Supply Chain News: Walmart and Amazon by the Numbers 2017

Our Annual Review of the World's Two Most Important Retailers

I think it is rather safe to say that the two most important retailers in the world today are Walmart and Amazon.com.

Walmart earns that place due to its stature as the world's largest merchant (and company) and one that represents an often substantial share of many consumer goods companies' total sales. Amazon obviously earns a spot as the dominant ecommerce company, which is where all the action is right now, sucking most of the oxygen out of the retail room. It continues its phenomenal growth - hardly even slowing down in the face of the law of big numbers - and has been an innovation machine in terms of fulfillment and more (e.g., in the past  few months, the fascinating new Go store concept, new supply chain-related patents it seems almost weekly, and more).

Gilmore Says.... By our measure, Walmart had an 11% of US retail sales in 2016, basically flat over the past 5 years, and down from a peak of 12% in 2009. What do you say? Click here to send us your comments

So we've been looking at both of these retail giants "by the numbers" in recent years, and it has become one of our most popular columns of the year, forwarded by many SCDigest readers to others in their companies.

But as I will explain in a second, getting your arms around the numbers is often harder than you might think.

What Walmart and Amazon are doing is obviously of interest to most other retail and consumer goods manufacturers, and I hope others as well, as in the end almost every company is connected to the retail supply chain.

So let's start with Walmart, which reported its full year earnings, ending its 2017 fiscal year, at the end of January.

While Walmart is an incredible giant, its growth has slowed dramatically in recent years. As can be seen in the chart below, Walmart's US sales (Walmart stores + Sam's Club) grew very rapidly in the beginning years of the 2000s, primarily by adding new superstores carrying groceries at a rapid pace into new markets.

But that growth soon decelerated, and in the recession year of 2009 started a pattern of very low growth that is not much above inflation on average, meaning real growth is almost flat or up a percent or so at best. US sales reached $365.2 billion last year, about double the $188 billion the company had in 2002, but the pace of that growth has obviously slowed substantially down. The Cumulative Average Growth Rate (CAGR) has averaged an impressive 5.8% since 2002, but has slowed to 2.3% since 2010.

And surprising to me, international growth continues to plateau, despite an awful lot of attention and investment there. Walmart international sales last year were $116.1 billion, down from $123.4 billion in fiscal 2016, though the rising dollar is a factor in that decline. Still, international is clearly not the Walmart growth engine once imagined.

Walmart still doesn't provide much detail on its ecommerce numbers, but it says it saw 36% growth in on-line sales in the US in Q4. However, much/most of that comes as a result of the acquisition of ecommerce site Jet.com last year. Globably, ecommerce sales were up 15% in Q4, well behind Amazon's growth, as we shall see.

Not all that many years ago, there were concerns (I think legitimately at the time) about Walmart gobbling a giant, monopolistic share of the US retail market. That fear has simply faded. With the recent very modest sales growth, Walmart's share of US retail has flatlined. SCDigest developed a methodology several years ago, where we compare Walmart's US sales versus relevant US retail figures - total retail minus autos and parts, gas station sales, and restaurants/bars.

It's not quite perfect because Yes Walmart does sell some gasoline, but they don't break it out in a way we can use. Nevertheless, I think what we have is pretty good - and does reflect a higher share of US retail for Walmart than if you do not exclude those categories, which is how it is usually reported. When you hear all these numbers, make sure you understand how they are calculated.

By our measure, Walmart had an 11% of US retail sales in 2016, basically flat over the past 5 years, and down from a peak of 12% in 2009. It simply does not appear any more that Walmart will take over the retail industry. That is an interesting and important change - and its share seems unlikely to go much higher to me, absent an acquisition. Would the FTC now let Walmart buy say Kroger or CVS? Hard to say.

Now let's turn to Amazon, a company that provides a lot of numbers to analysts but getting the best insight from them takes some work. That is because of its several business units and how it computes certain ratios, as I will explain in a moment.

