This Week in Logistics News (January 14-18, 2013)

By Adrian Gonzalez

Countless: the number of double spaces after periods I’ve had to delete as an editor over the years. Last weekend, Slate republished a much discussed article from two years ago titled, “Space Invaders: Why You Should Never, Ever Use Two Spaces After a Period.” If you are guilty of this writing crime, please read the article, and in the spirit of Lean and continuous improvement, stop adding that extra space.

In this week’s news…

SAP reported record revenues for 2012. Non-IFRS total revenue exceeded €16 billion, a 14 percent increase from 2011, and Non-IFRS software and software-related service revenue grew 17 percent year-on-year to €13.2 billion. The record results were driven by SAP’s HANA, Mobile, and Cloud segments. SAP HANA revenues reached almost €200 million in Q4 2012 (and almost €400 million for the full year), while the company’s mobile business contributed more than €220 million to software revenue for the year, and 12 month new and upsell subscription billings for cloud applications increased nineteenfold.

Other software and technology vendors will report year-end results in the days ahead, and we’ll see that 2012 will turn out to be a very positive year for most software vendors. Simply put, in the face of still uncertain economic conditions, companies continued to invest in technology as a way to control costs, increase productivity, and most encouragingly, to drive business process innovation. And the trend should continue in 2013, with investments in Big Data, Mobile, Social, and Cloud leading the way.

Speaking of mobile and cloud, SAP and JDA made announcements this week related to these areas, with a focus on retail. SAP announced SAP® Customer Loyalty, SAP® On-Shelf Availability Manager and SAP® Retail Store Ops Associate mobile apps at the NRF 102nd Annual Convention & EXPO. Here is an excerpt from the press release about SAP® On-Shelf Availability Manager:

SAP On-Shelf Availability monitors sales transactions, detects discrepancies in sales patterns that might relate to product availability on shelf and issues warning. Available now on iPad, the mobile app for store associates provides different departments with user-friendly tools to respond to on-shelf availability issues in a timely fashion and correct the issue…Retailers can:

Have real-time insight into on-shelf availability on a weekly, daily and hourly basis, as well as into processing status and processing time
Monitor sales transactions; detect discrepancy in sales patterns that might relate to the product availability on shelf; and issue warnings
List products that might be out of stock

Meanwhile, JDA announced the release of JDA® Customer Engagement Cloud, “a single solution that addresses omni-channel commerce and optimization logic in real time.” The solution includes several key capabilities, including Omni-Channel Commerce, In-Store Mobility, Profitable Promising, Allocated Inventory Optimization, Customer Order Management, and Omni-Channel Price Execution (see the press release for more details).

As I’ve said before, supply chain and logistics software vendors are showing a lot of love to the retail industry. And to be fair, so are analysts and the press. I hope this year we share the love and the spotlight with B2B industries too. Their supply chain and logistics challenges and opportunities might not be as sexy as those in consumer-centric industries, but they are just as important.

Walmart made the headlines this week by announcing that it will buy more US-made products in the years ahead. Here are some excerpts from the press release:

On domestic sourcing, Walmart and Sam’s Club will buy an additional $50 billion in U.S. products over the next 10 years. The company will grow U.S. manufacturing on two fronts: by increasing what it already buys here – in categories like sporting goods, apparel basics, storage products, games, and paper products, and by helping to onshore U.S. production in high potential areas like textiles, furniture and higher-end appliances.

To help achieve this commitment, Walmart has created a senior team within the company to lead this effort and it will sign longer term purchase agreements to give suppliers more certainty [emphasis mine].

The scope of this initiative, along with the stated intention to sign longer term agreements with suppliers, makes it an ideal opportunity for Walmart to explore Vested partnerships with its suppliers. There is no way, in my opinion, that suppliers are going to make the necessary investments in capital and resources to build or expand their manufacturing operations in the United States unless they and Walmart take a more Vested or collaborative approach to working together (see “Vested Outsourcing: The ‘Mind Shift’ is Finally Happening” and my recent video interview with Kate Vitasek and Karl Manrodt).

Walmart also announced that it plans to hire over 100,000 veterans during the next five years. The news reminded me of the guest commentary we published last April by Kevin O’Meara: “The Greatest Talent Pool Available – America’s Veterans.”

Finally, with Dell’s market cap down to $19 billion from more than $100 billion several years ago, the company is considering going private. According to the Wall Street Journal, “Silver Lake Partners was in discussions Tuesday with Dell for a leveraged buyout at around $13 to $14 a share, according to a person familiar with the matter.” Steve Banker at ARC commented, “The company once lauded for supply chain excellence is now not doing so well on Wall Street. This is a cautionary tale about a company with a supply chain that provided incredible differentiation at a certain point in the market’s evolution, but now has the wrong kind of supply chain as buying behaviors have changed.”

Have a great weekend!

Song of the Week: “Cities in Dust” by Siouxsie and the Banshees