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Supply Chain by the Numbers

- Sept. 28, 2023


Supply Chain by the Numbers for September 28, 2023


Oil Prices Headed much Higher; CVS Closing Stores; Amazon Sued by FTC for Alleged Monopoly Practices; Digital Supply Chain Models Incompete, Gartner Says



That is the price we are headed per barrel of oil, according to remarks from Doug Lawler, CEO of Continental Resources, a shale oil driller. Lawler made his comments during an interview this week on Bloomberg TV. Among the drivers of such a rise: Lawler noted that crude output in Texas’ Permian Basin oil field could soon peak. Without new exploration, “you’re going to see $120 to $150” oil, Lawler told Bloomberg, adding that ‘’You’re going to see more pressure on price. He also predicted such a sharp jump is going to “send a shock through the system.” Already crude oil prices have been creeping up to near $100 a barrel, as Russia and Saudi Arabia recently agreed to cut production through the end of the year. US crude is currently at about $92 per barrel, up about 12% since the start of the year.



That’s about how many stores drug store chain CVS said this week it would close in the US by 2024, as part of an on-going process. The retailer it turns out is coming to the end of a policy launched in 2021 under which it closed 300 stores each year - meaning 900 will have shuttered by the  start of 2024. That 900 closures represent only about 10% of the 900+ outlets CVS has in the US. Experts say CVS is undergoing a complete retail overhaul – as more consumers buy on-line and the costs of shoplifting are soaring. The company confirmed that it is pushing to turn more of its stores into healthcare destinations in an attempt to drum up more claims for the insurance business it acquired. Meanwhile, CVS rival Walgreen’s said it closing 150 stores, but that would be a small percent of its total store count.





That is the percent of their full supply chains that companies on average are missing in their digital models. That according to a press release this week from Gartner and analyst Suzie Petrusic. This incomplete view of the supply chain results in trade-off analysis using these digital models that fail to improve outcomes, and limit the quality of the potentially transformative capabilities of these new tools, Gartner says. Digital trade-off analysis includes things such as what-if analysis, scenario modeling, and simulations. Gartner’s analysis on this topic was developed in part based on 600 survey responses of supply chain decision-makers received in December 2022. That survey found that current use of digital models to analyze trade-offs had no meaningful impact on the rate of good-decision outcomes. The incompleteness of those models is a key factor in the poor results, Gartner says. The research defined a “good” decision as one that led to and met the decision maker’s expected supply chain performance and cost outcomes with low decision maker regret.




That’s how many pages are part of a formal complaint by the Federal Trade Commission in a suit again Amazon that alleges a number of anti-trust violations. The heart of the suit are allegations that Amazon unfairly promotes its own platform and services at the expense of third-party sellers who rely on the company’s e-commerce marketplace for distribution. For example, according to the FTC Amazon has harmed competition by requiring sellers on its platform to purchase Amazon’s in-house logistics services Fulfillment by Amazon in order to secure the best seller benefits. The action was brought by 17 state attorney generals in addition to the Feds. The complaint also claims the company anticompetitively forces sellers to list their products on Amazon at the lowest prices anywhere on the web. Because of Amazon’s dominance in ecommerce, sellers have little option but to accept Amazon’s terms, the FTC alleges. Amazon countered by saying it Amazon’s practices have helped spur competition, innovation and selection across the retail industry, among other rebuttals.

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