Overall Amazon 2016 revenues were up 27% to $135.9 billion, but that includes digital media sales and its rapidly growing web services unit. I think it is more interesting to look at Amazon's merchandise sales, as shown in the chart below (books are not included in these merchandise numbers).

That shows Amazon was able to grow merchandise sales an amazing 28.7% in North America last year, down just barely from the growth rate of the year before even as the baseline number continues to rise. International merchandise sales growth jumped back to 31.3%, way up from 2015, as the effects of currency on its international numbers was less significant. Simply amazing.

One thing that vexes me is that I do not understand how and where Amazon books revenue for its "marketplace" service, where a customer is buying not from Amazon but direct from the supplier on he Amazon site. Do Amazon's fees for that go into merchandise sales? I think so, but I am trying to confirm. All this is complicated by the fact that sometimes Amazon does the fulfillment for many of these marketplace sellers. Neither of those numbers is broken out.

In the end, I am trying to adjust the numbers Amazon reports for things like shipping and fulfillment costs against the right denominator.

For example, Amazon reports its net shipping costs - what it spends versus how much it receives from Amazon customers. Net shipping costs in Q4, for example, were an incredible $2.63 billion, and about $7.1 billion for all of 2016. Let me say that again - that was $7.1 billion loss with a B on shipping. No wonder Amazon struggles to turn a profit. And we remember when companies used to make money on shipping.

The Amazon figures do report shipping costs as a percent of worldwide sales - last year that was about 5%. That's high enough, but SCDigest then compares those net shipping costs just against merchandise sales - eliminating revenues from web services and digital media that have no shipping. Logically, this makes the picture worse, as shown in the graphic below, with net cost hitting a whopping 7.5% of merchandise sales in Q3, before declining to a still hefty 6.2% in Q4. So much for building fulfillment centers closer to customers.

But it is hard to fully sort this out without a better understanding of how marketplace and fulfillment by Amazon is accounted for. But it's big loss on shipping no matter how you slice it.

I am out of room, even though I have more - such as doing the same sort of adjustment to Amazon's reported fulfillment costs. Will do a part 2 on this as I did last year in a week or two.

Any reaction to these numbers from Amazon and Walmart? Any other data you would like to see? Let us know your thoughts at the Feedback button or section below.

Your Comments/Feedback

Srihari Senior Consultant, Infosys Posted on: May, 22 2016 Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different.  That would only give a complete perspective with all the players in the pool.

Mike O'Brien Senior editor, Access Intelligence Posted on: May, 26 2016 Surprised to see Home Depot fall off the list; thought they were winning with Sync?

Julie Leonard Marketing Director, Inovity Posted on: Jun, 27 2016 Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.

Carsten Baumann Strategic Alliance Manager, Schneider Electric Posted on: Aug, 19 2016 The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself? Editor's Note:  You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field. So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions. Why IoT generically is not on the curve this year I wondered myself.

Jo Ann Tudtud-Navalta Materials Management Manager, Chong Hua Hospital, Cebu City, Philippines Posted on: Aug, 21 2016 I agree totally with Mr. Schneider. I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can. This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing": 1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding. 2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email. 3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on. 4. There will be a document to refer to at any time by any one who needs clarification. 5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future. 6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said. There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".

Sandy Montalbano Consultant, Reshoring Initiative Posted on: Aug, 24 2016 U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA". Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate! The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm

Robert Transportation Manager, N/A Posted on: Aug, 30 2016  Good article!  I am sending this to my colleagues who work with me.  We have to keep this in mind.  Thanks!

Ian Jansen Mr, NHLS Posted on: Sep, 14 2016 SCM is all about getting the order delivered to the Customer on date/ time requested because happy Customers = Revenue. Using the right tools to do the right job is important and SCM is heavily dependent on sophisticated ERP systems to get right real data info ASP. I've worked in a DC with more than 400,000 line items and measured the Productivity of Pickers by how many "picks" per day. I've learned that one doesn't have to remind Germany about your EDI orders.

