak global demand, has driven US gasoline prices down by almost one-third, for some reason the impact on the diesel fuel prices that matter to shippers has been much less, with prices only down about 10%.