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Supply
Chain by the Numbers |
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- July 15, 2021
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Inflation Rate Keeps Rising; Growing Ranks of Amazon Aggregators; Item not Delivered Fraud Increasing Rapidly; Walmart to Roll Out Robots in DCs |
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7.3% |
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| That was the year over year increase in the US producer price index (PPI) in June, the largest 12-month increase in the cost of business to business goods since the government started tracking 12-month data in November 2010. As recently as December, the 12-month change in PPI was up only 0.8%. On the consumer side, the CPI jumped 0.9% in June, the largest one-month increase in 13 years. Over the last 12 months, prices were up 5.4%, the biggest jump in annual inflation in nearly 13 years. While those are the facts, there is much debate whether inflation is going to be around for some time, or a brief phenomenon - with huge stakes depending on which way it goes. The Federal Reserve believes that inflation pressures will start easing in the second half of this year, and also notes that the rate of inflation is being exaggerated due to weak numbers in May and June 2020. Rapidly rising gasoline prices are also a key factor in the rise in consumer prices. |
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| That is how much some experts in what is called “item not received” fraud are making per day from the crime, according to one Karisse Hendrick, founder of fraud-prevention company Chargelytics Consulting, as quoted this week in the Wall Street Journal. As the name suggests, the scam involves claims that orders made on-line were not on the porch or other location as delivered – and getting a full refund as a result while keeping the item that was in fact received. It is a growing issue. Forter Ltd., which provides fraud-prevention technology to retailers, said some clients reported a 33% jump in “item not received” abuse over the past 12 months. In some cases, consumers are hiring professionals to execute the fraud, who market their services on social media. Professional fraudsters research the return policies of individual retailers and know the loopholes, said Hendric added. The practice is made more lucrative by the hassle it is for etailers to process returns, leading some to issue refund with no questions for orders worth as much as $500. Retailers and parcel shipping companies are fighting back. For example, Amazon drivers now take pictures of packages when they drop them off, which makes it harder to claim non-receipt. |
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25 |
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That’s how many of its 42 regional distribution centers in which Walmart will install robots from a company called Symbotic. Wilmington, Massachusetts-based Symbotic first implemented its system in a Walmart DC Florida in 2017 and the companies have been working to optimize the system ever since. The Symbotic system sorts, stores, retrieves, and packs freight onto pallets, Joe Metzger, executive VP of supply chain operations, Walmart US, said in a blog post. It uses advanced algorithms to store cases with a precision that speeds the intake process and increases the accuracy of freight being stored for future orders. The technology will “fundamentally alter how products get to stores” because it takes the guesswork out of unloading trucks by creating custom store- and aisle-ready pallets, Metzger added. Walmart says the rollout will take “several years” to complete. Interestingly, Symbotic also lists Walmart rival Target as among its customers. |
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That’s how much an “Amazon aggregator” named Foundry announced this week it has raised from investors. What is an Amazon aggregator? It is a red hot market of companies acquiring smaller companies that successfully sell on Amazon, hoping to improve the company’s processes, leverage technology investments across the portfolio of companies, gain greater clout in Amazon negotiations and more. They also look to move the acquired companies’ products into other on-line and traditional retail channels. On the news, Bloomberg reported that there are now dozens of companies pursuing similar strategies. Aggregators generally look for businesses that have reached more than $1 million in sales on Amazon. But finding suitable candidates is getting harder all the time. Though some two million independent merchants ply their trade on Amazon, accounting for more than half of goods sold on the site, few meet the criteria and many would rather hang on to what they built. And the costs to acquire are rising as a result: Bloomberg says Amazon brands that sold for $3 million last year now fetch as much as $5 million.