Don Benson Partner, Warehouse Coach Posted on: Sep, 15 2016 Challenge - to build and sustain effective relationships at the level of the organizations that are responsible for effectively coordinating and colaborating in an otherwise highly competitive environment

Jade Admin, Fulfillment Logistics UK Ltd Posted on: Oct, 02 2016 Of course we all need to up our game. We need to move with the times, and always be one step ahead of what the future will bring.

Mike Dargis President of asset-based carrier based in the Midwest, Zip Xpress Inc. (at ZipXpress.net) Posted on: Oct, 03 2016 Thanks for the article, but I know there's a lot more to this issue than just the pay rates. Please check out my blogs on the subject at www.zipxpress.net.

Blaine Inventory Specialist, Syncron Posted on: Nov, 16 2016 Lora, great article! I agree that companies choose the 'safe' solution more often than not. My solution is a bolt-on for legacy ERP's and we even face challeneges of customer adoption. Most like to play it safe and choose an ERP upgrade, which is more costly, time consuming, and has lower ROI across the board. Would love to learn more about your company, we are always looking for partnerships. Blaine blaine.schultz@syncron.com

Bob McIntyre National Account Executive, DBK Concepts LLC Posted on: Nov, 21 2016 This is a game changer in GE's production and prototyping.  It also has huge implications across the GE global supply chain with regard to the management of their support and spare parts network.

Kai Furmans Professor, KIT Posted on: May, 22 2017 I am referencing to the comment that leasing of warehousing equipment (beyond forklift trucks) is a vision for 2030. Just recently in Europe, such a business model has started, see here: https://next-intralogistics.de/ I am following with a lot of interest, how the business develops.

Stuart Rosenberg Supply Chain Consultant, First Choice Supply Chain Posted on: Jun, 05 2017 If we limit the standard on judging or determining the best supply chain to just three calculations it does not tell the entire picture.  Financial performance metrics are valuable as they capture the economic consequences of business decisions.  But supply chain managers make decsions and use organizational resources that impact a company's financial well being.  Where is a firm's earnings over a period of time determined by sales less product costs and general/adminsitrative costs?  Where is the metric for determining the sources and uses of cash from three perspectives - operational, investment and financial?  Where are these supply chain metrics: on-time delivery, lead time, response time to customers, product returns, procurement costs, network distance, inventory carrying costs, forecasting accuracy, sourcing time, etc,.  Without knowing the results of all these supply chain calculations the there must be a question as to the accuracy of the 25 top supply chains.

Dustin Calitz Project Commercialization Manager, Mondelez Posted on: Jun, 06 2017 I feel this ranking misses the mark in SC. It does not seem to consider a key indicator in days inventory on hand, which is key to determining a SC company's ability to forecast, manage inventory costs and reduce aged stock. In additiion I realize it's difficult to understand what goes into the customer survey, but would I assume specific metrics are being asked. For examples customer's opinion on service level differentiation and the ability to deliver the right product on time, which should then be allocated a bigger weighting than 10%. It would also be interesting to take a view of the above list's SKU portfolio complexity, seasonality and launches/promotions. I would again assume some companies on the list above have a far more complex SC to manage and lead, ultimately requiring a lot more innovation within a SC to stay ahead of competitors, and ultimately satisfy their customers demands.  I understand above metrics are difficult to measure, as mentioned in the article, but they somehow need to be considered to give a true reflection.

Michael Hurd Lean Consultant, Unemployed Posted on: Jun, 10 2017 A Very Good Article... While some feel that lean is a scam that pushes for more out of the personnel and out of the companies through reduction of waste and adding value for the customer, there are several things to remember: 1) Lean methodologies are designed and implemented to reduce time wasting, so this may seem that you are working harder as an employee. 2) Lean methdoligies only work when everyone from the janitor to the owner of the company get involved and back the program. 3) Lean methods are there to make you work smarter not harder, although it may feel you are working harder. 4) YES... Sometimes lean methodologies fail! This is due to project overun or taking on too large a problem and trying to fix it all in one go and not taking the smaller problems that are associated with the large problem and fixing them first. Sometimes fixing the small problems leads to resolution of the larger problem.

