Supply Chain by the Numbers for Week of July 16, 2015

Supply Chain by the Numbers

- July 16, 2015 -

Small Cars Struggle to Remain Built in USA; 99% RFID Read Rate not Enough for One Shoe Retailer; Lego's Long-Term Goal for Plant-based Plastic; US, Euro Ports Lag in Productivity



$57.00
That's the average compensation per hour (wages and benefits) that it costs Ford for UAW workers in the US currently, according to data from the Center for Auto Research. That as compared to $75.00 per hour before the recession and revised labor contracts, which pared benefits and extended so called tiered wage structures for new versus longer term employees. This is timely data, as there have been several announcements recently about US car makers moving production to low cost countries. That includes Ford, which last week said it will end production of the Ford Focus and C-Max wagon at a factory in Michigan in 2018 and move those lines to an as yet undetermined other country. Toyota is shifting production of its Corolla compact to Mexico in coming years after three decades of building it for North American customers in Canada. Honda last year began shipping its compact Fit to the US from Mexico, and Mazda is now building its Mazda 3 and Mazda 2 model there. It is very difficult to economically build low profit small cars in the US.

99%

That was the read accuracy level for taking in-store inventory counts using RFID tags and readers at Peltz Shoes and its six stores in the Florida market. But that wasn't nearly high enough, it turns out, as the small chain announced somewhat strangely in a press release two weeks ago that it was dumping item-level RFID and returning to bar codes and the existing UPCs on each shoe box. With 300,000 pair, the 1% read failure rate meant 3000 pairs of shoes could not be tracked, causing inventory accuracy issues and expensive extra labor costs. What's more, the labels with the RFID chips inside cost Peltz 11 cents each, costs which started to add up. It also said the tag printer failed to encode a lot of tags, again leading to extra labor costs. You can read the whole story of this interesting bit of news here: Small Shoe Store Chain Peltz Decides to Publicly Dump RFID.



0
That's how many North American ports are in the top 10 in terms of container movement productivity, according to new analysis from The Journal of Commerce. European ports were shut out as well. Rather, the top 10 includes six ports in China, two in the United Arab Emirates, and one each in Japan and South Korea. The rankings were based on the average of the gross moves per hour in 2014 for each ship call recorded. Gross moves per hour for a single ship call is defined as the container moves (onload, offload and repositioning), divided by the number of hours the vessel is at berth. Port Jebel Ali in the UAE topped the list, at 131 moves per hour, followed by Tianjin in China at 127. Tops in the US was the Port of Baltimore, at 84 moves per hour. The Port of LA managed 76 moves per hour.



15
That's how many years iconic toy maker Lego is expecting its research efforts will take to come up with a new plant-based material for its bricks instead of the current plastic base. The effort of course is to reduce the company's carbon footprint, much of which is driven by the oil-based acrylonitrile butadiene styrene (ABS) plastic the company has been using since 1963 (it was another material before that). "The ultimate prize would be for us not to notice one brick from the other," said a Lego executive, meaning a comparison between current bricks and those non-plastic versions in the future. The effort won't be easy. Lego tolerances are very tight (four thousandths of a millimeter), something ABS can handle well. Plant-based plastics- not yet. The sharp decline in oil prices and thus traditional plastic costs present another barrier – a new material of course also has to pass financial muster. Will consumers pay more for "green" Legos? As usual, that is the multi-billion question.