Supply Chain by the Numbers

- Nov. 1, 2018 -

  Supply Chain by the Numbers for Week of November 1, 2018

Kroger to Commit to Robotic DCs; Sealed Air Promises All Green Packaging; US Manufacturing Growth Slows but Still Strong; Big Bucks Going to Fund Last Mile Delivery Companies



That is how many how many high tech, robotic distribution centers from a UK company called Ocado that grocery chain Kroger is expected to construct over the next few years. That will start with an order for three automated DCs by the end of the year, according to a report from Reuters this week. Kroger first announced the partnership with Ocado in May. Ocado is actually an on-line grocer that developed this automated system for its own facilities before marketing it to other grocers. The Kroger deal is Ocado's biggest yet, exceeding all of the warehouses the firm has built or plans to build with Morrisons in Britain, Casino in France, Sobeys in Canada and ICA Group in Sweden. In fact, Ocado will not only develop but also operate those sites in the US. Ocado said the terms and fee structure of the Kroger deal are similar to those for its other transactions to-date, combining up-front fees and ongoing capacity fees.



That is the ambitious goal for how much of its packaging materials that Sealed Air promises will be recyclable or reusable by 2025. That according to an announcement this week by the company, known or its bubble wrap products. It added that it would invest in innovation and design measures to slash the environmental impact of its packaging, in addition to working in collaboration with partners worldwide to increase recycling rates. Sealed Air has also set a target to achieve 50% average recycled content across all its packaging, with at least 60% of material to come from post-consumer recycled content. Those goals will in part be achieved, the company said, by additional investments in its bio-based packaging brand Plantic and EcoPure plant-based polyethelene foam packaging.



That was the level of the October Purchasing Managers Index, as released Thursday from the Institute for Supply Management. That was down from 59.8 in September and a scorching 61.3 in August, consistent with other indicators that US economic growth is slowing a bit. But at 57.7, the index is still well above the 50 mark that separates manufacturing expansion from contraction, and marks the 26th straight month the index has been positive. The New Orders Index was also down, falling 4.4 percentage points to 57.4. While still showing growth in new orders, that index was below the 60 mark for the first time since April 2017. Meanwhile, commodity and input costs continue to rise, with the Prices Index registered 71.6, a 4.7-percentage point increase from the September reading of 66.9, indicating higher raw materials prices for the 32nd consecutive month, with prices accelerating month over month.


$500 Million

That is the current valuation of ecommerce delivery firm Deliv, after it received another $40 million in funding this week. Rival Instacart amazingly raised $600 million in funding earlier this month. Target last year bought Shipt, a grocery delivery startup similar to Instacart, for $550 million. New investors in the latest Deliv funding include Alphabet Inc.'s Google and rental-car firm Enterprise Holdings, Deliv said. Previously Deliv raised over $40 million from investors including mall owner GGP Inc. and UPS. Deliv has carved out a niche in the competitive landscape by not emphasizing its brand with shoppers, instead working behind the scenes to provide logistics software along with a crowdsourced fleet of drivers to make deliveries. Scale is what is attractive to customers such as Walmart – Deliv already operates in some 1400 metro markets. Walmart, the country's largest grocer, plans to offer same-day grocery delivery in 100 metro areas by the end of the year, using crowdsourced delivery companies including Deliv, Postmates and DoorDash. Walmart is also testing its own crowdsourced system called Spark Delivery, in part because delivery companies aren't yet available to service the thousands of stores Walmart has in small towns and rural areas.