Akhil Director Supply Chain , skuchain Posted on: Jul, 31 2017 The Supply Chain technology is not considered a problem because traditionally supply chains are thought to be cost centres unlike sales functions. The tendency, in general, to limit expenses and cost cutting on upgrades for technology and for talent have been hindering progress for the businesses. Supply chains lack real time visbility and above all trust across the value chain (not that the participants are dishonest) rather it's about the cascading effects referred to as the bull-whip effect which causes higher magnitudes of disruptions.  Supply chain real time information should top the list . Another problem is that of multi homing as so much data is available across several feeds of IOT/Email/Internet /Mobility/ERP that organisations tend to have issues around finding a single platform to collate them for meaning analysis.  Blockchain (if deployed appropriately) can be a great solution for solving the issues around the supply chain.

Mike Ledyard Vested Program Faculty, Vested Way / University ofTennessee Posted on: Aug, 04 2017 Excellent article.  It very much points to the need for Shared Risk / Shared Reward as we teach at Vested.  Suppliers will respond when they are made part of the team, and they have a lot to bring to the game.  The service provider is the subject matter expert in the services provided, and in an excellent position to enhance the capabilities and services offered by the shipper.

Andrew Downard Managing Director, AD Supply Chain Group Pty Ltd Posted on: Aug, 05 2017 As the article points out it is not a lack of technology that is holding back performance but rather a failure to form the right sort of relationships.  As well as the length of such relatiohships, practitioners should consider employing arrangements that incentivise both parties to innovate and deliver levels of performance and profit that neither thought possible.  By far the best model I have come across to achieve this is the Vested Outsourcing model developed by researchers from the University of Tennessee.  See www.vestedway.com for information on the model and case studies that show how others have benefited from creating a Vested deal.

Najma logistics, threelineshipping Posted on: Aug, 23 2017 Very informational article. The major focus of logistics is on e-commerce. There is a need to optimize every component of logistics by following the latest trends and technologies. Thanks for uploading this article.

Sameer Shukkla Consulting Partner, Wipro Inc. Posted on: Sep, 17 2017 I have recently co-authored a white paper with my colleague wherein we have looked at 2 fundamental guiding principles  - 1. Always have enough to Sell / Produce 2. Do not have excess to Sell / Produce These 2 Golden Rules can be the foundation of keeping optimal inventory levels and for organizations to achieve the same. We have looked at a framework which tries to reduce the phase mismatch between Demand & Supply, and tries to bring the shape of the supply curve closer to shape of the demand curve. We have classified symptoms and underlying root causes for the above "Phase mismatch" and "Curve Mismatch" between Demand and Supply, and then talked about addresssing those individual root causes to strive towards Leaner Inventory levels while maintaining or improving service levels. So to answer your question, we feel the Companies which have addresed these causes have been able to keep DIO horizontal or even going down, while others have not been able to control rising DIO because of not addressing the root causes.

Simon Eagle SCM Consultant, Camelot MC Posted on: Sep, 17 2017 You ask why turns are flat or declining despite lots of attention and technology. The answer is, I think, 2 fold: the supply chain environments VUCA (Volatliity, Uncertainty, Complexity, Ambiguity) is on a continuous upward curve and this means that forecast accuracy inevitably declines in parallel - and much of that inaccuracy is hidden by the statistics. For instance a company with, seemingy good, 80% mix accuracy will find that figure is skewed so high by the few high volume / low variability items. 80% of the items will be achieving considerably less than 60% error. So most item level forecasts used for driving replenishment through an MPS (be it ERP or APS) are simply leading to unbalanced stocks, service threats and continuous expediting / fire-fighting. These schedule interrutions are "variability" that is disrupting flow and, thereby, increasing lead-times, using unplanned capacity and generating excessive (and still unbalanced) inventories. The replacement in ex-stock supply chains is "enterprise(s)-wide" pull which also uses "push" for extreme/exceptional events. Its other key characteristics are that the supply chain is decoupled and is demand-driven. And now it can be implemented using SAP since they announced they they have co-developed an enhancement for IBP that supports this transformational way of working - up to 50% inventory reduction, requiring less capacity and shorter lead-times all while achieving planned service levels. See https://www.camelot-itlab.com/en/camelot-demand-driven-lean-planning-suite-for-sap/ and https://www.linkedin.com/pulse/supply-chain-flow-what-why-how-simon-eagle/

