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Supply
Chain by the Numbers |
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- Feb. 8, 2018 -
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Incredible Growth in Amazon's FC Footprint; Declining US Consumer Spend on Apparel; Autonomous Truck Goes Coast to Coast; Japan's Manufacturing Quality Reputation is Shaken |
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26.6 Million |
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That incredibly, is the amount of distribution space Amazon opened up in the US, according to Marc Wulfraat, president of MWPVL International, who follows Amazon fulfillment moves very closely. That data comes from Wulfraat's 2018 supply chain predictions for SCDigest. You can add to that another 12.6 Million square feet Amazon opened in the rest of the world.
Wulfraat also says that MWPVL is aware of an additional 23 Million square feet of distribution space being added by Amazon to the US market in 2018, and that it fully expects that this number will be closer to 30 million by year-end 2018.
To put this into perspective, Amazon's total square footage of warehouse space in the United States is currently equivalent to 3.5 Central Parks and in 2018 this will likely increase to 4.4 times – and that is only floor-level space, not including mezzanines.
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That's how many miles an autonomous truck recently travelled, carrying freight a test run in late January from Los Angeles to Jacksonville, FL A self-driving truck operated by tech startup Embark made the journey, travelling five days along the length of Interstate 10 across the southern United States.
Embark's onboard technology handled nearly all of the highway driving, but a driver was behind the wheel at all times, watching the road and ready to take over if needed – and that driver is what made the test legal, though Embark says the driver will often go hours without needing to do anything. The truck was scheduled to complete its return trip to Los Angeles this week. Embark's current system represents Level 2 automation, where the driver is required to actively monitor the vehicle's progress. The company's goal, of course, is to develop the technology to enable Level 4 automation, where the vehicle can travel on limited, specific highway routes with no driver at all – and it hopes to get there in just a few years.
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500+ |
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That is the number of customers for which Japan's Kobe Steel now says it created fake quality-certification documents for hundreds of thousands of products it shipped them. And Kobe Steel is hardly the only Japanese manufacturer to be caught up in quality or fraud issues. Mitsubishi Materials Corp. and Subaru have also admitted in recent months to manipulating quality inspection data. Nissan Motors disclosed in September that its Japanese factories let unqualified employees perform final quality inspections on some cars - and had been doing so for years. All of this has put Japan's reputation for quality that has fueled its manufacturing prowess at risk, according to a fascinating article this week in the Wall Street Journal. What's more, under a variety of pressures, some Japanese manufacturers have strayed from principles of the famous Toyota Production System that help make them great. TPS places enormous responsibility on line workers at the factory-floor level, known as the gemba, to manage daily operations and generate innovation. Those workers, viewed by many Japanese as craftsmen, have traditionally been guaranteed jobs for life in return for dedication to their company's goals. Now, the WSJ says "The problem today is that many Japanese companies can no longer afford the luxury of guaranteed lifetime employment for craftsmen on factory floors. And delegating so much authority to line workers has left companies exposed to fraud and corner-cutting." |
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That now is the percent US household income spent on apparel and footwear by consumers on average – down about 50% from the 6.2% share of spend that clothing's share of wallet enjoyed in 1977, according to new data from the US Bureau of Economic Analysis and Wells Fargo. So while traditional brick and mortar retail, especially in the department story and apparel segments, has clearly been under stress in recent years, the cause of these woes isn't all Amazon and ecommerce, it also involves fundamental changes in consumer shopping habits as well. Apparel has simply lost its appeal, said Bloomberg last week, observing that "Who needs fashion these days when you can express yourself through social media? Why buy that pricey new dress when you could fund a weekend getaway instead?" There are a variety of other factors involved in this shift, including reduced need for a separate wardrobe for the workplace and off-price retailers such as TJ Maxx gaining market share. But whatever the cause, things are unlikely to change back in apparel retailers' favor any time soon.
