Supply Chain by the Numbers for Jan. 3, 2019

Supply Chain by the Numbers

- Jan. 3, 2019 -

The Rise of On-Demand Warehousing; US Manufacturing Growth Slowing; Amazon to Expand Whole Foods Network; Robotic Picking Company Raises Big Bucks




1.5 Million
That's how much square footage of distribution center space Walmart leased on a short term basis for ecommerce fulfillment for the peak 2018 season, according to a report from the Wall Street Journal. Finding and leasing that space was accomplished through use of the Flexe on-line platform, sort of an Airbnb for the warehouse sector. The term now being is used to describe this is "on-demand warehousing." The idea is this: at any given time, in a given market area, some companies have more warehouse or distribution space than they need, and others are looking for additional space, perhaps on a temporary basis. Of course, there have been 3PLs for decades willing to lease space in "public warehouses" on a short term basis. But finding and contracting that space wasn't always easy. The new platforms such as Flex, UPS , XPO Logistics, Flowspace and others are offering address those issues, and can also make available space from non-3PL companies that are not fully utilizing the space they have under their control.


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That's how many cities in which Amazon now offers 30-minute grocery deliveries under its Prime Now service, with another 60+ markets having a two-hour delivery option. But Amazon's plan is to bring those capabilities to all of the roughly 475 grocery stores it acquired when it bought Whole Foods 2017. What's more, there were reports this week that Amazon plans to greatly expand its number of Whole Food stores to more suburban and geographic areas in which it has not yet had a large presence. Amazon did not provide without any specific numbers for the reported store expansion. This yet another salvo in the grocery wars being waged around ecommerce and rapid delivery or pick-up services. Grocers have been keeping prices low and adding new services as consumers shift more of their shopping on-line. Word is that since the Amazon takeover, sales at Whole Foods are rising, but profits aren't. But with Amazon finally making money now from the rest of its empire, maybe that is just fine with CEO Jeff Bezos for now



54.1
That was the US Purchasing Managers Index score for December, in numbers released Thursday from the Institute for Supply Management. While still solidly above the 50 mark that separates US manufacturing expansion from contraction, it still also represented a decrease of 5.2 percentage points from the November reading of 59.3. So US manufacturing is growing, but at a now slower rate than recent months. More concerning, the New Orders Index registered 51, a whopping decrease of 11 percentage points from the November reading of 62.1, and just above that key 50 mark after many months near or above the 60 level for this key indicaetor of likely future manufacturing activity. ISM notes "Comments from the panel reflect continued expanding business strength, but at much lower levels." However, ISM added that the Customers' Inventories Index remained too low — a positive heading into the first quarter of 2019 - but that good news was balanced by the fact that the Backlog of Orders index declined to a zero-expansion level.




$23 Million
That's how much RightHand Robotics has just raised to support its efforts to develop piece picking robots for distribution centers. That investment came from private equity firm Menlo Ventures, Google parent ABC company, and other firms. That brings the total raised by the four-year-old company to $34.2 million. SCDigest has covered Robotics for several years now – the Boston area company incorporates artificial intelligence and cameras that perceive depth and color with a robotic arm that uses a unique polymer gripper with a suction cup to pick up objects, say out of a static shelving location. Automating the piece picking process has become sort of the Holy Grail of DC automation – witness the now annual Amazon robotic picking contest – but beyond the advances in the physical dexterity of the new age robots, it is the use of AI that is really changing the game.