John Smith Research & Development, Octopus Tech Solutions Posted on: Sep, 18 2017 IoT is without a doubt starting to become a major factor in the profitability of various companies. In the manufacturing sector, we will see it come into the front by the end of 2020 completely. Various sectors have already adapted IoT solutions like the security industry or companies offering BPO Services India. Contact centers not just in India and China but across the world have adapted technology following the principles of IoT. The manufacturing sector is soon going to follow.

Girish Maniyar Chief Manager Development Initiatives, Asian Paints Posted on: Sep, 28 2017 I  can speak with some context. While efficiency and tools can reduce inventory, we also see the number of SKUs and new products increasing, and also the number of sales/depot points. This means the inventory in such cases, can start with very high number and with more customization and choices available to the consumer, so there is no end to the long tail of products available within a category. It is unlikely that the slow/dead goods are written off so easily to be not included here. A larger question, would it be purely an IO problem or also a Demand Planning (Forecast Error) problem? A higher cycle time of service but a better fill rate can improve inventory performance, by aggregation. But a bad forecast can do away all the good work you do in inventory planning. Do you have numbers for decorative coatings in the list? I did not see something there only for decorative coatings.

Reo B Hatfield Chief Operating Executive , BestTransport Posted on: Oct, 20 2017 My opinion is that peaks and valley are just nice graphics to explain.  Smooth responses save the day.   3PLs  just adjust to the climate and the areas of movement of Logistics.    One purpose of the 3PL movement was to adjust to an always changing market.   They will never be fixed and will flex as the logistics changes.   3PL companies have vast knowledge of their business.  Their success is their ability to move up and down as the market flows.  They bring a level playing field to the transportation world that in the past was rigid but looked good on spreadsheets.  Industry graphic personnel like to be able to answer all the changes because they can only see documents.  3PLs see the needs, the issues, the positive changes and the knowledge to know why and when to adjust.   They (3PLs) have smoothed the waves of the past and everybody likes to see the spikes so they know something is there to clearly report on. Smooth sailing is boring but sure gets you where you want to go.

Catherine Dennis Supply Chain Manager, Indak Mfg Corp Posted on: Oct, 26 2017 So the horrific and severe worldwide allocation of electronic components is not an issue?  Don't tell that to the automotive buyers.  It's HORRIBLE.  Lead times out to up to 76 weeks.  Why not write about that?  It's killing us, our customers and the big automakers.

Huub Logistics Manager, Shell Posted on: Nov, 11 2017 I suggest McKinsey to do a bit more research in Prof Gattorna’s dynamic alignment. This article only scratches the surface a tiny bit. Much more to be found reading about the alignment concept.

Joseph George Farmer, Field Vista Posted on: Dec, 07 2017 Primarily Vision is required followed by Assigned Focus on objectives.  Or maybe just love for USA.  The market will not find its way unless it's for organic vegetables and RRR.  Two to three years later will take two to three years longer to the end of the decade, and this is viable today.  God bless america from its present distraction.

Gary Buchs Owner Operator , Self, Landstar Business Capacity Owner Posted on: Dec, 17 2017 In My Opinion, the fact that capacity will tighten should be obvious to everyone engaged in the transportation.  Capacity to move freight isn’t how many trucks or trailers are in the system or what a computer  program says, it still is truck driver based and poorly-managed companies won’t be able to imporove this fact.  Investing in people is still most important! Get ready to pay higher prices for goods and services. I think we could lose 10% of Capacity in many areas.

