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Archive for the ‘Supply Chain’ Category

About a year ago, we had a post on Zulily and how they managed their order fulfillment. It featured a nifty graphic from the Wall Street Journal showing just how much longer their delivery times were relative to other interet retailers. Now, the Journal has another story — with a spiffy updated graphic — discussing how their delivery times have gotten even worse (Zulily Nips Business Model in the Bud, Mar 23).

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The dollar has been on a tear over the past year. Check out how much it has appreciated against the euro over the past year or so (A Shakeup in Currencies, Wall Street Journal, Mar 19).

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There are some obvious implications from this chart. For example, if you spent spring break in Europe, you have an impeccable sense of timing. Also, if you are US-based manufacturer counting on exporting to Europe, you are going to be swimming upstream (see, for example, Strong Dollar Stands in Manufacturing Sector’s Way, WSJ, Mar 15).

But if a strong dollar hurts US firms, it’s gotta be a godsend for European businesses, right? Well,maybe not. How a weak euro impacts European firms is going to depend on the structure of their supply chains. Check out this eye candy from today’s Wall Street Journal (Europe’s Fashion Retailers Under Pressure From Strengthening Dollar, Mar 24).

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The vicissitudes of American manufacturing has been a long running topic on this blog. But whether one focuses on firms that have always kept their production in North America or those that have reshored manufacturing, there is the question of whether China or other Asian countries are going down without a fight. A recent article in The Economist suggests that manufacturing in Asia in general and in China in particular is going to be around for a long, long while (A tightening grip, Mar 14).

First, one has to recognize that the growth in Asian manufacturing over the last 20-plus yeas has been spectacular. Check out this graphic.

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As the article notes, these numbers get a little more extreme if one looks at “intermediate inputs,” doohickeys like displays and circuit boards that go into finished products that may be assembled elsewhere. (more…)

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The West Port labor strife is now over but issues remain. There are still dozens of ships waiting for their turn at Southern California ports and there are numerous bottlenecks in getting containers off ships and to their destinations. The Wall Street Journal has had a couple of recent articles dealing with how these logistical disruptions have affected supply chains as well as how the ports might possibly run better.

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First up is how the ports customers are reacting (Ports Gridlock Reshapes the Supply Chain, Mar 5). The West Coast doesn’t have a monopoly on US ports, of course; they are just the most convenient to Asia. However, as the graphic above demonstrates, shipping to the East or Gulf Coasts are an options if you are willing to wait a bit longer to get your goods. Currently, the West Coast handles about half of US cargo shipments but, according to an executive of the Port of Los Angeles, a third of their volume is “purely discretionary” in the sense that it could go to another port.  (more…)

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As you may have heard, West Coast ports are having some labor issues. The Pacific Maritime Association (which represents the shipping lines and terminal operators) and the International Longshore and Warehouse Union have been going at it, affecting about 20,000 workers at 29 West Coast ports. (Can’t name 29 Wet Coast ports? See here.) The LA Times has a nice summary of what is in play. In a nutshell, management claims that the union is engaging in a slow down (effectively striking while getting paid, see here) while the union claims that they are responding to safety concerns (at LA and Long Beach) and that management is misrepresenting their position. In any event, what has resulted is lots of delays and a  slew of ships waiting off the coast for their chance to unload. (Never seen a slew of ships? Check out these images.)

OK, that’s all well and good, but how is this affecting supply chains? The sheer scale of the problem is rather mind-blowing. If it were just a question of losing one port, things wouldn’t be too bad. Ships bound for LA, could be sent to Oakland or Seattle. But it’s the entire West Coast. If the goods need to be offload to an US port, that means going all the way to the Gulf Coast or the East Coast. It’s not clear that is an easy solution. Part of why LA and Long Beach are such busy ports is that they have an entire infrastructure to support them. Even if a ship could get to, say, Charleston, it’s not clear that it would do a lot of good for some of the customers whose stuff is on the ship. If a company’s whole logistics system is based on breaking bulk in the Central Valley, having a bunch of containers in South Carolina is, at best, an inconvenience. (more…)

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It’s Valentine’s Day and that means roses and big business for flower shops. But how do flower shops get their roses? NPR’s All Things Considered answers that question if, say, you are a shop in the market for 25,000 roses (For Florists, Roses A Nerve-Racking Business Around Valentines Day, Feb 13). Enjoy!

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Over time, this blog has had a lot of posts about shipping containers. Here is another one.

More specifically , we have from Vox and short video on the history and economic impact of shipping containers and why container ships keep getting bigger and bigger (How cargo ships got so huge — and transformed the world economy, Jan 22).

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