Dan Pres., Bioptechs Posted on: Dec, 20 2017 After all the ground we have lost in the productive sector and the additional burden that loss of our productive momentum has placed on our society, somebody tell me why so many people are against the actions necessary to restore our vital productive infrastructure! It is like the left enjoys shooting itself in the foot!

Jayaram Business Development, Raghava Logistics Posted on: Mar, 04 2018 Great article and thank you for summerizing the predications.  What does it mean to country like India where the labour is still cheap? Where the logistics cost is still on the higher side compared to some of the developed nations?

Herb Shields President , HCS Consulting Posted on: Mar, 06 2018  I agree that robots can replace some amount of manual labor in logistics centers.  However as you mention, the labor pool is shrinking.  We need more training programs such as the one provided by the Greater West Town organization in Chicago.   Www.gwtp.org.  (It is a program that your readers should find interesting.)

Billy Associate, BJO Posted on: Mar, 13 2018 Thanks for this very informative article.

Doug Murless Country Manager, krunchbox (www.krunchbox.com) Posted on: Mar, 18 2018 Gone are the days when consumers will wait for a retailer to have the product back in stock, those days are done. We live in the "I want it now" society and with Amazon in their pocket consumers can easily "now" it to themself the next day right from their phone. The importance of product availability is under the microscope at all retailers as an empty shelf equals lost customers, a poor customer experience and entirely abandoned purchases. We are on a mission at krunchbox to help suppliers fix their product availability and sell thru and improve their buyer relationships, hopefully before their retail partner fines start rolling in and or we see more retailers close.

NikhilSingh Executive, Carmatec INC Posted on: Mar, 21 2018 You are correct There are government programs to encourage investment at small and mid-size manufacturers, but McKinsey says these programs generally have smaller budgets, less certainty of ongoing funding, and more constraints on their mandates than comparable programs in other countries. Policy makers should examine which existing initiatives are producing the most promising results, then scale up those efforts and commit to them for the long term.

Mike Mortson CEO, Supply Chain Game Changer Posted on: Jun, 15 2018 I wrote a similar article on supplychaingamechanger.com about the same topic:  Gartner's 2018 Top 25 Supply Chain List!  Is it Still Relevant?  at https://supplychaingamechanger.com/gartners-2018-to…t-still-relevant/

Chuck Nemer Trainer, The Guru of Biz Posted on: Aug, 16 2019 Nice metaphor and nice picture.  I'd like to see a bit more meat on the bones if you're going to completely sell me on the concept.

Charles Quail CLO, Belair Posted on: Jan, 20 2020 The truth from the road is that rates were so good, that 2018 was the best year we had since 1997.  So as we saw this happening, we saw carriers increased their fleets to capitalize on this gravy train, thus depressing the rates for 2019 from overcapacity.  They also flooded the used truck market, and sales dropped 70%. We know because we also were thinking of retiring, but cannot sell our lightly used 2019 Mack Anthem because of this.  So we claim it was not the high cost structure, it was the greed.

Tom Miralia CEO, Distribution Technology Posted on: Feb, 26 2020 Multistory Bronx DC  $700 million and 1.2 million sqft- what's the rent going to be- $3.50 per sqft per month?  $40+ per sqft annually.  In many metros, thats higher than the best Class A office rent and about 9-10 times a going rate in the suburbs?  Well, space cost is the least cost in supply chain typically- still, must be a compelling business model to drive this? Let's pretend that a product is valued at $50 a case, 60 cases per pallet, maybe stored in rack at 8 sqft per pallet in a narrow aisle single-select layout of some form- if total logistics expense ranges 8% maybe, then there's $240 in budget to flow goods from sourcing to customer.  Now the retail customer may spend more to get it to the end purchaser which is beyond my scope (and may folks ability to truly model I suspect).  if that pallet occupies that rack spot for 2 months that rent expense might range about $56?  That takes almost the whole budget for warehousing portion of logistics costs before labor, equipment, admin, materials and so on? I dunno if I'm seeing this right?  Likely I'm off base?

Peter Sales, Freight sales Posted on: May, 08 2020 From a sales prospective:  Our company only uses small trucking companies and gives them the business directly. We sell right to the manufacturer.   The companies we sell for have no sales force and are good hardworking companies who would usually have to rely on only brokers. We help them with appointments billing bids when needed. This year despite our companies doing an excellent job and not raising there rates we lost many accounts or were reduced significantly to brokers.

Harry Moser President, Reshoring Initiative Posted on: Sep, 24 2020 Mr. Meidinger is correct that high healthcare costs have hurt U.S. mfg. He overstates his case by describing healthcare as the primary cause: U.S. healthcare costs % of GDP are about 7 points higher. Our mfg. costs are 20 to 40% higher. The costs paid by taxes in the other countries require highrer salaries and selling prices to obtain the same after tax benefit. His graph shows correlation, not causation. For a clear comparison of the impact of various factors, see the Competitiveness Toolkit https://reshorenow.org/search/. We include lower healthcare costs as one of several important factors in driving further increases in reshoring.

Chris Imamura Executive in Residence, University of Colordao Posted on: Oct, 10 2020 You note that 28% of Amazon's operating income came from its AWS web services unit.  However, from their 2019 Annual Report, Amazon reported $9.2B of the total $14.5B operating income came from AWS = 63%.  What am I missing?

Robert Simoneau Consultant, PolyEd Posted on: Oct, 13 2020 This is an excellent article but a few more details would help. As a lecturer for the Society of Manufacturing Engineers spent a lot of time working with and teaching Tier suppliers. The stories they told were grim from two perspectives. First US automaker are slow to pay their bills, net whenever. The second is the timeline to pay for tooling, some claimed it took one year to get paid. As one group said we spend most of our time hiding money. I consulted for one of the big three and when I asked a group of managers and engineers, when do you pay your bills, they all laughed in unison ... big joke. I was furious and tried to explain to them how this affected their supply chain. It took a lot of effort for GM to go from 50% market share in the 50s, to less  than 20%. When doing thier financial analysis they forgot about quality related issues and the eventual loss of market share. Interesting Boeing is doing the same thing with pretty much the same result ... sad.

Jerry Saltzman Professor, Zicklin Business School, Baruch College Posted on: Jan, 24 2021 After all the rhetoric and  bluster, it's great to see a data driven the year in review analysis.   it was certainly a wild year but the data shows the resilience of the global and domestic supply chain despite political interference and Policy by tweet.

Dave Individual, NA Posted on: Mar, 15 2021 How come SPSC, SPS Commerce isn't included in supply chain software?

Steve Murray Senior Analyst, Warehousing Education and Research Council Posted on: Apr, 07 2021 From 1967 to 1972 I worked as a business systems analyst and developer for Safeway Stores, Inc.  At that time Safeway was the largest grocery retailer in the U.S. based on revenue.  It was also highly unionized.  While Safeway supported the efforts to develop a machine readable code for retail checkout, it's relationship with the union kept it from doing so openly as it might reduce the need for price ticketers, and checkers.  Quite frustrating for those of us who were developing solutions.  But back then we had plenty to do working on accounting systems, procurement, warehouse inventory control, retail store replenishment and labor planning - after all this was the dawn of the retail supply chain.  Eventually Safeway signed on to the UPC movement and the rest is, as you say, history.

AL WEISS CHAIRMAN, WEISS SUPPLY CHAIN CONSULTANTS Posted on: Apr, 09 2021  GREAT ARTICLE!

Rick supply chain manager, Fresh Mark Posted on: May, 28 2021 Do you have any information about Hormel's supply chain?

Daniel Druwe Araujo CPIM, CSCP, T2People Posted on: Jun, 04 2021 Very appropriate article, explaining the non-qualitative ranking, at least from a Supply Chain Management perspective.  Once understood what it is not, the ranking is very interesting in terms of identifying the most successful companies in absolute terms. The question that remains for the professionals interested in learning from the best supply chain designers and managers is exactly which are the most useful ideas and practices that can be learned from the best companies.